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The National Lottery and the non-profit sector

2.1.5 Relationship between the Distribution Agencies and the Lotteries Board (1): Excluding civil society and existing grant makers?
 
The decision to make the National Lotteries Board responsible for the distribution of funding has come under criticism in some quarters. The South African National NGO Coalition, for example, cites this as “another example of the contempt with which Government, and in particular the Ministry of Trade and Industry, views the non-governmental sector.”58 In response, SANCOCO, in conjunction with the Non-profit Partnership, have developed an alternative proposal for an independent Charities Distribution Agency. This was submitted to the Lotteries Board as well as the Minister of Trade and Industry, but was never acknowledged officially.

The Board is not sympathetic to such criticism. When asked about the SANGOCO/NPP proposal, they pointed out that these organisations “basically wanted to become the Distribution Agency” and that “The Act does not allow this. People, not organisations, make up the Agency.” 60

From a legal perspective, this attitude is understandable. The Act is clearly concerned to ensure the independence of the distribution process and, for this reason, places considerable emphasis on the need to ensure that neither parliament nor any particular organisation or lobby group is able to exert undue influence on the Distribution Agencies.61 Clearly, this precludes the possibility of any organisation becoming a Distribution Agency. At the same time, it raises the question as to whether the Lotteries Board—which, quite clearly, is an organ of state62- should be able to influence the day-to-day operation of the Distribution Agencies. This is explored in more detail in the section that follows.

The Lotteries Board is no less sympathetic to calls that they utilise the experience of existing grant-makers. Their mandate, the Board insists, is to fund organisations and projects, not funders. In particular, the Board points out that the total amount of money allocated by Viva and the Community Chest combined was only R30 million a year, and that these organisations are simply not equipped to handle the R430 million which is currently available to the Distribution Agencies.63

This response is not entirely convincing. The question is not whether the Community Chest and other grant makers take responsibility for distributing all available funds, but, rather, whether the task of distributing the NLDTF to good causes could be performed more efficiently if the extensive regional networks and grant making expertise of existing funding conduits could be employed.

One of the criticisms often levelled against the Distribution Agencies is that they lack an “on the ground” presence in any of the three key sectors or categories in which they operate. Although Agency staff do sometimes visit applicants, this is done infrequently and on an inconsistent basis.64 This shortcoming is exacerbated by the fact that the Board sits in Pretoria, which removes it further from the disparate communities seeking support.

One way to avoid this shortcoming may be to decentralise the Distribution process. Provincial or perhaps Regional Distribution Agencies would be far more efficient, in that they would be responsible for considering fewer claims, and would have a far greater understanding of local dynamics. Applications could still be pre-screened by the Central Distribution Agency in Pretoria to ensure general compliance with the funding criteria, whilst more conceptual decisions as to the appropriateness of funding applications would be taken at a Provincial level. In regions or Provinces where existing grant makers and funding conduits exist, these could play an active role in assisting the Provincial Distribution Agencies.

When approached about this, the spokesperson for the Minister of Trade and Industry, Mr Edwin Smith, confirmed that the DTI was willing to consider proposals to decentralise some of the decisions pertaining to allocation. As long as the decision making-powers remain with the Board, there does not appear to be any reasons why this should not involve some form of consultation with existing grant-making organisations.65

Footnotes:
  1. SANGOCO proposal.
  2. Mimeo.
  3. Interview with Sershan Naidoo, 20/05/2002.
  4. Interview with Rob Davies, 11/06/2002.
  5. The fact that the Lotteries Board is an organ of state has been confirmed by Appeal Court Judge Mervyn King SC (Sunday Times, 18 November 2001 (Business news section).)
  6. Interview with Sershan Naidoo, 20/05/2002
  7. The Charities Distribution Agency has recently decided to do this in all cases where the grant awarded exceeds R50,000. This is a welcome development, although it remains to be seen whether this will actually happen, and what impact such visits will have on the allocation process.
  8. Interview with Edwin Smith, spokesperson for Alec Erwin, 28/06/2002
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