Charities struggle as Lotto’s R6bn stays in its coffers


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Picture: Bongiwe Mchunu

Molo Songololo is an internationally esteemed Cape Town-based children’s advocacy organisation, whose work includes programmes in areas where children are particularly vulnerable to abuse, such as Beaufort West and Atlantis on the West Coast.

It is but one of many NGOs and charities countrywide which have grown so exasperated with the operation of the national lottery that its bosses describe the business of getting money allocated to them as a “lottery in itself”.

In a landmark judgment late last year the high court concurred, ordering the National Lotteries Board to get its act together and review two applications previously rejected on grounds the court found to have “no formal status”.

In the last financial year the National Lottery Distribution Trust Fund paid out less than a third of the money it is tasked to distribute to accredited charities and NGOs. In this climate many organisations, including Molo Songololo – which has been waiting nearly two years for a promised payout – have had to resort to emergency fundraiser events just to keep going. There is not much else they can do.

The lottery remains unaccountable to the public and the committees whose job it is to decide which charities should benefit are not subject to any oversight.

Patric Solomons, who heads Molo Songololo, said the organisation applied for funding at the end of 2009. More than a year later, they have heard nothing. “They told us our application had been declined because a document we had submitted was not there. We sent in an appeal, but we still haven’t heard from them. Communication is very, very bad.”

The way the system works is that the National Lotteries Board sweeps lottery accounts weekly – moving all the money earned to specific accounts.

A total of 34 percent of earnings will go towards good causes – to be distributed by the distribution trust fund.

Distributing agencies for the arts, charities, sport and miscellaneous causes then decide which applicants should receive funding.

Currently, the distribution trust fund has about R6 billion in its coffers.

Board spokesman Sershan Naidoo said this R6bn included “allocated funds, unallocated funds and funds that were ring-fenced for the following financial year”.

In the 2009/10 financial year, R3.4bn was allocated to charities and causes covered by the distribution trust fund, but only R1.94bn was actually paid out. Naidoo says this is because “the majority of the grants are allocated in multiple payments and also multiple years.

“Subsequent payments are only made on the receipt of a satisfactory progress report.”

While the board’s annual report recorded a R6bn surplus, Naidoo denied the money was “a surplus per se”. “The distribution was still in process,” he said, describing the board’s job as being to allocate funds to “the needy” who had to meet proper criteria.

“We can only allocate funds to those organisations that meet the requirements.”

Naidoo admits that some applications “slip through the cracks”, but said this was only a small number.

Solomons said his biggest concern was that NGOs, which were providing “a very necessary service to society”, had to wait for funding while politically linked entities such as the National Youth Development Agency was awarded R40 million. This R40m grant drew severe criticism from various quarters.

The money came from the category which allocates five percent of good causes money to “miscellaneous” issues.

“You cannot compare one category with the other,” Naidoo said.

“The charities sector calls for applications and receives 4 000 applications. This cannot be processed overnight. The miscellaneous purposes category does not call for applications. Applications are only considered if they fall outside the mandate of the other categories and only if they meet the requirements.”

Naidoo said only one R24m payment of the R40m allocated had been made so far. The remainder would be paid once a “satisfactory progress report” had been produced.

The youth conference itself was reported to be a shambles with a number of the punted speakers not turning up, equipment malfunctioning and catering chaos. It has also recently been reported that more than R5m was spent chartering a plane to ensure that 262 Cuban delegates could attend.


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