NLC overhaul could leave 200 000 charities scrambling for survival

A major “tightening of compliance” at the National Lotteries Commission (NLC) is creating a bottleneck for community funding across South Africa. As the agency moves to an all-digital system to root out historical looting, many small organisations are struggling to keep up. The NLC’s new Thuthuka online system was built to automate grant management and stop fraud.

However, the transition has exposed a massive “compliance gap” in the charitable sector, the NLC revealed. The Department of Social Development, according to NLC, warned on Monday that more than 200 000 of the 280 000 registered non-profits risk being shut down because they cannot meet basic reporting rules. The complex new system has already seen more than 6 000 organisations deregistered nationwide.

The NLC said the total approved funding for the current cycle amounts to R1.19 billion. Within this budget, the charities sector received the largest allocation, totalling more than R804 million. R170m went to arts, culture and national heritage and R224M to the sports and recreation sector.

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Despite thousands of submissions, the distributing agency has successfully adjudicated only 28.6% of the 3 137 compliant applications received so far. That makes 1 281 applications. Many NPOs failed their applications due to “incomplete financial documentation” or “insufficient project planning”, it said. For communities, this means vital social services remain in limbo while the NLC verifies physical addresses and the legitimacy of directors.

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