Institute of Fundraising calls for income cap on society lotteries to be raised to £100m

In its submission to an inquiry by MPs into society lotteries, the IoF says that increasing the cap from the current £10m would be more economical, particularly for larger charities

Lotteries
Lotteries

The annual income cap on society lotteries should be raised from £10m to £100m, the Institute of Fundraising will tell the House of Commons Culture, Media and Sport Committee’s inquiry into society lotteries.

Increasing the cap ten-fold would be more economical, particularly for larger charities, and enable them to maximise their fundraising, the IoF will say in its written submission to the inquiry before the deadline on Monday.

The CMS committee launched the inquiry in July with the aim of examining society lotteries and "their place within a system that includes the Health Lottery and the National Lottery".

Writing about the submission on the IoF website, Stephanie Siddal, policy officer at the IoF, says that the maximum permissible amount of ticket sales for a single draw should be increased from £4m to £10m to allow bigger, more popular charities to raise more funds for little extra effort.

Siddal also calls for an increase in the prize values society lotteries can offer from £25,000 to £100,000, and for lotteries to spend up to 50 per cent of their proceeds on prizes – up from the current 10 per cent – in order to boost ticket sales.

She reiterates the IoF’s call, made in its manifesto in July, for the rule obliging 20 per cent of all proceeds to go to good causes to be judged over a timeframe of three years rather than one, thereby removing barriers to entering the market and reducing the risks of setting-up and recruiting players.

The CMS committee said in July it would consider whether the regulatory requirements relating to the minimum amount of proceeds should be relaxed.

"Society lotteries have achieved strong growth in recent years, reflecting their popularity with the public as a means of raising money," writes Siddal. "But we think they could do more. By reducing some of the restrictions over prize limits, ticket sales, and allowing flexibility into the '80:20 rule’, we could enable society lotteries to raise more money for good causes."

The CMS committee plans to hold two or three evidence sessions in November and December, with invited organisations likely to include the Gambling Commission, the National Lottery operator Camelot and the Health Lottery, which is made up of 51 society lotteries acting under one brand.

Commenting in July on Third Sector’s article about the announcement of the inquiry, Mimi Turner, then director of sales and marketing at the Health Lottery, said: "All society lotteries face significant limitations on their ability to raise money. Prize restrictions, a lot of regulation and a difficult financial and consumer environment have made life harder. But without the money raised, thousands of charities would be worse off."

The People’s Postcode Lottery also supports the IoF’s view that the annual income cap on society lotteries should be increased – a statement from it in July called the cap "a major barrier to delivering more income to good causes".

The committee expects to publish its inquiry report in late December.

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