The South African National Lottery

South Africa is a country beset by high unemployment and poverty rates. As a result, society relies significantly on the support offered by various charitable, not-for-profit and non-government organizations. A considerable proportion of the financial support offered to such organizations is collected and distributed through South Africa’s national lottery organizations.

The National Lottery of South Africa is currently operated by Ithuba, the third license holder for the state lottery. on behalf of the National Lotteries Commission (NLC). During the financial year ending in 2019, Ithuba raised more than USD100 million in support of good causes. The NLC, through the National Lottery Distribution Trust Fund (NLDTF), directed the funds raised to three sectors: charities, sports and recreation, and arts and culture.

Snapshot: ECD Legacy Project

In South Africa, there is a marked education gap in poor and rural communities. In support of the government's development goal towards national development and quality early childhood education, the NLC established the Early Childhood Development legacy project to focus on promoting access to quality education for underserved and disadvantaged communities. Close to 12,000 learners benefit from these schools and learning centers annually.

Among the projects undertaken through this project are the development of 203 early childhood development centers, which included 95 buildings. The project not only contributes to infrastructure, but also to the training and development of National Qualifications Framework (NQF)-certified educators.

Indirect benefits to society realized through this project also include job creation for construction workers as well as ECD center administrators.

Noteworthy achievements

During the 2019 financial year, Ithuba contributed over USD 1.1 million to good causes through the NLC and the NLDTF. Eighty-three percent of lottery funding beneficiaries received their grants within 60 days of approval. In addition close to 26,000 jobs were created thanks to grants received. The money to good causes raised by the lottery saw an increase of 156% in revenue.

Snapshot: Imbewu Community Development

Poverty and, therefore, hunger are a reality for many South Africans. The Imbewu Community Development program, established in 2017, aims to equip people with the necessary permaculture and sustainable agriculture skills to effectively feed their families and communities. The program seeks to alleviate food security issues by providing people with the skills and tools to provide for themselves and their families without seeking employment.

The primary focus of the Imbewu Community Development project is providing seedlings and vegetation for sustainable permaculture, as well as training community members in sustainable agriculture and starting their own food gardens.

Beneficiaries are ultimately also able to sell their excess produce at local markets, thus enabling ongoing income generation. To date, the project has helped create four permanent and six temporary jobs.

2019 was the first year that this organization received funding from the national lottery, and it successfully trained 100 people in self-sufficiency and income-generation.

Overview of organisations involved

The National Lotteries Commission is South Africa’s governing body concerning all lottery and sports pool activities. It has the sole national mandate to regulate lotteries and sports pools.

The Commission oversees the activities of Ithuba, which runs the lottery games and collects funds. Ithuba is the largest lottery in Africa, and accounts for fully half of total sales on the continent.It is a privately owned entity and has held the license to operate the lottery since 2015.

The National Lottery Distribution Trust Fund is the arm of the NLC which is responsible for all charitable disbursements.

Distributing money to good causes

Ithuba contributes to three primary charity sectors: 47% of funds distributed went to social programs and charities; 28% to sports development; and 23% to arts and culture. The remaining 2% went to miscellaneous recipients. For the financial year ending in 2019, total money to good causes totalled USB0.3 billion, which was an increase of 6.9% over the previous financial year.

Any registered charity or non-government organization domiciled within South Africa and which falls under a relevant category can apply for lottery funding. Applicants are evaluated on a needs-analysis basis, and priority is given to the three primary sectors mentioned below:

Arts and culture

The South African National Lottery supports South African organizations that promote the preservation and development of arts, culture and heritage. Projects that receive support typically work to empower communities to help themselves, and enable artists to showcase their work internationally. The concept of “heritage” is treated broadly, and includes historical, architectural and natural environmental heritage.

Sports and recreation

Lottery support for this sector has exceeded ZAR4 billion over the 16 years since the first lottery was licensed in South Africa. National sporting bodies, regional bodies, local sports clubs, recreational clubs and schools are all eligible to apply for equity, access and development-based funding.

Social causes and charities

One of the primary functions of contributing money to good causes in South Africa revolves around the eradication of poverty and reduction of inequality. Organizations across social welfare, community health, literacy and social development all qualify to apply for lottery funding.

About Ithuba, the NLC and the National Lottery Distribution Trust Fund

Ithuba is the current license holder for the South African national lottery and is the country’s sole lottery operator. It collects funding through the sales of number-based lottery tickets and various other lottery games and distributes it to prize winners, the NLC and business expenses. The National Lotteries Commission (NLC) is the state-appointed governing body responsible for all legal lottery activities in South Africa. The National Lottery Distribution Trust Fund falls under the NLC, but is a discrete entity which is strictly responsible for disbursement of the money to good causes provided to it by the NLC. Due to the legislated structure, these organizations are able to maintain transparency and accountability, ensuring all money to good causes is properly distributed. To date, the NLDTF has successfully distributed funds among the qualifying recipients, meaning that every game played results in a contribution to South Africa’s social, sporting and cultural upliftment.