CAPE TOWN - Welfare organisations who haven’t received lottery funding this year have spoken about their plight, saying they may be forced to close down or drastically cut their services to the poor.

“We’re in a desperate situation. The people we support with food parcels twice a month were crying when we told them we would probably not be able to help them anymore.  They have nowhere else to go for help,” the chairperson of the Port Alfred Benevolent Society, Joy Altson, told Moneyweb.

After years of support from the National Lotteries Board, Alston was informed that her application had been turned down because of “insufficient funds” and a decision “to fund only first-time applicants”.

She says this came as a shock. 

“I put in a huge appeal. I said: ‘If you have to give me less, then you have to do it. But don’t cut me out completely. I can’t turn around to 1 500 people and say: ‘I can’t give you anything.’”

But the NLB hasn’t responded. “If we don’t get money from the lottery, we’re going to have to close down.”

The society’s community gardens and skills programmes are also at stake.

Alston’s story is one of many that have emerged this week, a week in which there’s been a flurry of criticism about the way in which the lottery money is distributed.

On Friday morning, about 400 protestors, mostly from NGOs, marched on the offices of the National Lottery Fund in Pretoria.

“It’s time we made our voices heard,” said NGO trainer, Sandra Miller, who convened the protest. She said non-profits have been wary of protesting in the past as they don’t want to jeopardise their applications to the NLB.

Civic leaders, NGOs and the Democratic Alliance have all spoken out about the lottery funds this week, with the DA’s spokesperson on Trade and Industry Jacques Smalle alleging that it had seen “a growing trend of NGOs being overlooked in favour of ANC-affiliated organizations.

“As a result, poor people suffer while party elites benefit”, the DA has charged.

But the Department of Trade and Industry’s spokesperson, Sidwell Medupe, says the process of adjudication is performed by independent distributing agencies “with no room for any political organisation to influence.

“These committees act without fear or prejudice in the interest of all South Africans”, he told Moneyweb.

Alarm bells were sounded just over a year ago when R40m in lottery funds was given to the ANC-affiliated National Youth Development Agency (NYDA).

More recently, Shelagh Gastrow, the founder of Inyathelo, the South African Institute of Advancement, which assists NGOs, raised what she alleges was “an extremely dubious payment” to Makhaya, an organisation based in Serbia that says on its website that it promotes the arts and tourism to South Africa.

“It’s a for-profit company masquerading as a non-profit. When we looked it up, we discovered they supply services to the South African diplomatic corps and run events for them. Many staff members live in Serbia, yet they walk off with R50m from lottery funds,” she told Moneyweb.

The DA claims that the NGO employs the daughter of the National Lotteries Board chairperson, Alfred Nevhutanda. 

Administrative glitches can also lead to funding cuts.

CEO of Sparrow Ministries, Rose Letwaba, says it appears an administrative error put an end to its funding for this year.

“The NLB’s excuse was that we sent our application with the number on the envelope instead of on the document. We had applied for R29m. But we got nothing. We’re just waiting for the end of the financial year. But we’ve already called in the staff to say we’ll have to retrench people.”

For the past few years, the NLB was the key funder for the Sparrow Ministries hospice and children’s home looking after 225 children and 80 adults. 

NGOs applying for funding have to fax their documents to the NLB. If small administrative mistakes are made or papers lost, claims are often rejected – and there’s no appeals process. They say it’s devastating when they rely so much on lotto funding.

“We’re just hoping that someone at Lotto will see things from a grassroots level. We don’t do our work for the money. We do it for humanity,” says Letwaba.

Miller says haphazard and ‘biased’ dispensing tactics have come at a particularly bad time for welfare agencies and NGOs.

“It couldn’t come at a worse time when corporate South Africa is broke. The recession has taken its toll.”

Gastrow believes the distribution system is “fatally flawed and unworkable”.

“There’s no process by which people can object to a decision. There’s no clarity about what the lottery is for. Even municipalities can apply for funding.

Gastrow believes the system needs to be urgently overhauled.

Amendments to the Lotteries Act are already on the Parliamentary programme of the Portfolio Committee on Trade and Industry.

But Gastrow says tinkering alone will fall far short of what’s needed.

Both Gastrow and the DA have called for board members on the NLB’s distribution agencies to serve full-time.  Currently, they only serve 1.5 days a month. “This means grants don’t get processed and money goes unallocated,” says Smalle.

Medupe says he’s aware of the backlog. “The minister has impressed on the NLB that it must implement measures to improve turnaround times. These are being monitored closely.”

During a press conference in Pretoria on Friday, Nevhutanda, conceded that they needed to find new ways to deal with the backlogs.

“We take allegations made in the media seriously – claims of requests for bribes, losing information and irregular grants.  Remedial action will be taken where needed,” he told journalists.

But, for now, his words hold cold comfort for people like Letwaba and Altson.

*Kim Cloete is an experienced journalist with a keen interest in the political economy. Before pursuing a career as an independent journalist, she spent time as a television journalist and later Parliamentary Editor for SABC Radio and TV News. Kim was awarded a Nieman Fellowship at Harvard University in 2005/06 and has received several national and international awards for her work.