Lottery limits see charities miss out on £45m

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Seven in ten applications for funding to charity lotteries have to be rejected as a result of fundraising restrictions

24th April 2019 by Gareth Jones 0 Comments

Local charities are losing out on vital funding due to outdated fundraising laws, a new report has revealed.

Small Change: how charity lottery limits impact on small charities, by charity research experts nfpSynergy, has found there has been a huge increase in funding applications from small charities to local funding trusts supported by players of People’s Postcode Lottery. However legislation governing the sector hasn’t kept up with increased charitable need.

Since 2012 the value of total applications has soared from £5.9 million to £58.3 million, however, because the trusts are limited by law from raising any more money, over the last two years only three in every 10 applications could be awarded funding.

The restrictions meant that over the last two years, the three trusts which award grants of up to £20,000 to small and local charities across Britain, had to turn down 3,740 applications worth £45 million which would have qualified for awards - including from projects to help children with their mental health and to tackle loneliness among older people.

The worst Scottish constituency affected was Edinburgh North East and Leith, which saw applications worth £528,024 rejected.

People’s Postcode Lottery has continually called on the UK Government to raise the legal limits, and last year Westminster said their “preferred option” was to raise the charity lottery sales limit from £10 million to £100 million. However continued delay in implementing this change means even more local charities could lose out.  

Clara Govier, managing director of People’s Postcode Lottery, said: “This report lays bare the massive prize for local charities and good causes across Britain from reforming the outdated charity lottery laws.

“The government can unlock millions of pounds in extra funding at the stroke of pen by raising the current caps on charity lottery fundraising, which are which are holding back organisations from improving the lives of people up and down the country.

“We hope Culture Secretary Jeremy Wright and Charites Minister Mims Davies will see the enormous amount of good that can be done at no cost to the taxpayer and update the rules as soon as possible. Further delay will mean that more local charities lose out.”

Report author, Joe Saxton, of nfpSynergy, said: “There is rarely such a good example of a change in the law which results in a ‘win/win/win’ solution. Raising the charity lottery limits is a win for funding for small and large charities, a win for reducing unnecessary costs and administration which the public so dislike, and a win for the people that charities exist to help.

“The current charity lottery limits are a regulatory straightjacket on charity fundraising. The lack of a government decision on raising the charity lottery limits is increasingly detrimental to charitable activities. The government is out of step with its own MPs and with the public if it doesn’t take measures forward to raise charity lottery sales limits.”

A new £100 million annual sales limit would allow thousands more local charities to access vital funds. It was proposed by the official regulator the Gambling Commission and has won widespread support in the charity sector, including from The Lotteries Council, the Institute of Fundraising, the Hospice Lotteries Association and over 80 major charities.

Polling by nfpSynergy also found public backing for the reform, with just 16% of people thinking charity lottery ticket sales should be capped, while MPs from across the political spectrum have also backed the change in recent Parliamentary motions in both Westminster and the Scottish Parliament.

Ministers are considering their response and promised a decision in the first half of 2019.

The report analysed the impact of the existing limits on three trusts funded by players of People’s Postcode Lottery, which provide grants of up to £20,000 to small local charities across Britain.  It found all three “are constrained by the annual sales limits from raising more for small charities”.