The Institute of Fundraising is calling for the annual income cap on society lotteries to be increased from £10m to £100m in response to an inquiry by the Culture Media and Sport Committee.
As well as increasing the turnover limit to enable bigger charities to reach economies of scale and maximise fundraising, the Institute wants an increase in the amount of ticket sales from a single draw from £4m to £10m to allow popular charities to raise more money.
In a blog post published yesterday, Stephanie Siddall, policy officer at the IoF, says prize values should rise from £25,000 to £100,000, and from 10 per cent of the proceeds to 50 per cent to give operators more flexibility on prize values to maximise the overall amount raised through increased ticket sale.
Under current regulations, society lotteries have to return a minimum of 20 per cent of their proceeds to good causes.
The Institute is calling for the 20 per cent to be aggregated to allow charity lotteries to spread the requirement for all draws, and for it to be achieved over three years rather than one.
This would remove barriers to entering the market and reduce the risks of setting up and recruiting players, Siddall says.
In a joint submission to the committee’s inquiry the Hospice Lotteries Association and the Lotteries Council are making the same calls for increases on the annual income cap, tickets sales and prize limits.
The CMS committee launched its inquiry into society lotteries in July, saying it would look at relaxing restrictions on the market, including the minimum amount of proceeds, known as the 80:20 rule.
It aims to examine the role of charity lotteries in a sector that includes the Health Lottery and National Lottery.
Concerns about the umbrella schemes like the Health Lottery, which operates as 51 society lotteries, prompted the Department for Culture, Media and Sport to announce that it planned to run a consultation on society lotteries in December 2012, which is yet to take place.
Mid-year figures from the Gambling Commission show society lotteries raised a record £163m for charities between October 2012 and September2013.
Siddell says in her blog: “At a time of falling public spending and increased demand for services, it’s important that the ways we have of raising money can deliver most effectively for charities.
“In our Manifesto for Fundraising, launched this summer, we pointed to the potential for more money to be raised through society lotteries by reducing legislative restrictions so we’re glad that government are going to be looking at this area.
“Lotteries are great for fundraising; they offer a unique way of engaging and reaching with supporters as people are motivated by the prize as well as the cause and are an effective way of developing brand awareness.”
Research by the Centre for Economics and Business Research, commissioned by the Institute and the Lotteries Council, showed society lotteries continued to increase their revenues throughout the downturn.
The main feature in this month’s edition of Fundraising Magazine looks at the growing case for relaxing the restrictions on society lotteries. Click here to subscribe.
