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.
NPOs at risk
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 yesterday 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.
Key funding stats
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.
Despite thousands of submissions, the Distributing Agency has successfully adjudicated only 28.6% of the 3,137 compliant applications received so far. That makes 1281 applications.
R170m went to arts, culture and national heritage and R224M to the sports and recreation sector.
The delays are hitting home
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.
NLC Commissioner Jodi Scholtz defended the slow pace, noting that the delays are not a failure of the entire system but are concentrated in “cases requiring compliance resolution”.
“Importantly, where applications are compliant and adjudicated, the NLC achieved 92% adjudication within the legislated 150-day period,” Scholtz stated.
Trying to restore public trust
To restore public trust, the NLC Board has overhauled its policies to ensure money reaches the right people.
Professor Barney Pityana, NLC Board Chairperson, emphasised that the focus is on “projects that alleviate poverty, reduce inequality, and empower vulnerable groups”.
The agency hopes to have all current outstanding applications ready for a final decision by 31 May 2026.
“It is further anticipated that the adjudication of these applications will be completed by October 2026, subject to budget availability,” it said.
Until then, many locals, such as soup kitchens, youth sports clubs, and shelters, are left waiting to see if their funding will be “rolled over” or cut off entirely in the new financial year.
What the people have to say
Reacting to NLC’s statement, social media users appreciated the update.
One, an applicant of the 2024/25 cycle, under Phinda-Mzala Entertainment Project, said: “We welcome this update from the National Lotteries Commission. As one of the applicants in the 2024/2025 funding cycle, I found the process challenging, especially regarding compliance requirements with the Department of Social Development.
We appreciate the NLC’s commitment to improving the system and supporting community organisations serving disadvantaged communities.”
Another expressed their dissatisfaction with their declined application: “I don’t understand why our application was declined. The declined letter states: ‘The application does not meet the mandatory requirements because the organisation is a sports club, and sports clubs are excluded from the 2024/25 call for applications.’”
The user explained that their sports club is a registered NPO with the DSD and is compliant with NLC’s guidelines.
Non-profit sports clubs are eligible for NLC funding, but they generally apply under the Sport and Recreation Sector rather than the Charities Sector.
Other users expressed fear that more declined applications will roll in as an attempt for the NLC to meet the already overdue deadline.
