Despite the growing popularity of community-based approaches to forest management, there are limited cases in which benefits and costs are shared equitably. One of the reasons for this situation is that decisions within community-based forest management (CBFM) regimes are dominated by local elites. This is especially true in the context of Nepal where society is stratified into different economic classes, ethnic groups, gender relations, and geographic differentiations. In this context, it is critical to understand the possibility of local elites becoming more sensitive to the needs of the marginalised groups, and establish factors that constrain or enable the process through which they change their attitude and behaviours. This paper analyses this dynamic in the context of community forestry in Nepal. The factors and processes enabling local elites to undertake poverty-reduction initiatives by mobilising community forestry resources are specifically analysed.<br /> <br /> The Sundari community forest user group (CFUG) located in the central Terai region of Nepal was used as a case study. How local elites developed innovative institutional arrangements and governance practices to provide a wide range of benefits and subsidies to the poor and marginalised members of the CFUG are analysed. Such benefits and services include: providing financial subsidies for income generation such as through goat farming, house construction for the homeless, and a range of empowerment support services for the marginalised. The analysis suggests that there are key aspects that inspire community elites to work in favour of the poor: a) opportunities to critically self-reflect on their mindsets and behaviours in relation to the poor and marginalised groups, b) the presence of civil society facilitators with in-depth knowledge of social power relations and local-level dynamics of governance.