Media Statement issued by The Funding Practice Alliance
The Funding Practice Alliance (FPA) is a group of organisations that work to develop, promote and support effective funding practice within the non-profit sector. The partner organisations are the Social Change Assistance Trust (SCAT), the Community Development Resource Association (CDRA) and Inyathelo: The South African Institute for Advancement. In 2011, the FPA published a research report entitled ‘Meeting their Mandate?’ which concluded that there was a lack of accountability and transparency over the way the Lottery distribution agencies operate.
For immediate release: Monday, 12 August 2013
Civil society organisations, including those belonging to the Funding Practice Alliance (FPA), will be making oral submissions to the Portfolio Committee on Trade and Industry when they meet this week to consider proposed amendments to the Lotteries Act. The public hearings on the draft Lotteries Amendment Bill will take place on 14 and 16 August 2013. The proposed changes are likely to have a significant impact on tens of thousands of non-profit organisations and their projects as they alter the entire structure of the National Lotteries Board (NLB) as well as the manner in which funds from the National Lotteries Distribution Trust Fund (NLDTF) are distributed.
FPA member and Inyathelo Executive Director Shelagh Gastrow says their primary concern is the fact that the changes open the door for a state-run lottery rather than one run by an independent entity with an independent board. “Although it is not clear what the ramifications of this would be, it is the potential thin end of the wedge which could eventually evolve into a fully-fledged income generating exercise for government, where billions of rands of funds will go into government coffers to be distributed only to welfare and service delivery organisations that are aligned with government’s national objectives,” insists Gastrow.
Over the last few years, there has been substantial criticism of the Lotteries in respect of the disbursement of funds to the civil society sector, including a lack of accountability and transparency, random decision making, poor management and inefficient administration. This has had a devastating impact on the work of many non-profit organisations (NPOs), with some even forced to close their doors as a result.
Funding Practice Alliance Coordinator Janine Ogle says another key concern is the clause that gives the Minister of Trade and Industry more power. “It is proposed that there should be one permanent Distribution Agency that will make grants to all the categories of potential beneficiaries. But this new agency would only account to the National Lottery Board on administrative issues. This means that the Minister can continue to influence any funding decisions according to the government’s preferences and priorities,” explains Ogle.
The FPA is also strongly objecting to the clause that allows an organisation to receive funds without submitting an application. This is bad practice and could lead to fund leakage and abuse. The deletion of the clauses referring to 'mandatory percentage allocations' for provinces is also concerning as it would further centralise power with the Minister and allow government to favour or exclude certain provinces from funding allocations. The Bill also makes it extremely difficult for ‘conduit’ organisations such as community foundations working in rural areas, to access funding.
NOTES TO EDITORS: Members of the Funding Practice Alliance and other civil society organisations will be attending the public hearings on Wednesday 14 August 2013 and will be available for interviews outside the Old Assembly Chamber at 1pm.
For interview requests, please contact:
Inyathelo Executive Director and a member of the Funding Practice Alliance
Mobile: 082 494 2996
Landline: 021-465 6981/2
Funding Practice Alliance Coordinator
Mobile: 076-724 5086
Landline: 021-465 6981/2