The Zulu, at the National Arts Festival Grahamstown. File Picture: BAZIL RAUBACH
The Zulu, at the National Arts Festival Grahamstown. File Picture: BAZIL RAUBACH

The National Arts Festival (NAF) in Grahamstown is under threat because of the impact of a controversial new lottery funding regulation requiring a cooling-off period.

This emerged in a letter the Legal Resources Centre (LRC) sent to the Department of Trade and Industry on behalf of an informal coalition of non-government organisations.

Regulation 14 prevents beneficiaries from applying for funding for a year after receiving their last grant‚ which the LRC says could result in funding droughts of up to 24 months. The South African Sports Confederation and Olympic Committee raised the same concern recently‚ warning its operations could be severely hampered.

With the average waiting period between applications and payment of final tranches at between nine and 12 months‚ the LRC warned that the new 12-month waiting period could extend that to 24 months. "This will have a debilitating effect on our clients … Many non-profit organisations will have to suspend their operations or close altogether‚" the LRC said in the letter to the department.

The NAF "may have to be cancelled or drastically curtailed", it said.

The NAF was unable to get lottery funding for this year’s festival‚ which runs from June 29 to July 9‚ having received its final funding tranche in October last year. NAF CEO Tony Lankester said the shortfall for 2017 had been made up by the provincial government.

"Economic impact studies indicate that the festival contributes R377m to the GDP of the province and R94m to the GDP of Grahamstown," he said. "With that in mind‚ we were able to make a case to the Eastern Cape provincial government‚ which agreed to assist so that the festival can go ahead as planned in 2017."

But the LRC said there was no guarantee for next year‚ even with lottery funding. "The NAF can only apply for funding again in October 2017 and if it takes nine months to approve the application and pay the funds to the NAF‚ it is likely that the 2018 festival will … be severely underfunded."

The LRC said other clients affected were the Raphael Centre‚ which assists people with HIV/AIDS‚ and Joza‚ which provides disadvantaged high school pupils with free tuition.

The LRC believes Regulation 14 was a response to stop organisations from making several applications for small grants‚ which carry less stringent financial reporting requirements. It recommended other ways of wording the regulation that will not eliminate the possibility of annual payments for beneficiaries.

The LRC’s Cameron McConnachie said it is still awaiting a response from the Department of Trade and Industry to its letter‚ sent more than six months ago.

Questions sent by The Times to the department were forwarded to the National Lotteries Commission (NLC)‚ which confirmed Regulation 14 has been widely flagged and was being looked at‚ among other regulations.

"There are suggestions on the table [on this and other issues] and they will be taken through proper processes through the department for consideration‚" the NLC said. "It is true in the NLC’s interaction with its beneficiaries‚ issues are raised around the clause and many other clauses‚ hence the response by the commission of drafting a broad discussion paper on this matter, and others, as possible matters needing further clarity‚ re-wording and/or amendments."

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