OP-ED

National Lottery is hopelessly bedevilled by a lack of transparency

By Shelagh Gastrow 7 November 2019

Illustrative image | (Photo: Adobestock)

With the concentration on State Capture, one would think that the National Lotteries Commission would be more sensitive to the desire for accountability and transparency, as should the minister of trade and industry.

There have been numerous articles on the National Lottery recently with complaints about dodgy grants. There is no doubt that something odd is going on, but why are we surprised? This has been a problem for years and nobody ever takes responsibility, from the level of the minister of trade and industry down to the very bowels of the lottery system. There is always an investigation that rarely provides the public with any outcome or conclusion.

If we track complaints about the lottery, it is possible to find comments going back to 2002 when the then minister of social development, the late Zola Skweyiya, expressed concern about the lack of transparency in the allocation of money for deserving causes.

Why can’t they just publish how much they give to whom and when, and what criteria they are using for that? That is my problem,” he said. “The way in which this money is distributed leaves much to be desired.”

And here we are in 2019, 17 years later, with a National Lotteries Commission that still refuses to publish its list of grants in case some of the organisations are hounded for money. What a pathetic reason for a lack of transparency in a country with a massive problem of corruption.

The history of the lotteries includes a litany of dubious grants and hopeless administration. In 2011, the lottery was taken to court by the SA Education and Environment Project and Sikhula Sonke for administrative incompetence. Judge Patrick Gamble found in favour of the NPOs and said that it was unacceptable for the National Lotteries Board to deny responsibility for the activities of the distribution agencies that make decisions on grants.

The distribution agencies are really where the murky world of the National Lottery sits. Members of the distribution agencies, which are basically small committees, are appointed by the minister of trade and industry and confirmed by Cabinet. They are the decision-makers when it comes to grants. There is one agency for each lottery programme: charities, sports, and arts and culture. This is where the mess generally occurs. The commission should have oversight, and according to Judge Gamble, it does, but in reality the distribution agencies are ministerial appointments and do not report to the commission. The commission only provides the administrative support required by these agencies, as poor as that administrative support may be.

Who are the people on these committees, who do they answer to, how do they make their decisions, are they qualified to do so or are they just recycled bureaucrats who hold ANC sinecures? An internet search merely provides names with no history or indication as to what qualifies them for the job. One wonders how many meetings the trade and industry minister holds with representatives of the National Lotteries Commission or the members of distribution agencies, as he is responsible for oversight. Is there any level of interference? Does the minister influence grants?

The lines of accountability are blurred, but it seems as though the decision-making itself might not fall within the control of the National Lotteries Commission, which appears from the outside to only undertake administrative support for the distribution agencies and is not actually involved in the decision-making. The questions we should be asking are: who is responsible for decision-making (the distribution agencies) and who is finally accountable (the minister)?

If we follow Judge Gamble’s judgment further, he said that there should be “no reason for funding applicants to partake in a game of administrative snakes and ladders, where the slightest non-compliance with self-imposed peremptory criteria means that one has to return to the start”.

Well, this type of activity continues unabated. Ask the many organisations who have waited anxiously for the lotteries to advise them on progress with their applications and finally, after frequent attempts to make contact, hear that they were missing a piece of paper. When requested that their pack is sent back to them, there it is – not missing at all.

Clearly, no care is taken by people working for the lotteries that they have an impact on the poorest of the poor, particularly those applying in the charities sector. This bad administration falls under the control of the National Lotteries Commission which still has the same chair as its predecessor, the National Lotteries Board years back, which received criticism from the courts. Little if anything has been done to improve performance.

So, back to the lack of transparency. Accountability and transparency are the values which underpin good governance and contribute to better performance by the civil service. Politicians and government employees seem to forget that they are appointed in service of the people rather than to gain power and act in their own self-interest. With the concentration on State Capture and the Zondo Commission, one would think that the National Lotteries Commission would be more sensitive to the desire for accountability and transparency, as should the minister of trade and industry.

But, as we know, the more things change the more they remain the same. The new concept of “proactive funding” where the lottery doesn’t wait for applications, but makes its own decisions as to where to distribute its largesse, is so open to favouritism and corruption that a lack of transparency can only lead to suspicion and anger.

The Organisation Undoing Tax Abuse’s recent report on grants made to two organisations to provide proper sanitation in schools, shows that grants were made to two entities that did not even have a website (that I could find). How does the interested public find out who they are, who is on their boards, whether they are audited and whether they can actually do the job? This secretive behind-the-scenes activity at the lotteries does not bode well for its relationship with the public and for the many organisations that seek support through the normal channels, as poorly managed as they are by the lotteries.

In many ways, the grant-making or charitable element of the lotteries is a side- show. The commission has two roles and the dominant one is the gambling side. The lottery has created a link between gambling and charity and many gamblers feel they are doing their philanthropic duty by buying lottery tickets.

Recently, the National Lotteries Commission commissioned the Bureau of Market Research at Unisa to undertake a study entitled “National Lottery Participation and Attitudes Survey in South Africa”. There are some eye-opening findings in that research.

First, it indicates that, “The less affluent population of South Africa represents a sizeable portion of lottery players, inclusive of the unemployed who represented 27.7% of National Lottery players. Also, about a quarter (23.9%) of National Lottery players are government grant recipients, while 42.2% earn a monthly income of less than R5,000.”

Keeping in mind that the vision of the National Lotteries Commission is The Catalyst for Social Upliftment, one of the incredible comments in the report is as follows:

During these challenging economic times, the NLC has envisaged that selling ‘hope’ through a game of chance, may prove to be lucrative to the sale of national lottery tickets (NLC 2018).”

All this double-speak while trying to sell hope to the poor – there is something fundamentally wrong with the values of this commission.

Ironically, the National Lottery is now trying to pull together a grant-making network to build capacity among all forms of grant-makers, including private philanthropy, before it has even fixed its own problems that were years in the making. DM

Shelagh Gastrow provides advisory services to the philanthropy sector, higher education advancement and non-profit sustainability. She works with individuals and families on how to integrate their wealth and their values into meaningful and effective philanthropy. From 2002-2015 she was founder and executive director of Inyathelo and focused her efforts on strengthening civil society and universities through programmes to develop their financial sustainability whilst promoting philanthropy in SA. Her work has gained public recognition locally and internationally.

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