Barry Streek
The state lottery had accumulated sales of more than R2-billion at the end of last year, but only R4,1-million has been paid out to 80 charities in “emergency funding”, Minister of Trade and Industry Alec Erwin has disclosed.
This represents just more than 1% of the money available to charities from the total amount accumulated from sales.
According to the Lotteries Act proceeds are distributed according to a formula that provides for 40% to be allocated to prizes, another 40% to charities and the remaining 20% to the lottery operator and tax.
Despite making appointments to some of the boards of distribution agencies bodies that make recommendations about deserving charity organisations there is still no plan from the Lotteries Board or the Department of Trade and Industry on what steps need to be taken to ensure speedy distribution of the lottery’s proceeds.
Leon Isaacson, manager of government and corporate relations at the Western Cape Community Chest, says: “The non-profit sector believes that it should be consulted and that the public is entitled to know what the position is with the funds raised by the lottery.
“This year has started off with almost absolute silence from the department and the Lotteries Board.
“Surely the public has a right to know what is happening.”
The Democratic Alliance’s Nigel Bruce criticises the government’s inability to distribute funds timeously.
“Some of these charities have had to curtail their activities and others fear they may soon have to close down,” Bruce says.
He blames the delay on a black empowerment company connected to the African National Congress elite “while the poor, the sick and the suffering are abandoned”.
Erwin, who was replying to questions tabled in the National Assembly, said interest earned from unclaimed prizes was paid to the Lotteries Distribution Trust Fund (LDTF).
In terms of the law, after a year unclaimed prizes are split equally between the operator and the LDTF.
Erwin said while the Cabinet did not make a decision on the exact amount of funds that should accumulate before payments are made, “the principle informing the need to accumulate funds came from a pragmatic approach to developing a sustainable and predictable funding environment for NGOs and charities in South Africa.
“Having a substantial reserve enables us to ensure continuous support to NGOs and charities for the duration of the licence, which, in this instance, is seven years.”