Sustaining CSO financial viability – can lottery proceeds h
lotteries - not a key source of revenue for sector / substitute to other sources
risks include mismanagement
and misallocation
of funds
(reputational risks)
European Center for Not-for-Profit Law
Vanja Škorić, Senior Legal Advisor
3. Bodies that decide and
distribute proceeds
6. Procedures and criteria for selection
clear, transparent criteria
published in advance
2. Strategies and programs for defining priorities for funding
Lessons learned - what to consider
Ireland: different government departments
Croatia: NFCSD - three-step process with different bodies included (commissions + management board); different government bodies
UK - National Lottery Distribution Fund (NLDF) - passes funds to 13 Lottery distributors - independent, nongovernment organizations specialized for specific sector (sports 5, arts 5, heritage 1, Olympic 1, Big Lottery Fund - social issues)
Netherlands - Postcode Lottery - independent Supervisory Board
Lessons learned - what to ask
Ireland: National Lottery act
Croatia: NFCSD - Statute and Strategic Plan; government strategies and programs of public needs in different area (for gov. bodies)
UK - largest - Big Lottery Fund - combination of policy directions from governments (England, Scotland, Wales and Northern Ireland) on key social and economic issues + public consultation
Netherlands - Postcode Lottery - governing board decides on priorities
Ireland: ministries have 2- process: department commission + ministerial decisions;
- criteria include clear benefits for area of funding
Croatia: NFCSD - extensive and elaborate procedures of public tenders and calls (3-step procedures) in rulebooks;
- criteria include:
focus on promoting values of the constitutional order
- activities aimed at satisfying needs of the community and achieving sustainable development;
- assessed as significant for development of civil society
- NFCSD systematically evaluates program and financial part of implementation
- What are the aims of the lottery model?
- Which areas to support?
- Which activities should be eligible?
- What types of grants are needed?
- How to ensure transparency and public support / minimise political interference?
- Should CSOs be part of the decision-making process?
- What is effect on the player?
independent experts
involved in funding decisions
process of checks and balances, accounting and reporting
Numbers
1. Legal basis for funding CSOs
with lottery proceeds
measures and policies
for responsible
behaviour and gambling principles, awareness raising and education campaigns
State: 2012 - over 60 % of gross revenue
in EU returned as contributions and funds
for sports, culture, charity and social projects, science, health, research, education, youth, environment and development
Ireland: lottery act
Croatia: law on games of chance,
government decree on criteria, law on national foundation (NFCSD)
UK - lottery act
Netherlands - law on games of chance + lottery license + registration as non profit organization
The World Lottery Association estimates
national (state) lotteries generated US$189 billion in 2013
6. Procedures and criteria for selection
Private: total amount raised by members of Association of Charity Lotteries in the EU in 2015 - more than 600 million euros for almost 300 NGOs
PROS:
- lower operational costs
- high potential for continuous users and revenue
- separate funds reduce risk of corruption and political influence (example UK..)
Types - state run or private (charity) lotteries - pros & cons
Important features to look for:
UK - Big Lottery Fund Board and its Committees - members appointed in open process of selection.
- some grant schemes include 2-step procedure with shortlisting applicants
- criteria include:
demonstrate need that project is trying to meet;
show types of people who will benefit from project and evidence about their need ;
why project is the right approach to meeting the need
- developed monitoring system with different requirements for different types and scales of projects, information on achievements and change
- offers resources and guidance to grantees on evaluations
Sustaining CSO financial viability – can lottery proceeds help?
CONS:
- risk of increasing gambling population
- state has influence over policy and mechanisms for distribution
- risk of politicization if governments determine criteria/allocation
(example Croatia)
Lotteries
6. Procedures and criteria for selection
- legal basis for funding CSOs
- strategies and programs for defining
priorities for funding
- bodies that decide and distribute proceeds
- available amount of proceeds for CSOs and areas of support
- types of support and timeframe
- procedure and criteria for selection of beneficiaries
Characteristics of state lotteries
Netherlands - Postocode Lottery
- long-term beneficiaries criteria:
- work in specific sector / priority areas
- broad public support and public recognition
- ensures national coverage;
- has raised other private donations at least 1 million EUR
- is passionate and professional organization
Who decides priorities:
- Level and areas of support determined by law and/or decided each year by government (Croatia, Ireland)
- Level and areas of support determined by entities distinct from the government (United Kingdom)
Most EU countries
- state lotteries
Division of state lotteries
- Part of lottery revenue earmarked for good causes in specific fields
- Usually: national legislators decide on priority areas for funding - prescribed by legislation or decided on an annual basis, together with the national budget.
- In some states, part of the lottery go to specific ministry or foundation
Operating:
- administered by public authorities or
- licensed to private operators through bidding
5. Types of grants and timeframe
Characteristics of private lotteries
4. Available amount for CSOs and areas of support
PROS:
- reliable partner in sustainable development of CSOs
- attract people who might not normally donate to the CSOs
- excellent PR opportunities
- less political influence
4. Available amount for CSOs and areas of support
Ireland: Department of Children and Youth Affairs/ Health - one-off projects, short-term
Croatia: NFCSD support 2016 (few months - 3 years)
- institutional support for stabilization and / or development association;
- grant support for civic action
- call for prize award - volunteering development for children and youth
UK - Big Lottery Fund - various grant schemes, from £300 to over £500,000
- £300 and £10,000 for grassroots and community activity - up to 12 months
- matching funding coming from the European Social Fund from £330,000 - £10.6m - no time limit
Netherlands - Postcode Lottery - general: institutional grants
- Lottery operators, licenced, decide independently on the level and type of support
- Fundraising for civil society is main aim
- Funds distributed by an independent body without political interference
Ireland: 32% from total; Youth, Sport, Recreation , Health & Welfare, Arts, Culture & National Heritage and Irish Language.
Department of Children and Youth : €910,000 in 2014
Department of Health: €3,286,000 in 2016
Croatia: 50 % from total; projections in 2015 - 45 mil EUR
NFCSD 6,3 million EUR in 2015
32.95% development of sports
4.52% fight against drug abuse and other addictions
17.81% social and humanitarian activities
19.31% problems and needs of people with disabilities
4.01% technical culture; 12.41% culture
2.11% extra-institutional education and upbringing of children and young people,
6.88% development of civil society
CONS:
- high costs of operation
- direct competition to state run operators
- possible regulatory limits that
impact the revenue
UK - 28% from total
NLDF £1.9 billion in 2014/2015
Arts £000 390,934
Sports £000 390,934
Heritage Lottery Fund £000 390,934
Big Lottery Fund £000 781,871
Netherlands: Postcode Lottery - nature & environment, development cooperation, human rights and social cohesion 106 beneficiaries - total € 327,518,552 in 2015 (minimal grant
500 000 EUR)
Typical division of turnover:
- operational costs up to 20%
- remaining 80% equally divided between donations (40%) and prize money (40%)