Presentation tothe Select Committee on Trade and

International Relations 12 September 2012

Presentation Outline

•Introduction and Overview•Performance: Key Trends•Achievements •Allocations per Sector / Province•2012/13 Budget Allocation per Sector•Challenges •Corrective Measures•Lessons Learnt•Concluding Remarks•Discussion

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IntroductionRegulationNational Lottery: Operated by Gidani (34% of sales to NLDTF)Other lotteries

DistributionProcess applications and make payments

DAs adjudicate applications and make grants in line with criteria

Charities45%

Arts28%

Sports 22%

Miscellaneous5%

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NLDTF Revenue & Disbursement1st April 2000 to 31st March 2012(R million)

Revenue from Lottery Operator 13,981

Interest on investments 3,940

Total revenue 17,921

Cash Disbursed since inception 13,013

Spent on administration (2.7%) 434

Funds on hand 4,662

Less amounts already committed as at 31 March 2012 2,219

Cash available for allocations in 2012/2013 2,443

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NLDTF Disbursement per Sector1st April 2000 to 31st March 2012(R million)

SECTOR AMOUNT CHARITIES 6,623ARTS & CULTURE 2,805SPORT 3,324MISCELLANEOUS 261TOTAL 13,013

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NLDTF Revenue & Disbursement1st April 2000 to 31st March 2011(R million)

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Surpluses• Surpluses are created by a mismatch between inflows and

outflows• Inflows dependent on Sales are steady but not predictable • Outflows dependent on

– Number of applications received– Number of applications that are compliant– Number of applications that are deserving

are also not predictable• A large portion of the funds in the trust is always committed

to beneficiaries• In 2011/2012 demand was 40 times supply• NLDTF cannot disburse more than it receives

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Performance: Key Trends• Lottery sales: – Only source of funding. – Grown from R3.08bn in 2001 to R4.94bn in 2012 – Significant dip in 2008 (R1.6bn)– Fund is only now beginning to recover at levels it was edging towards

in 2006/7• Admin Ratio: 2.7% of all available funds on Administration since inception• One of the largest (if not the largest) funders of NPOs , CBOs in SA

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Performance: Key Trends• Cash disbursements in the 4 most recent years: 2009: R0,9 billion 2010: R1,9 billion 2011: R3,6 billion 2012: R2,05 billion• This acceleration of disbursements (resulting in reduction in

reserves) reflects improvements in the distribution process• The above plus the fact that income from ticket sales has

remained more or less ‘static’ for same period, explains the difficulty that some stakeholders have to understand the ‘reduction’ in available funds

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Achievements• More than 15 billion allocated for good causes

between 2000 & 2012• More than R13 billion cash disbursed between

2000 and 2012• Applications received doubled in 2011/12

following Road shows/capacity building workshops

• Provincial consultations and National Indaba during June 2011, attended by 1,500 delegates

• Improved turnaround times over last 3 years: in particular post-adjudication phase

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NLDTF Disbursement1st April 2011 to 31st March 2012(R million)

SECTOR AMOUNT CHARITIES 791ARTS & CULTURE 542SPORT 673MISCELLANEOUS 45TOTAL 2,051

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NLDTF AllocationsProvincial Spread 2011/2012 (R million)

 Arts Charities Sport Miscellaneous TOTAL

Eastern Cape 38 (8.1%) 61(7.6%) 14 (3.6%) - 113 (6.7%)

Free State 5(1.1%) 48 (6.0%) 15 (3.8%) 19 (40.4%) 87(5.1%)

Gauteng 167(36.4%) 238 (29.8%) 160 (41.1%) 22 (46.8%) 587 (34.7%)

KwaZulu Natal 112 (24.4%) 101 (12.6%) 30 (7.7%) 1 (2.1%) 244 (14.4%)

Limpopo 37 (8.1%) 106 (13.3%) 52 (13.4%) - 195(11.5%)

Mpumalanga 11 (2.4%) 56 (7.0%) 15 (3.8%) - 82(4.8%)

Northern Cape 3 (0.7%) 22 (2.7%) 7 (1.8%) - 32 (1.9%)

North West 11 (2.4%) 50 (6.3%) 16 (4.1%) - 77 (4.5%)

Western Cape 75 (16.3%) 116 (14.5%) 80 (20.6%) 5 (10.6%) 276 (16.3%)

TOTAL 459 798 389 47 1 693

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NLDTF Allocations..Provincial Spread Comparison

Province 2011/12 2010/11 2009/10Eastern Cape 7% 9% 8%Free State 5% 4% 4%Gauteng 35% 38% 26%Kwazulu-Natal 14% 12% 3%Limpopo 12% 6% 3%Mpumalanga 5% 4% 3%Northern Cape 2% 2% 2%North West 5% 5% 3%Western Cape 16% 19% 14%National Bodies 34%

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Budget for 2012/2013

SECTOR AMOUNT IN RMILLIONArts, Culture & National Heritage

684

Charities 1,099Sport & Recreation 537 Miscellaneous Purposes 122TOTAL 2,442

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Current Status as at 31 Aug ’12 (R’000)

ARTS CHARITIES SPORT MISCEL TOTALBUDGET 684 1,099 537 122 2,442

ALLOCATED 91 431 65 37 624

BALANCE 593 668 472 85 1,818

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Challenges • Applications based funding model • Total dependence on NLDTF for existence of

organisations • Expectation of recurrent and ‘permanent’

refunding effectively crowding out new entrants from being considered

• Turnaround times

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Challenges • High rate of declines (due to non-compliance)• Fraudulent applications / fund use• Provincial allocation / spread inequities • Emotive publicized threats of downsizing operations and

services or closure because of the NLDTF has not allocated a grant

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Corrective Measures

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Administrative Actions

• Improve access to application documents (additional distribution points)

• Introduction of helpdesks• Increase timeframe for Call for Applications to

submission deadline (8-12 weeks)• Enhancement of NLB website (online tracking facility)• In-house scanning of all applications• Adjudication manual for DAs • Capping of allocations to facilitate more equitable

distribution

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Legislative Changes

• Other challenges were as a result of gaps in legislation and review of the Act in process and is expected to address inter alia:

– Responsibilities of the Minister, Board and Agencies– Improving efficiency in distribution of funds– Accountability of distributing agencies– Size of the Board– Composition of the distribution agencies– Enhanced conflict of interest measures– Proactive funding to complement application based funding– Possible extension of categories of areas to be funded– Provision of an appeals mechanism

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Future Plans

• Roll-out of regional offices to all provinces• Increase service offerings at Provincial offices• Simplified application process for smaller

grants• Online application submission facility • Impact study to inform strategic funding

model

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Lessons Learnt

• Need to formulate a much clearer funding policy for the NLDTF with a focus on “impact” rather than “giving”

• More proactive/strategic approach to communication-and stakeholder relations

• More concerted effort to publicize funded projects and achieve a balanced view

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Concluding Remarks• Appreciate the opportunity to account to and

engage with the Select Committee as the elected representatives of the communities we are appointed to serve

• Will appreciate – the advise and inputs of the Committee– An opportunity to provide more information at this or a

subsequent meeting

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Discussion

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