A new report from the Centre of Economic and Business Research (Cebr), ‘What have we got to lose? How society lotteries could do even more for good causes’, calls on Ministers to build on the success of the lottery model for charity fundraising by relaxing present restrictions.
The report was commissioned by the Lotteries Council and the Institute of Fundraising ahead of a forthcoming consultation into society lotteries by the Department for Culture, Media and Sport.
The consultation is expected to consider imposing tighter restrictions on the society lottery sector, despite it raising £155 million for good causes in 2012/13, which the report notes is “a figure which has increased in every year since the financial crisis, over which time personal giving has faltered” and National Lottery sales have soared.
The report warns that this figure could be cut in half – a loss of almost £90 million – if the government goes ahead with proposals to tighten regulatory controls on the operations of society lotteries.
Currently society lotteries are required to donate 20% of their proceeds to good causes. The Cebr research estimates that proposals to raise this to 28% could reduce the contribution made to good causes by £35.3 million as many lotteries cease operating and others scale back.
The research also estimates that introducing a limit on lotteries’ operational expenditure at 15% of total proceeds would lead to the loss of £88.3 million in donations.
To capitalise on the growing popularity of society lotteries, Cebr suggests that were the consultation instead to consider a relaxation of the present limits on individual prize draws and turnover limits, this could boost the amount of money raised for good causes.
For many hospices, lotteries are an important source of income. There are around 120 weekly hospice lotteries, contributing to more than 135 hospices throughout the UK. The average income made by a hospice from lotteries is more than £250,000 per hospice.
The Cebr report was launched in Parliament at the end of February. Chris Routley, Chairman of the Hospice Lotteries Association (HLA), was at the launch and welcomes its findings.
Chris said: “The report confirms our long held belief that increasing the 20% minimum contribution rule and introducing a cap on expenses will have a detrimental effect on a hospice’s ability to grow its lottery.
“I was encouraged by the responses from the MPs, during the presentation of the report in the House of Commons, who demonstrated a clear understanding of the potential adverse effect on income that would be experienced by the society lottery sector, and their associated good causes, should the proposed changes be allowed. There was, also, an apparent nod to the notion of de-regulation leading to an increase in money going to good causes; as proposed in the report.
“As well as providing a vital and reliable income stream, hospice lotteries are also valued for recruiting players who go on to support the charity in other ways. Any further regulation which limits the hospices’ ability to promote their lotteries will have unintentional implications extending beyond the lottery sector and impact fundraising in general. The HLA will be supporting the Lotteries Council and The Institute of Fundraising in ensuring the Cebr report is communicated effectively and giving the clear message that the society lottery sector is united in opposing any tightening of regulatory controls.”
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