A report from last year found more than 70 percent of registered non-profit organisations risk being shut down.
Picture: Supplied
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 NLC reiterated a report from the Department of Social Development last year that more than 200 000 of the 280 000 registered non-profits risk being shut down because they cannot meet basic reporting rules. More than 6 000 organisations had been deregistered nationally by February 2025.
The Commission told The Citizen on Tuesday that they had not received updated numbers from the department, but that a large number of charities remain affected. The department has yet to respond to The Citizen‘s request for comment. This will be included once received.
Key funding stats
The NLC said the call for applications, which ran from 2 December 2024 to 19 December 2025, saw only 3 137 compliant applications received across all provinces. Adjudication commenced in August 2025.
“To date, the distributing agency has adjudicated more than 1 281 applications. This represents 28.6% of the total applications received, with the remaining applications to be rolled over into the new financial year for completion,” the commission said.
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.
The delays are hitting home
Many NPOs failed their applications due to “incomplete or inadequate financial documentation, quotation deficiencies, insufficient project planning and programme details, governance, registration, and institutional compliance gaps, prior funding history, risk flags, and compliance status, legal agreements, ownership, and asset control and capacity, accreditation, and service delivery credibility.”
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, applicants expressed gratitude and frustration.
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 dissatisfaction with their application being declined.
“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.
Others expressed fear that more applications will be declined as the NLC attempts to meet the already overdue deadline.
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