A chance to win for lotteries
Society lotteries have become a key part of fundraising, raising a record £255.56 million in 2016-17. But they are also the most regulated area of fundraising – with specific limits set on the amount of prizes that can be given and restrictions on annual sales.
As lotteries have grown, the limits are starting to bite and are restricting growth as well as causing administrative problems. In this context, the Government launched a consultation which proposes raising per draw limits and annual sales limits of large society lotteries. This will provide an opportunity to reform this type of fundraising for the better.
We have been working with our members to seek their views, and have responded today in favour of introducing flexibility in the system and raising the limits for society lotteries.
Time for a change
A review of lottery regulation has been eagerly awaited by many. The limits were last changed ten years ago so it is really positive that, having reviewed the evidence from the Gambling Commission and the CMS Committee’s call for evidence, the Government has proposed to raise the limits and introduce more flexibility for society lotteries. Over the last month or so we have asked our members via a survey what their thoughts and preferences were on the proposed changes and democracy has spoken: the majority were in favour of raising them.
This is an opportunity to get regulation working better, so it can do more for charities and their beneficiaries. We recommend the maximum limits in every area that the Government has opened up for dialogue, in line with our survey respondents; for example, 69 per cent agree that per draw limits should be raised, with 52 per cent favouring a £10 million ceiling.
Of course, this doesn’t mean charities must aspire to these levels; but it will make a difference to reduce the admin costs and bureaucratic confusion of those currently forced to set up a second draw or a second society to avoid breaching limits.
While the consultation has a number of positives, the proposals might have gone further to future proof lotteries from further growth. For example, our response notes the problems caused by the minimum contribution (the ‘20 per cent rule’), It discourages new entrants into lottery fundraising since start-up costs mean society lotteries struggle to reach the minimum to good causes in the first year. We would like to see more flexibly applied in this area.
Tracey Crouch: lotteries “are a fundamental part in the giving landscape”
We were keen to emphasise in our response that the benefits of running lotteries are not just monetary: 70 per cent of charities in our survey reported that lotteries bring new supporters that haven’t supported before because they offer a way to reach different audiences; 67 per cent reported increased brand awareness as a result of running a society lottery; and 53 per cent said those playing have gone on to support in other ways (e.g. a direct debit or other donation). Raising limits will enable both small and large charities to build up their lottery programmes, establish greater reach, and therefore broaden support to their cause.
As with all types of fundraising, it is essential to think about how to make sure supporters have the best experience possible. Charities need to be mindful of how they choose to promote their lotteries, both in terms of an awareness of responsible gambling, as well as thinking about the channels that they use to promote society lotteries with a view to improving the donor experience.
A joined-up approach between the promotion of lotteries and the teams or channels through which we speak to the public is key here. As we’ve been working with members to review the rules on society lotteries, we’ve also worked to develop some short new guidance for charities on what to think about when running a lottery responsibly – we’ll be publishing that soon.
It is really pleasing to see the Government recognise the importance of lotteries and put forward the changes needed for lottery fundraisers to reach their full potential. We look forward to the results of the consultation exercise and hope to see outcomes that can enable charities to raise more money for the causes that so vitally need it.
Lizzie Ellis, Policy and Information Officer at the Institute of Fundraising