Presentation to the 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

DAs adjudicate applications and make grants in line with criteria Introduction Regulation National Lottery: Operated by Gidani (34% of sales to NLDTF) Other lotteries Distribution Process applications and make payments Charities 45% Arts 28% Sports 22% Miscellaneous 5% DAs adjudicate applications and make grants in line with criteria

NLDTF Revenue & Disbursement 1st 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

NLDTF Disbursement per Sector 1st April 2000 to 31st March 2012(R million) AMOUNT CHARITIES 6,623 ARTS & CULTURE 2,805 SPORT 3,324 MISCELLANEOUS 261 TOTAL 13,013

NLDTF Revenue & Disbursement 1st April 2000 to 31st March 2011(R million)

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 

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  

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

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

NLDTF Disbursement 1st April 2011 to 31st March 2012(R million) SECTOR AMOUNT CHARITIES 791 ARTS & CULTURE 542 SPORT 673 MISCELLANEOUS 45 TOTAL 2,051

NLDTF Allocations Provincial 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%) 82(4.8%) Northern Cape 3 (0.7%) 22 (2.7%) 7 (1.8%) 32 (1.9%) North West 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%) 459 798 389 47 1 693

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

Budget for 2012/2013 SECTOR AMOUNT IN RMILLION Arts, Culture & National Heritage 684 Charities 1,099 Sport & Recreation 537 Miscellaneous Purposes 122 TOTAL 2,442

Current Status as at 31 Aug ’12 (R’000) ARTS CHARITIES SPORT MISCEL TOTAL BUDGET 684 1,099 537 122 2,442 ALLOCATED 91 431 65 37 624 BALANCE 593 668 472 85 1,818

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  

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  

Corrective Measures

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

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

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

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

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

Discussion