First letter - 18 March 2011

First letter - 18 March 2011

Minister Rob Davies

Department of Trade and Industries

I am deeply concerned – or more accurately, sick, tired and angry – about the failure of the National Lotteries Distribution Trust Fund (NLDTF) and the National Lotteries Board (NLB) to live up to their mandate. Multiple organisations, vital to the social fabric of South Africa, have been weakened, or suffered complete collapse. It is true that Government cannot, and should not, be responsible for the survival of individuals and vulnerable groups, the enrichment of community through the arts, or the chaos of thought and practice that results in new ways to develop and govern our world – this is the job of NGO’s, charities and think tanks. Government’s job is to build and protect the environment in which these organisations work. The NLDTF was established, in part, to do that. However the inefficiencies of the NLDTF militate against success. It would be simplistic to blame management and staff for all the weaknesses – though inordinate delays and lost documents make this tempting, and many people do. There are, however, structural and design weaknesses which add to the problems: for example, the Distributing Agencies (DA’s) are staffed by part-timers, which makes delays in their processes a certainty.

Things need to be fixed!

This is not to say that the NLB and NLDTF have failed completely, or are inappropriate for this country. We need to acknowledge that attention has drifted from South Africa since 1994 – and now centres on North Africa, the Near East and Japan. This, combined with global economic woes, has made funding for South African NGO’s much more difficult. The designers of the ‘Lotteries’ understood the context and established a good solution. Those in charge today have to learn from experience, and fix the weaknesses – not throw the baby out with the bathwater.

Minister Davies, the design, systems and staffing you inherited do not fulfil government’s ambition, and can (without too much difficulty) be fixed. The first step towards a solution should be to answer the question “who is the master, and who the servant in the relationship between the NLDTF and the broader community of South Africa, represented by the charities and NGO’s it funds?” To my mind, the relationship has been inverted: – the NLDTF should serve us, not arrogate to itself the role of a modern Medici. In short it is not their money! They are not successful capitalists or robber barons distributing largesse. They are agents of our government, set up to serve the poor by returning to them money taken largely from them by an indirect tax in the first place.

Here are some of the questions that need to be answered:

Firstly; how do you measure the efficiency and success of the NLDTF and its staff? Certainly, the “stakeholders or clients” do not participate as they should. If they had been consulted democratically, much would have changed by now. Not once in the last three years has management managed to distribute as much as half of the funds available.

South Africa has the skills and the will to manage the NLDTF: We ran a world-beating World Cup – and for those who remember the election of 1994.Many have gossiped about how much the members of the DA’s are paid. My question is: do we pay these people enough to make them take the time necessary to do what we ask of them, and do we adequately support and evaluate the processes they employ?

Secondly; how, by whom, and at what cost and benefit is the non-distributed money managed? I hope it’s not just “in the bank”? It would be great if a simple report – income, cost to administer (with some detail) grants made (and to whom), and amount retained – is published twice a year.

Third, and unavoidably; the question everyone else has asked – what happened with the Youth debacle?

To put it more clearly, what does it cost to operate the NLDTF? If my rough calculations are valid (they’re based on the website, history and public comments) as much as seven hundred million rand has probably not been distributed during 2010. Why not, and where is the money?

This is not just another whine and groan letter: I volunteer (at no cost to government, the National Lotteries Board or the NLDTF) to put together a team including management, members of your staff and experts to assess the situation, recommend short- and longer term changes, and help ensure that the institution delivers more fully on its mandate.

In conclusion: The very existence of the NLDTF has changed the funding environment. Management of big business tends to fund things in which they personally take an interest, or are driven to fund by ‘Enterprise Development’ pressures from government. “That’s the lotteries’ job” is a refrain too often heard when fundraising. Also, rich South Africans seem to part with their cash less readily than rich Americans (thanks, blessings, and all hail to those who do!). Consequently, any thought of closure or changing over to a ‘State Lottery’ where the funds go into general government coffers (like sin taxes) must be resisted.

Lastly, I have resigned from the boards of two organisations dependent on lottery funding to avoid any malicious response to this note. I have confidence, Minister,that you will instruct that no such action takes place.

Run properly, the NLDTF is a positive intervention by government. Let’s ensure that its mandate is fulfilled.

Yours in struggle, Ralph Freese