It fails to fulfill its mandate to distribute funds appropriately
The Funding Practice Alliance is calling for a complete overhaul of the way the National Lottery Board manages and distributes billions of rands worth of public funds. The Alliance - made up of four prominent civil society organisations - says there is a lack of accountability and transparency over the way the board operates and it needs to be called to account for its failure to fulfill its mandate to distribute funds appropriately to non-profit organisations and charities.
The Supreme Court of Appeal recently dismissed an appeal by the National Lotteries Board against a Western Cape High Court decision in support of two NGOs - the South African Education Project and Environment Project (SAEP) and the Claremont Methodist Church Social Impact Ministry, Sikhula Sonke (Sikhula Sonke). Both registered charities had their grant applications turned down on the grounds that they didn’t comply with the guidelines adopted by the Lotteries Board. However, the Supreme Court held that the board was not justified in applying the guidelines so rigidly and unreasonably.
Inyathelo Executive Director Shelagh Gastrow says it’s highly objectionable that worthy organisations like these - who educate thousands of underprivileged children - are denied funding while the Lotteries Board sits on billions of rands of undistributed funds. “The bottom line is that the functioning of the National Lotteries Board and the way it distributes funds needs to be urgently reviewed. Its activities are not transparent and the agency doesn’t account adequately for its disbursements,” insists Gastrow.
The Funding Practice Alliance says random decision making, poor management and inefficient administration have had a devastating effect on many NGOs. Gastrow says many organisations who provide essential services to the poor and vulnerable have been forced to close their doors. “Resources allocated for the sustainability of these organisations have often been mismanaged, delayed or not distributed. At the moment, the distribution agencies are only accountable to the Minister of Trade and Industry. We believe they should account directly to the CEO of the lottery and that the appointment process to these agencies should be transparent and open to nomination from the public. This would promote greater accountability. Civil society members who have an understanding of how NGO’s are financed should also be represented on the National Lotteries Board. This would go some way towards tackling the lack of transparency,” says Gastrow.
In March this year, the Funding Practice Alliance released a research report on the National Lotteries and National Development Agency entitled “Meeting their Mandate?” The report questioned whether the agency was using its grant-making role in a fair and equitable manner. Gastrow says it is unacceptable that the board has paid grants worth R41 million to COSATU and the National Youth Development Agency (NYDA) to host politically-motivated events. “How can a COSATU rally be deemed a needier cause than the education of underprivileged children? It is apparent that the board and the agency set their own development agenda, which shifts and changes in line with government policy and approach,” says Gastrow.
The FPA is made up of four civil society organisations - Inyathelo - The South African Institute for Advancement; Social Change Assistance Trust (SCAT); Community Development Resource Association (CDRA) and Rural Education Access Programme (REAP) - and aims to develop, promote and support effective funding practice within the non-profit sector in South Africa.