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Blue Sky, Dragon, Rano and Milestone 2025

Tue, 04 Nov 2025 04:19:30 GMT

I am getting pretty slack on this grant work these days. Mainly due the challenge of having a real job, and the unending relentlessness of the stuff that goes on in this space. But below is a rinse and repeat of my last look at Blue Sky, Dragon, Milestone and Rano. I reckon these are worth keeping a beady eye on given some of the things we have discovered before about charities well supported by these pokies.
https://www.stuff.co.nz/nz-news/360547576/charity-struck-significant-failings-after-stuff-investigation
https://www.stuff.co.nz/national/crime/130928581/the-1-million-library-that-never-really-opened-appears-to-close-for-good

I looked at these four gaming trusts in August 2022 and raised a complaint specifically about Dragon. This complaint widened to include these four. I believe its STILL ongoing based on DIA’s response in the above articles. So while those tasked with regulation go about their jobs, the pokies and community groups they fund continue to go about theirs.

Looking at their Grant distributions over the years we can see growth has plateaued and indeed fell by around 8% ($2m) in the last financial year. This is despite an increase in the number of venues under management: in 2017 they had 17 venues and 269 machines: by 30 June 2025 they had 38 venues and 587 machines. The four also have a skew for Auckland / Waikato region. If we look at the calendar year 2024 (as that’s how I manage the venue data) they lost four venues and gained four venues.

I have developed a wee proposal which has died somewhere in the bureaucratic void (shout out if you want it), but I think would help those charged with managing our grant making systems a little more proactive. The objectives behind the proposal are:

Better understand the linkages between venues, Class 4 organisations and charities
Proactively manage any potential issues by actively monitoring the data of the Class 4 organisations, launching investigations when there is evidence to suggest issues
Be comfortable that the ecosystem is channeling grant monies to “good” organisations, minimizing that to bad, and eliminating grant monies going to ugly.

Over my decade or so of looking at this stuff I've come up with a few things from publicly available data that make me go hmmm. On the grantee front, I'd flag:

organisations with three or fewer trustees
organisations getting more than 2 grants per annum from a grant maker
organisations registered within the past months
organisations with a deficit in documentation including annual accounts
NGOs with a name change
NGOs with a registered address of a private dwelling and a charge of rent expense in their accounts
NGOs with a registered address of a Class 4 venue and rent expenses (yes, I've found several)
NGOs with address of other flagged NGOs
NGO has a principal associated with another red flagged organisation
NGO has a principal associated with a venue or a pokie
NGO has income from any one pokie of more than 50% of income

Now, not all of these means bad stuff is happening. However, if there are a couple of these flags triggered, then I reckon the organisation deserves a good look.

I thought you might be interested in the top twenty community organisations that have been granted funding in the last financial year, along with the number of grants, and the date they were registered as an entity. The reason I monitor the number of grants is because I'm quite surprised at the volumes that do go through to many charities. If you have written a grant application you will know that the process, paperwork and bookkeeping can drive a girl to drink. This is why I can't help but be a wee bit suspicious of organisations that get multiple grants per month from a single funder.

You can see 20 organisations are getting 39.6% of the total grants from these pokies. Some of last year's favourites no longer make the cut: both Lucky Clover and Woman Care have basically halved in amount of grants given, down from $545k and $319k respectively.

Charity Name	Total Grant Dollars Given	Number of Grants	Registration Date
Heritage Foundation	$233,455	20	17-10-22
Wushu Development of New Zealand Trust Board	$233,457	18	25-08-24
Wish Foundation	$236,075	19	24-07-24
Kotahitanga Charitable Trust	$248,900	25	09-10-13
New Life Charitable Trust	$251,467	32	06-08-18
New Zealand Shadow Puppet Art Troupe Inc	$251,787	11	13-11-19
Caring Hearts Foundation Inc	$271,649	14	10-07-23
Asian Help and Education Charitable Trust	$283,805	25	08-06-17
New Zealand Sikh Community Tauranga Trust	$306,382	6	19-07-12
Univision Community Trust	$320,411	14	19-01-15
Middlemore Foundation for Health Innovation (The)	$325,111	3	16-10-07
Next Era Sports (was New Zealand Child and Youth Education Trust)	$387,662	12	19-11-18
New Zealand Multiculture and Arts Exchange Centre (was New Zealand Chinese and Arts Exchange Centre)	$419,472	20	07-09-17
Supreme Sikh Society of New Zealand	$419,513	21	30-06-08
Happy Valley Women and Children's Foundation	$447,246	25	20-10-22
Asian Community Engagement Trust (was Natural Environment Defence Foundation)	$475,510	26	08-07-20
Indian Association (Manakau) New Zealand Inc	$489,000	3	15-12-81
New Zealand Sports and Community Development Trust	$559,498	31	20-09-23
Inspired Families Foundational Trust	$660,679	39	13-04-18
New Zealand Culture & Media Group Ltd	$2,074,570	62	27-04-21

We can look at groups in the Top 50 funded that have been registered in 2024. There are four groups which make my list:

Greater Bay Sports Association Inc (Incorporated Society, 3 officers, $171k in 29 grants, registered 14 March 2024)
Wushu Development of New Zealand Trust (5 Trustees, $233k in 18 grants, registered 25/7/2024)
Wish Foundation (2 Trustees. $236k in 19 grants, noted on NZBN as registered 24/7/2024 but not registered on the Charities Services register)
New Zealand Education and Creation Center (2 Trustees, received $166k in 12 grants, registered 20/6/2024)

Now, I'm not saying that anything is off here: it could be that these four pokies are helping organisations to start up, but if I were in charge I would have hard look at this. What set these organisations apart of the multitude of others to get such support in start up phase?

I also note that New Zealand Sports and Community Development Trust are pulling in the grants. The investigation into their money must have found no issues.

If anyone is interested in having a look at the database I’ve pulled together please let me know. Its all publicly available data, but just assembled in a manner that makes it easier to interrogate.

I write about this stuff as I believe that we need to understand where funding comes from, where it goes, and how it gets there. These groups gave $22.4m into our communities last financial year via 2512 grants. In the greater scheme of things its rounding, but for many organisations surviving and doing great mahi it’s a lot of money. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Submission into the Online Casino Gambling Bill

Thu, 14 Aug 2025 03:09:57 GMT

I did a submission to the Minister on the proposed Online Casino Gambling Bill. Reproduced below, mainly for posterity as there seems little appetite for any of these discussions.

For decades New Zealand has had a system of linking gambling to community funding: think Lotto and Class 4 pokies as an example. These funding streams blossomed in the late part of last century, along with other funding streams such as community and energy trusts. This grant money has now created an ecosystem where people and organisations now rely on significant grant funding for operational and capital purposes, and New Zealand has twice as many charities per capita than say Australia. This supports communities – and families working for those organisations getting that grant money.

I had looked into this: above is a chart looking at Canterbury’s grant making ecosystem. While old data, there have been no significant changes in grant makers in the past decade. We can see that pokie make up around 50% of the grants going into Canterbury. If we include Lotto then around 2/3 of grant funding comes from gambling. There is no reason to think that Canterbury is not similar to the rest of the nation in terms of their grant profile.

This data of course ignores Government contracts and private / corporate giving, focusing on organisations who make grants into entities.

Pokies have some big advantages.

Quick decision making
Broad range of organisations funded
Simple application procedures
High trust model

There are of course some issues with this grantmaking model:

Organisation overreliance on pokie funding
Misuse of funds
Some poor allocation of grant money – there are numerous articles on this
Poor oversight of the ecosystem

However, the majority of the funds end up doing some good in the communities they support. NZCT has a very good schematic on the split of pokie funding. This split shows the share that goes to community funding groups (3.2 cents in the dollar), the Government (2.9 cents in the dollar) and 1.5 cents in the dollar to the operator and to the venue, along with 90.9 cents paid back to the gambler. Casinos do not have the same community funding burden on their business model.

My concern over the proposed changes is on the impact to the funding ecosystem. Pokies make up a significant portion of grant funding. That money is used to support all manner or organisations: sports clubs, health charities, schools, community groups and arts organisations, and used to pay for community assets, events and support thousands of salaries in New Zealand.

If funding were to be part of the online casino industry, proceeds from that funding could easily be leveraged into an existing grantmaking body without a need for replication: perhaps local bodies, the existing Lotto decision makers, or perhaps an existing pokie who has vetted good practice. The advantage of the latter is that they are already a low cost operator, likely lower cost than the other options which means more money ends up with communities.

I do believe that the grant making sector needs thought at a high level. To make this structural change to our essential pokie funding without considering the long term effects of this on the recipients is short sighted and will only result in even more demands on the public purse for support. We do have too much reliance on gambling. We do have too many charities replicating services and chewing up cash. We do have paid staff where before communities and volunteers stepped up. We do have messy funding boundaries between state and philanthropy. We do have too much power for our community resources with highly paid staff in grant making organisations who are often driven by populist agendas. We do have high cost systems. Some of my earlier work suggests that the cost of this process to NZ Inc is around $260m per annum, and that a grant costs around $4k to get into the community.

There are few people thinking about this: grant makers tend to put themselves at the centre of the solution, and grant seeking organisations tend to be organized based on sector rather than as resource seeking entities. Change tends to be incremental to the system rather than system redefining. I wrote this a while back but still see no reason why New Zealand couldn’t rethink the model. But this rethink requires policy which cuts across multiple portfolios, vision and strategy at the system level rather than a death by a thousand cuts approach which is what is happening at present.

I also think that NZ based entities are likely to be more responsive: we can see with many offshore companies there is a complete lack of response in relation to complaints and customer issues. International entities have a poor track record of being good citizens to our small nation, an issue I am sure Problem Gambling will highlight as a real concern.

Online gambling is in New Zealand already and its great that the Government is looking to bring some order to the sector. However, I think its remiss for community funding to be excluded from the model given the likely impact of online gambling on pokies. A better solution would be leveraging local providers and adding a community funding element which is commensurate with the amount Class 4 are required to provide while taking some time to critically review the grant making ecosystem and adjusting once a strategy is in place. An even playing field seems fair and the right thing to do for both New Zealand businesses and New Zealand communities.

$366,321,199 of Community Grants

Sat, 12 Jul 2025 05:02:57 GMT

DIA have announced that they have published the 2024 Class 4 grants data. This covers all the grants made in the 2024 calendar year by pokies. You will no doubt have had a good look at what the data is telling you.

But if not, then lets have a look now. All this information can be found at Granted.govt.nz.
Below is a shot of the dashboard on the first page.

We have almost 9k organisations receiving these grants, with each organisation receiving an average of almost 3 grants per year from 33 separate grantmakers. This does seem quite low to me: you will recall from some previous work that some organisations are getting over sixty grants from a single grantmaker in one year.

I was also pleasantly surprised to see Netball feature so highly. This year that code got $9.6m: of course that’s amateur hour compared to rugby’s $27m.

So who received all this lovely money? Below is a table looking at the organisations that received over $1m in the 2024 calendar year, along with the percentage of the total pokie money they received from the top giving grantmaker. Some you will know, some you’ll have to google, and some I have complained about several years ago. So clearly nothing to see here.

I could look back in time to see how grants to those entities changed over the years: only thing is there is a wee health check on this. The 2024 data looks quite clean (bouquet) however the historical data isn’t (brickbat) so without doing that exercise its tricky to compare. For example, in 2023 Youthtown is spelt three different ways in the DIA system: those three total $5.3m.

You may be surprised that there are 33 grantmakers in this sector. Below is a wee chart looking at who they are, how much they have given away in the calendar years, and how many machines they have as at 31 December. The Yellow is tagged as I find it odd that One Foundation has increased their grants by about $20m in one year with fewer machines (I do have a query in with DIA as of the end of June 2025 but not sure if they will get back to me). The red are the pokies that no longer exist, and green is a new entity.

If you are interested in the pokies that operate in your region, you can easily look at that through Granted. There is a tab called Pokie Grants by District where you can view who gives to what in your area.

I also have looked at productivity: the amount of grants produced per machine. Now, Problem Gambling Foundation may describe this differently, but my interest is around the grantmaking side of the business. The size of the circle relates to the amount granted (and apologies for the fuzzy words: only so much my free version of Power BI will do). You can see that One Foundation looks quite out of whack with the others: see above query. The most productive machines are managed by Blue Sky with each machine producing some $43,307 of grants, followed by ILT ($42,003) then closely followed by Rano ($41,851). ILT is an outlier: of course this is the Invercargill Licensing Trust. I suspect it has been able to manage its footprint within the area so historically not subject to the same competitive pressures. I confess ignorance as to the venue business model for pokies, but, given Blue Sky and Rano have been the subject of a few of my sector queries, I’d have a good look at why those specific venues have gone into business with these specific pokies. There are instances where venues do ask for a kick back from a charity receiving funding (illegal) or where a charity makes a rent payment to a venue. Sounds dodgy but can't be as there has been no action taken against those who have done it.

I write about this stuff as believe that as need to understand where funding comes from, where it goes, and how it gets there. Pokies are low cost operators in terms of cost to serve, and are responsible for granting large sums of money to community groups. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Dive into Trillian Trust’s Grantmaking

Tue, 25 Mar 2025 03:07:57 GMT

I’m taking requests, and, not naming names, I’ve been gently nudged into looking at Trillian Trust. I was somewhat surprised to find on my computer a file, spreadsheets and a few years analysed. Then I remembered I had started to look at them, but felt there wasn’t enough data to be interesting. They restructured into a different entity in 2020 and took their previous grants off their website. Now we have four years of complete data. I’ve downloaded their newer data off their website, cleaned it up and classified it by sector / subsector and region.

So who is Trillian Trust? At the top there are five men making the grant decisions. Below copied from their authorised purpose: my highlights added.

Promotion of any amateur sport where that sport is conducted for the recreation of the general public. This includes, but is not limited to, the provision of ground fees, equipment and uniforms for amateur sporting clubs and teams. No donations and/or payments to professional sports people.
Donations for cultural educational purposes that are of a non-commercial nature.
Donations for educational advancement through grants to schools or other educational institutes for equipment or the development of better student amenities not covered by government funding, including playground equipment etc.
Donations to recognised charitable organisations to further the objects of those groups.
Promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes, and the provision and maintenance of public amenities primarily used for race meetings.

Interesting what is missing: that’s a reference to returning grant monies to the areas they were generated from. This is somewhat addressed in the FAQ (copied):

Trillian Trust endeavour to return as much funds as possible into the area in which those funds were raised, however, funding is also provided to organisations that operate nationally.

As at the end of December 2024 Trillian Trust were managing 22 venues: 14 in Auckland, two venues in Thames Coromandel and one venue in Carterton, the Far North, Hamilton, Manawatu, Napier and Christchurch. This is up two venues from 2020.

Last financial year (31 July 2024) they gave away around $14 million, down a wee bit ($700k) from 2023, but up from (Covid affected) 2021 when the number was a little shy of $9m.

Where does the money go to? 62% of Trillian’s funding goes to Sport. Almost 8% goes to education: although of course a fair bit of this education support will go to sport, but, unless there is an underlying club for the school’s sport team, its impossible to classify into the correct bucket.

Sport breakdown? Wow these guys love football! I guess this isn’t news.

Value	2021	2022	2023	2024	TOTAL
Football	2,165,059	1,867,981	2,772,183	2,294,155	9,099,377
Rugby Union	412,819	1,108,957	756,168	787,961	3,065,904
Rugby League	656,305	533,672	493,234	210,008	1,893,219
Basketball	350,140	400,239	468,421	386,252	1,605,053
Cricket	232,942	129,182	758,591	389,111	1,509,836
Hockey	300,006	267,708	441,526	423,245	1,432,485
Boating	125,935	156,244	281,894	619,422	1,183,495
Venue	221,999	314,024	298,154	339,761	1,173,938
Horse Racing	40,000	244,650	445,238	314,000	1,043,888
Other Sport	1,081,788	1,296,836	2,428,238	2,840,633	7,647,494
Total Sport	5,586,993	6,319,491	9,143,647	8,604,548	29,654,680

We have some history with a Martin van Beynen piece on Stuff in 2022. Martin did a great job of pulling some of the strands together with relationships of top football club Auckland City FC, Central United and Trillian Trust. So which are the football clubs getting Trillian’s support? 44% of that footie money has gone to clubs associated with Auckland City Football Club. (Note Super City Youth is a now dissolved entity – see this article for more).

Auckland City FC’s income looks largely the same as when Martin van Beynen looked at it. You can check out their accounts on Societies, but that will show you they have an income of just over $1.1m. Granted.govt.nz tells me that Trillian are pretty much the only funder of this club. And their own website tells me they have a whole 12 teams and membership of 400. So looking at this: In 2024 Trillian subsided each team to the tune of $52k. Each member to the tune of $1,576. They have wages of $852k. Heck – when my husband was running a footie club we had about the same number of teams and members – all funded on subs (curiously a line item not on Auckland City FC’s accounts!) and a bit of support from a generous sponsor. Nary a salary in sight.

I’m not going to repeat the analysis here, but I did benchmark a year or two ago. The club in the Mainland Football catchment with the most pokie subsidy was Nelson Suburbs at a $5,078 subsidy per team over 47 teams. I reckon the lead in the van Beynen article still stands: Auckland City FC is New Zealand's top amateur club. Yet it can't shake the rumours that it's in fact a club of professionals masquerading as amateurs. I also think NZ Football needs to figure out a better operating model for its top clubs.

Anyhoo – back to Trillian Trust. The clean was pretty simple as there were many rows of the same entity. Below I have looked at the top ten organisations by number of grants. Trillian have no limits on the number of times you can apply.

So Blue Light Ventures fill in 25 applications per annum. Tino Rawa restore wooden boats: quite lovely but Trillian is THE ONLY funder of this entity. This is feasible, but this pokie doesn't disclose conflicts so its a challenge to understand the why of these grant patterns.

I spent too much of my summer preparing a database for a wee database I was hoping the DIA would pick up to give them some better information to proactively manage risks. They don’t know who actually owns the venues which house the pokies. So I plodded through the 1,100 or so venues, figured out who owns them through a search of MoJ's (incomplete) database of liquor licenses, or MPI’s (much better) database of food licenses. I then searched up every commercial entity to see who were the directors / shareholders of said entities within the past decade or so. I captured that in a spreadsheet, and try to keep it up to date as I have all the commercial entities on a Companies Office watch list. Really need better hobbies.

I then intend to search all the humans on the list to see their interests. Under the legislation, venues cannot have a say in where funding goes. But, despite several complaints, I haven’t seen a behaviour change in the way grant money is allocated, so assume that its all good.

I spent about an hour or so looking for some linkages here. Here’s one. A chap who is an owner / shareholder of a Trillian Trust pub. Very strong ties to Auckland City FC AND Central United FC, who together in the last 4 years got almost $3.6m from Trillian. Oh – and he was a former director / shareholder of the now defunct Super City Football Academy – an entity that, according to Granted.govt.nz received $792k solely from Trillian in the years 2019 – 2022. To be clear, I’m not saying there is a situation where the venue is influencing where the grants go. But its probably worth a look.

The other thing I noticed about Trillian was some money ending up down south. You probably noticed that Horse Racing appears on the “most funded sport” list. Below is a pie chart looking at the locations for that funding. Trillian only has one South Island venue, in Christchurch. They did have one in Tasman in 2021, but that’s nowhere near Winton. There is nothing in their Authorised Purposes to say that they give back to where the funds are generated, but I can’t understand why they felt the needs of nine Southland harness racing clubs which do not operate nationally (and why they bothered to apply) outweighed the needs of organisations operating in the area their venues are situated.

If we look at all their grants, Auckland does get the lions share of their available funding: around 83% of total Trillian Trust funding goes to Auckland entities.

I write about this stuff as believe that as need to understand where funding comes from, where it goes, and how it gets there. No one else seems all that interested. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Rātā Update 2024

Thu, 06 Mar 2025 21:11:49 GMT

Looks like I now take requests. My one regular reader asked me to have a gander again at Rātā Foundation, which is Canterbury, Marlborough, Nelson and Chatham’s Community Trust. This Trust was set up by Central Government almost forty years ago when the regional Trust Banks were sold to Westpac. The money was then put in a perpetual trust. Government then appoints trustees to oversee both the investment, and the distribution of monies.

I wrote about Rātā last in 2021. My moans then still apply: copied below.

First things first: I’m moaning about the data. I use publicly available information, and over the years its got worse in terms of disclosure. Two years ago multi year grants were identified and the time span given. Now, not so much. This year I am throwing in the towel over allocating multi year funding over several years as I’m having to make far too many assumptions. What this will do is mess up the view of sector allocations on an annual basis. So the chart below shows the multi year allocations 2018 and 2019, but sadly not 2020. I’m not sure that this will affect the story at a high level, but will mess up if I start drilling down too much.

I’ve also given up on trying to figure out if spend is for operational purposes or capital. This information used to be published, now its not. It’s a shame, as is helpful for understanding funding of community assets. Grant decisions used to be published within weeks after the decision was made: now we have to wait for the annual report, in some cases up to 17 months, to see how the community funding decisions are made. Another useful piece that gaming trusts publish but these guys don’t is declined applications. That helps to give a view of where the organisation is making resource trade-offs and in my nerdy opinion can be pretty interesting.

So, nerd that I am, I downloaded the grants, cleaned and classified the data. Only took a week. Below is the last eleven years of Rātā grants (backing out the $25m Special Earthquake fund). What is rather interesting here is the drop in sport and the rise in community and economic development, which is 2020 made up around 38% of grants made. Over the last seven years the average was 29%. Sporting clubs are not the flavour of the month at the moment: in 2024 Sport made up 8% of all grants, in 2014 that figure was 18%. I have no issues with this. Sport has plenty of places to go to for grants: many pokies are set up specifically for sport grant making.

Looking at a single year’s grant making is a little tricky with Rātā : as mentioned they do a bit of multi year funding (which is great: should reduce cost to serve for those getting the grants) but don’t disclose – at least that I could find – who receives it and how much (not so good). As a result, I will look at the last three year in the below work.

The biggest beneficiary of Rātā funding is the organisers: Sport Canterbury, Sport Nelson. We have a few venues with support, and then the usual suspects: rugby, cricket, basketball, boating, netball and football. But a big surprise to me is the support of boxing: in the last three years Rātā has given $365k to various boxing entities. They have given a tidy $395k over the past five years to the Canterbury Brain Collective so I guess the consequences of the boxing funding is taken care of.

The top ten funded organisations in 2024 are below: as previously stated some of this will be operational funding in a multi year, and some capex.

Charity	2024 Grant
Hokotehi Moriori Trust	$500,000
Tasman Environmental Trust	$450,000
Terra Nova Foundation	$385,700
Ngati Mutunga o Wharekauri Iwi Trust	$379,741
CORE Education	$337,562
Stopping Violence Services (Christchurch) Inc	$335,000
Community Law Canterbury/Te Ture Whanui O Waitaha Inc	$315,000
Nga Hau E Wha National Marae Charitable Trust	$300,000
St Lukes Samoan Assembly of God	$300,000
Te Ora Hou Otautahi Inc	$300,000
Grand Total	$3,603,003

Sport isn’t where its at for Rātā however. You may be scratching your head over the Community and Economic Development flag. Yes it’s a catch all, and yes it will include multi year funding or capital. I can’t tell the difference from the published documents. Below shows the top 10 organisations who have received funding in the past three years from Rātā :

Yep some big licks: housing sucks a fair bit up. So its not just me as a taxpayer, or me as a ratepayer helping out with social housing: its also me as a Canterbury citizen.

Last time too we had a skew towards the Nelson Marlborough area. Top of the South has about 23% of the population Ignoring multi-region (another reporting change) the amount staying in Canterbury over the last three years fluctuated between 69% and 76%. To be fair the Chathams, which of course has a very small population, did pick up a large slice of funding in the 2024 year: you can see that in the $500k to the Hokotehi Moriori Trust.

Because I have the data I thought it might be fun to look at Rātā ’s numbers of grants over the past 11 years. I did notice when I was cleaning that there was a large number of new organisations getting support. And while there is nothing wrong with this, I suspect that (again) we have a bunch of duplication going on with well meaning people starting their own thing rather than work with an existing entity.

In the 11 years I have data, Rātā has funded some 2633 entities, in 9721 grants. 35% of all entities getting funding only did once. The number of grants has more halved from 1240 in 2014 to 568 in 2024 while the amount given has increased by a total of around $2m. So we have fewer entities getting more money.

Let me know if there are any other grant insights you’d like. I'm keen to explore cost to serve so have had a look at a history of operating financials. This analysis EXCLUDES fund management costs, and takes the total admin cost and divides by the dollar value of grants given. In 2017, the costs per grant made were 16.16 cents. This means that for every dollar given, it cost 16.16 cents to get that dollar into the community. In 2025, that cost has gone to 21 cents – up about 25%. Looking at it another way, if we divide total admin costs by the NUMBER of grants then in 2017 the cost per grant was $3,247. In 2024 it is $7,882. This is less concerning (I think) given they now give MORE to FEWER organisations AND have introduced a multi-region tag which means where three grants were published before there is now just one.

My interest was piqued by a Matt Nippert piece in the Herald looking at New Zealand’s highest paid charity executives. We had a couple of grant makers in this list: not Rātā. My maths puts that the average salary of the top 4.2 staff at Rātā (as per their accounts) was $192k. That does seem like a wodge of cash, especially when they paid their fund managers $4.7m to manage the $675m under management. And if we look back to 2017 the average was $134k. So that's a 43% increase in top salaries since 2017. For reference, according to my scratchings from Stats NZ data, private sector salaries rose by almost 20% over this period. According to Google's AI the average CEO salary of a NZ NFP is $123k.

Below is a wee benchmarking exercise looking at entities which give away money, how much it costs to get a dollar out the door, total funds under management and top staff costs. I tried to take only the costs of grants, excluding investment costs and running costs in the case of the pokie. I looked at the two grant makers identified in the Nippert article, and a couple of other grant makers. The first three entities all have the same model: they are legacy Community Trusts. Central Lakes Trust manages some pretty sizeable energy assets (and I couldn’t unpick those costs from the Trust costs so their cost to serve is inflated), Tindall Foundation is a family trust with a fair whack of cash in Warehouse shares, and Pub Charity is a pokie whose costs of course are controlled by legislation. Its also just from the grant maker angle: those seeking grants have costs too which will increase the cost to serve.

Missing quite deliberately is Christchurch Foundation. They had a lot of coverage down here a while back for some big salaries, and to be honest they don’t really give away that much. Their salaries have been brought back a lot since then, but still: the job of the CHC foundation, I would argue, is a lot harder than a perpetual trust like Rātā . As anyone in the philanthropic game will tell you, it’s a lot easier giving the money away than getting it in in the first place. Also missing is any local or central government benchmarking: those figures are well buried. What’s Lotto’s cost to get a buck out the door? Christchurch City Council’s? I’d hazard its probably a bit higher than this. And I have seen some very high cost to serve in some smaller lawyer run funders: sometimes the management cost is more than what they give away. I admit to being a little surprised at the similarity of cost to serve and top staff costs across the Community Foundations. I suspect they likely all use the same reports around remuneration: although that’s likely not the NGO category that is benchmarked. If Rātā could do the job for Pub Charity's cost to serve, then as a community we'd be almost $2m better off. Is the extra cost worth the result? I don't know. Thoughts?

I write about this stuff as I believe that we need to understand where funding comes from, where it goes, and how it gets there. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Shout out for any requests, and check out my website http://www.delfi.co.nz/

BlueSky, Dragon, Milestone and Rano 2024 Update

Mon, 04 Nov 2024 22:43:50 GMT

Of course you will remember Stuff's story on NZ Edutech Trust. But just in case you don’t here is the start of the article:

Two government departments are investigating the mysterious NZ Edutech Trust charity, which took $500,000 in public funds without any clear evidence of what it’s been spent on - and a chairman who was already under scrutiny by Internal Affairs.

BlueSky had given NZ Edutech the above funding in two years. BlueSky, Dragon, Milestone and Rano have the same underlying management company, Dawn Management, so I tend to review them together. You can see this with some grants: for example, Woolston Brass is clearly a Canterbury based organisation and usually get a couple of grand, mostly from BlueSky. Yet BlueSky don't have a Christchurch venue whereas Rano has one.   These four pokies have now all published their 2024 grants (BlueSky and Rano 31 July, Dragon 31 March and Milestone 30 June), so I reckon it's time for review.

I looked at these guys last year: you can read this here. What I found was that the top 30 of their supported charities get 78% of available grant money. For reference, Pub Charity's grants to their top 30 is around 21%.    I looked at these four gaming trusts in August 2022 and raised a complaint specifically about Dragon. This complaint widened to include these four. I believe it's STILL ongoing based on DIA's response in the Edutech article. So while those tasked with regulation go about their jobs, the pokies and community groups they fund continue to go about theirs.

Looking at their grant distributions over the years we can see some growth in grants given although that is plateauing. This is due to an increase in the number of venues under management: in 2017 they had 17 venues and 269 machines: by 30 June 2024 they had 36 venues and 586 machines.   Rano didn’t start until 2018. The four also have a skew for Auckland / Waikato region, who of course were most affected by COVID in 2022.

This chart looks at how much these entities have distributed since 2017. This last financial year as a group these entities have given away $24.3m: much of the growth in the past three years is primarily COVID related as the venue numbers have not changed a lot since the end of 2020 when they had 37 venues between them.

I thought you might be interested in the top ten community organisations that have been granted funding by these four trusts in the last financial year, along with the number of grants, and the date they were registered as an entity. You can see these ten organisations are getting 28% of the total grants from the four pokies.

Do they all do what they say they do? I assume so given no action has been taken in the two years since first reported. Although I raise an eyebrow with a few: one only has a single Trustee, one was the subject of this Stuff story, and two have the same trustee. Only three have more than three trustees on their community organisation.

New Zealand Culture & Media Group Ltd is very interesting. It's a charitable company that was registered on 27 April 2021 and operates the Chinese TV station Channel 33. Their charitable purposes aren't dissimilar from the goals of TVNZ:

To operate a non-commercial TV channel, community radio station and/or other community media for charitable purposes; and
Any other charitable purpose.

Looking at Granted.Govt.nz tells me NZCMG is the tenth most pokie funded in the country. And if we look at their latest 2024 accounts:

91% of their total funding comes from grants with the balance from advertising and Youtube revenues
Salaries are $777k
The two officers of the charity are listed in the accounts as on the payroll both as employees and directors

The charity started as a company by the chap behind the management company of these pokies, and who has been investigated by DIA.

I really don't know if pokies are the answer to the issues with media funding at the moment. Nor do I know how this station compares to the several other Chinese TV stations in NZ. But the sheer amount of dollars going to this relatively new organisation makes it worth having a good look.

I've really went down a rabbit hole I've been avoiding for a few years now and looked at the top 50 funded organisations of these four pokies from over the past six years. We have 114 groups in that bucket which suggests there is a bit of funding chopping and changing over the six years. Groups I’d have a good gander at:

At least two who have the same registered address as a pokie pub. We have seen this before with a charity which had received $1.3m since inception now moved off to Queenstown and I suspect not receiving any support since 2022.
A number have been registered by the same person. Reckon those a worth a look.
A few have some interesting documentation. I'd poke around that.
There are a number with large rent payments. I’m not convinced of the rights and wrongs of a grant for my private dwelling when I’m operating a charity. Should I apply for rent for my PTA work?
A few were set up, got a lot of money and then deregistered. Was the charitable purpose achieved? Or was something else going on.

Another way to cut the data is to look at groups in the 2024 Top 50 funded that were registered in 2023. There are six groups which make my list:

Auckland Community Education Centre (2 Trustees, $142k in 6 grants in 2024, registered 9/6/2023)
Caring Hearts Foundation Inc (Incorporated Society, $179k in 13 grants, registered 10/7/2023)
New Zealand Sports and Community Development Trust (3 Trustees. $641k in 31 grants, registered 20/9/2023)
Sustainable Horticulture Society Inc (Incorporated Society, received $106k in 4 grants in 2023, none this year, registered 2/3/2023)
Tamariki First Charitable Trust (3 Trustees, received $146k in 14 grants, registered 30/6/2023)
Te Karere Community Trust (2 Trustees, received $100k 2023 in 4 grants and $106k 2024 in 10 grants, registered 2/5/2023)

Now, I'm not saying that anything is off here: it could be that these four pokies are helping organisations to start up, but if I were in charge I would have a hard look at this. What set these organisations apart from the multitude of others to get such support in start up phase?

If anyone is interested in having a look at the database I’ve pulled together please let me know. Its all publicly available data, but just assembled in a manner that makes it easier to interrogate.

I write about this stuff as I believe that we need to understand where funding comes from, where it goes, and how it gets there. These four pokies gave $24.3m into our communities last financial year. In the greater scheme of things it's rounding, but for many organisations surviving and doing great mahi it's a lot of money.

As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Air Rescue 2024 Update

Fri, 18 Oct 2024 03:28:02 GMT

We have seen the media get into some of this grant space, and thank goodness. See the media page for some around this. Some of this reportage reminded me to revisit an old favourite, Air Rescue Services Ltd. A reminder about their Special Purpose (copied from their website):

The Directors resolved to continue to apply the current criteria, methods, systems and policies for net proceeds distribution, to effectively maximise returns to the rescue helicopter service through Canterbury West Coast Air Rescue Trust, and to ensure the even distribution of funding for other charitable or community organisations within the company's operating areas.

There is no comment made about the number of grants that can be made to any specific organisation per annum.

What I have done is pull their grants data that ARS has made to the end of their financial year June 2024, and added this to my previous work, cleaned it up and categorised it. Below is a chart looking at where their money has gone over time. No surprises: money mostly going to their Air Rescue Services and a large amount to sport. What is interesting however is the growth in grants over the last decade. This is due to growth in venue management: while I don't have the numbers from the early days, in 2015 they had 420 machines under management: at the end of 2023 that had grown to 530 machines in 33 venues. What I have also started to do is to look at who owns the venues (DIA does not do this - I have asked). This can be quite telling if you want to understand why certain sorts of activities get favoured: although as previously stated venues really are not allowed to influence grant decisions.

This chart shows a few things:

Air Rescue's grants have grown a fair bit. This is driven by largely static grants into Canterbury West Coast Air Rescue Trust, and by significant growth into NZ Flying Doctors Services. Both of these charities are fundraisers for a private business which runs these services operationally, so we have no insight into operational efficiencies.
Nelson Marlborough's Rescue Helicopter is a recipient. They actually own helicopters so good to see they are supported here.
What is also interesting is the growth in non Sports over the past two years. The chart doesn't look so dull. In 2024 83% of available grants went to Sport or Air Rescue: in 2014 it was 93%.
The COVID effect is over.

There have been some concerns over pokies failing to return community money to the communities that the money comes from. The Hauraki District Council has identified its missing around $1m of the $2.4m potential grants in the area. Similarly I looked at Rotorua and identified a missing $4m. The chart below looks at 2023 grants by region. The grant numbers are for the year end March 24, which the number of machines is based on some DIA data on 31 December 2023. We also need to be careful with the analysis: some venues will be more productive than others. Blue is where the grants are higher than expected, red lower, and green bang on.

	2024 Grant dollars	Number of Machines	% 2024 Grant dollars	% Number of Machines
Auckland	$2,031,718	63	11%	12%
Canterbury	$9,740,558	216	54%	41%
Hawkes Bay	$399,133	36	2%	7%
Horowhenua	$19,791	18	0%	3%
Manawatu	$29,937	18	0%	3%
Marlborough	$414,305	18	2%	3%
Nelson	$837,450	32	5%	6%
Rotorua / BOP	$92,695	18	1%	3%
Ashburton	$159,048	7	1%	1%
Wellington	$3,483,083	72	19%	14%
West Coast	$593,701	18	3%	3%
New Plymouth	$0	14	0%	3%
Other inc National	$228,106	0	1.3%	0%
TOTAL	$18,029,526	530

I have put the CWCART money against Canterbury. Given this pokie is set up for CWCART, then I'd expect to see that skew to Canterbury. What is striking: Manawatu, Horowhenua, Hawkes Bay, Rotorua and New Plymouth seem to be not getting their fair share. Wellington is certainly overegging it BUT of course it could be that Wellington's venues are really productive. And I could well have mislabeled the grants.

I proposed a different model last month, but had a less disruptive model occur to me: changing the laws around Alcohol Licensing. This could see Local Authorities taking the pokie into account on the granting of the liquor license. We have seen the case of the Edinburgh Castle site (indeed a former Air Rescue Services Trust site but currently with Blue Sky) continue to offer pokies long after its liquor license was revoked. If the Local Authority was concerned about the grants being made (or rather not being made) to their local communities, then why not link the pokie operator to the licensing programme. The programme already exists, and the data to answer questions LAs may have is readily available. An operator who provides funds to "good" local organisations could get the nod, others perhaps not.

I thought you might find the Wellington grant distribution interesting: I would expect Wellington to have a number of regional organisations who get a fair bit of grant dollars. Think a regional health charity or the like. That's what I would expect. However, below shows the top 10 recipients over the past three years, by dollar value and showing number of grants. So nothing to the Wellington rescue helicopter but a lot to the capital's football clubs.

Lets look at the top 15 on a National level.

	2022	2023	2024	Grand Total
Canterbury West Coast Air Rescue Trust	$3,764,917	$3,338,673	$3,344,647	$10,448,237
New Zealand Flying Doctor Trust	$2,766,001	$3,528,397	$3,552,222	$9,846,620
Nelson Marlborough Rescue Helicopter Trust Inc	$602,311	$861,170	$216,501	$1,679,982
Nelson Suburbs Football Club Inc	$182,637	$221,528	$296,323	$700,488
Sport Education Community and Cultural Foundation	$217,774	$240,638	$236,881	$695,292
Jasmine Arts and Culture Charitable Trust	$301,702	$154,985	$207,368	$664,054
Canterbury Regional Basketball Foundation	$142,504	$214,542	$305,491	$662,538
West Coast Rugby Football Union	$313,626	$189,000	$157,615	$660,242
Dewey Centre Foundation	$75,399	$293,738	$270,857	$639,995
Miramar Rangers Association Football Club Inc	$164,947	$242,242	$208,172	$615,361
Theatre Royal Charitable Foundation	$166,313	$193,348	$201,536	$561,198
Cashmere Technical Football Club	$111,254	$200,569	$239,032	$550,855
Fencibles United AFC	$118,443	$192,100	$233,391	$543,934
Lower Hutt City AFC	$158,558	$191,039	$193,425	$543,022
Ole Academy Incorporated	$127,757	$168,730	$215,632	$512,119
Other	$5,313,979	$8,435,418	$8,150,433	$21,899,830
Grand Total	$14,528,123	$8,666,117	$18,029,526	$51,223,765

So not much change but some levels of grant making that are a little eyebrow raising. You can read some of that here, but that Nelson Suburbs Football Club has been subject to a complaint as have a few of the above. I still haven't heard anything so I guess the regulator must be all good on the potential conflict. Dewey Center Foundation too is interesting: registering as a charity in 2021 this pokie is its only funder. And Dewey is in the same address block as one of the ARS venues. I also wonder about Sport Education Community and Cultural Foundation, the fifth most funded organisation, which registered as a charity in 2019. It could be that ARS should be applauded for supporting a new organisation. But I'm inherently distrustful of most things so I'd have a good look at this. And as for football...

I write about this stuff as believe that as need to understand where funding comes from, where it goes, and how it gets there. No one else seems all that interested. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Five Years of Akarana Community Trust’s Grants

Tue, 24 Sep 2024 12:00:00 GMT

edit: see this piece for more around this.

A healthy dose of media and too much time on my hands has sparked up this interest again in grant money: where it comes from, where it goes to have how it gets there. I was having a wee surf the other day while I wait for some grant makers I am keen to look at to publish, and remembered these guys. I first stumbled across them when I was looking at Rano.

Akarana is a pretty small pokie: as at the end of 2023 they had six venues, mostly in Auckland, and at last publication accounted for nearly $4m in grants in the year to 31 March 2024. They are fairly exclusive on the grant making front, handing out grants to just over 250 organisations in those eight years at an average of around $18k - although a median of around $5k. This means they give a lot to a few, which pulls up the average.

Their venues have not changed much in the past few years, although they have lost one venue this current financial year to yet another pokie start up: New Horizon Community Trust (yes I will look at them, no they haven't made any grant publications yet). Their venues all have 18 machines: if you do the maths they generate the below grants off 108 machines. Looking at 2024 numbers, that is $36k per machine or a strong $665k per venue.

On paper they have a fairly wide remit. From their website: Akarana may make grants for:

any charitable purpose;
any non-commercial purpose that is beneficial to the whole or a section of the community; and
promoting, controlling, and conducting race meetings under the Racing Act 2003, including the payment of stakes.

Akarana Community Trust don't have any guidelines around groups applying several times in a year. What was immediately apparent is the sheer number and value of grants and going to specific groups. Below is a chart looking at the make up of the grant making portfolio. I have isolated the top 10 organisations in the last five years and am showing here the amount given in total, and the number of grants. Note the growth in total grants will be driven by the COVID effect.

	2020	2021	2022	2023	2024	Grand Total
	$	$	$	$	$	$	#
Bay of Plenty Sikh Society NZ Trust		25,000	350,398	234,032		609,430	16
Chinese Senior Citizen Help Foundation	199,975	202,885	85,220	20,574	64,469	573,124	25
Indo Kiwi United Trust	17,088	90,349	70,455	120,529	7,500	305,922	19
New Zealand Sports & Community Development Trust					312,497	312,497	4
Roopa Aur Aap Charitable Trust	165,395	134,541	96,544	200,336	164,679	761,495	38
Sikh Heritage School				60,327	196,269	256,596	8
Supreme Sikh Society of New Zealand	1,226,088	1,114,548	1,111,546	1,744,496	1,479,000	6,675,678	166
Surf Life Saving Northern Region	89,154	61,478	68,995	138,711	147,064	505,402	33
United North Piha Lifeguard Service Inc				210,000	50,000	260,000	4
Woman Care Trust	210,007	289,256	275,360	459,592	394,181	1,628,395	60
Other	854,338	435,823	318,899	808,929	1,117,803	3,535,791	418
Grand Total	2,762,046	2,353,880	2,377,418	3,997,526	3,933,462	15,424,332	791

We can see that Supreme Sikh received 43% of the available grant money from Akarana in the past five years, in 166 successful grants. I find it wild that every year Akarana makes around 3 grants per month to this organisation. Now grant making like this is not unknown: rugby unions have similar arrangements with other pokies: a practice I think is a little curious but hey seems ok by the regulator. The amount of paperwork required to fulfill the accountability requirements must be confusing.

We can also see a few regular favourites: Woman Care Trust gets a grant a month from this operator, and Roopa Aur Aap Charitable Trust gets a regular amount too. However there is a new favourite for 2024, and one, if I were the regulator, I would have a look at: New Zealand Sports & Community Development Trust. This charity was registered with the Charities Office just under a year ago, on 23 September 2023. Since then they have received $312k from Akarana in four grants, $40k from Four Winds (which I wrote about here) and $476k from Blue Sky, $26k Dragon, $30k Grassroots and $197k from Rano in a grand total of 41 grants.

You can see the Trust deed for this organisation on the Charities office. Suffice to say it is a very broad charitable purpose: from a wrestling gym, to supporting cultural festivals, to providing care and support to dementia patients. We can also see a copy of the accounts to 31 March 2024. This shows income of $634k, expenses of $300k (made up of $192k wages, $91k rent and other opex, and $57k in admin and other overheads. According to the accounts the gym officially opened April 2024. Forward commitments include rent on two buildings, at an annual cost of $222k. Now, not saying that anything is off here: it could be that Akarana and the other pokies are helping an organisation to start up, but if I were in charge I would have hard look at this. What set this organisation apart of the multitude of others to get such support in start up phase? And why a charity for a gym? How does this sit against commercial enterprises?

Another issue that Akarana should be considering is their social license to operate. Hauraki District Council has recently done a wee review of their pokie ecosystem and concluded that they are not receiving their fair proportion of gaming proceeds generated in the district, with their community groups missing out on just over $1m. Akarana operates one of the seven venues in Hauraki. According to Granted in 2023 Akarana gave just over $100k to organisations in Hauraki. If you refer back to above, I figured out that Akarana generates around $655k per venue. So the Council's concern does seem valid. Maybe Councils could consider my rejig of the industry.

I write about this stuff as believe that as need to understand where funding comes from, where it goes, and how it gets there. No one else seems all that interested. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/

Some thoughts on the pokie model

Mon, 16 Sep 2024 05:01:46 GMT

The below is a few ideas on the grant making ecosystem. Its based on some previous thinking, with a new concept thrown in to freshen it up. I have flicked it off to the Minister, so lets see if some fairly robust reform is on the agenda.

Background
In 2023 Class 4 pokies granted New Zealand NFPs around $335m. Central Government take was around an additional $300m in duties and the like.

As at December 31 2023 we have 32 Non club operators managing 828 venues. Ten years ago there look to have been 39 operators, managing 1033 venues. There have been a few changes in pokie operators, many driven by uncovered system abuse. Bluegrass Holdings Ltd is one such example but we have not seen the industry consolidation one may expect.

In 2023 there were over 35k grant applications made to around 9,700 entities by the 32 Class 4 entities.

There are concerns over how risks are managed in grant processes through less than scrupulous actors in the grant making space. Specifically:

That a venue may influence where a grant goes. To be clear this is illegal under the legislation.
That a venue may demand a kick back from NFPs.
That a NFP may pad invoices such as rent and salaries
That sport clubs skirt around the amateur rules by employing top players in token roles.
A for purpose Class 4 entity may not put the grant requests through adequate rigour

The impact to charities from these risks is profound: that money has gone from the grant ecosystem into individual pockets.
https://www.stuff.co.nz/nz-news/350354021/mysterious-charity-no-accounts-website-or-physical-presence-under-investigation
https://www.stuff.co.nz/national/crime/130928581/the-1-million-library-that-never-really-opened-appears-to-close-for-good
https://businessdesk.co.nz/article/charities/supreme-sikh-council-under-scrutiny-over-crematorium-pokie-grants

These sorts of issues create image issues for charities and gaming trusts alike. Some seem to create fake or cost heavy charities to channel funds. Others conduct questionable activity within valid organisations.

Grant Money
We can look at where Grant money ends up in one of three camps.

The Good. Grant money going to NFPs which add real value to their communities.
The Bad. Grant money going to NFPs which arguably do little with that funding. This may include Football Clubs, banned from paying their players by NZF rules, yet with roles within the club. It may also include some of the For Purpose Class 4 monies which flows through to private businesses.
The Ugly. Grant money being diverted via padded invoices, fake jobs etc.

Ideally we want to optimise the Good, minimise the Bad and eliminate the Ugly.

We also have issues around funding flowing away from where it was generated.The Hauraki District Council has identified its missing around $1m of the $2.4 potential grants in the area. Similarly I looked at Rotorua and identified a missing $4m. Of course this does not take the grants to regional or national bodies into account, but it appears some pokies are better than others at supporting local interests.

Current Ecosystem
Even without the issues around potential fraud, the current system by default drives a high cost to serve. The grant seeker applies to multiple organisations. People in those organisations read the same information and make funding allocation decisions over "their" money.

This is replicated in the many other grant seeking agencies throughout New Zealand creating a high cost process around getting grants into the community. I've estimated that it costs NZ Inc around $260m for the grant ecosystem. It should be noted that pokie grants are very good in terms of cost to serve so we don't want to mess with that. The grant cost to serve will be lower than others (Councils, Community Trusts, Lotteries etc) due to the relatively low assessment bar and the fact that cost to serve is largely managed by legislation.

Enforcement around system abuse
Enforcement seems exception based. It appears that DIA and Charities Services react to complaints rather than proactive monitoring. Cases can take a long time to investigate too: I have several outstanding complaints with the regulator, the oldest two years old, the newest August 2024. Meanwhile the behaviours of those principals seems to continue unabated. Humans will always look to exploit systems, and, when others get away with that behaviour, more will pile in.

Suggested Solution
I am making the assumption that the current government wishes the Class 4 system to continue. Given the huge reliance by the NFP sector on that source of funding it seems to fill a need, although there are some issues around its long term viability and displacement with online gambling.

Based on this assumption we can look at how to minimise the risks AND improve productivity. These risks are primarily around distribution of grant funding. I suggest that the decision making function be moved to local government, perhaps at a regional level to better facilitate infrastructure discussions.

Pokies continue to provide and manage the machines and the venue relationships.

The money available for grants is centralised to a new entity (Newco), and then divvied up based on the amounts generated via each Local Government area, LESS an allocation for national requests (perhaps based on a % of current national requests). Those national grants are made by the central body. The central body runs the administrative side of the grant making system: receiving the requests, making assessments (but not decisions), making payments and managing accountability.

Grant seekers then request once or twice a year to the central fund based on their budgeting.

The central body assesses the organisation on several parameters but is not a decision making body.It looks at each requesting organisation through the following sorts of assessment.

What does the entity do?
How are they funded?
How cost effective is each programme area?
How robust is the evidence behind the programme?
How well is each programme implemented?
How do they compare to others?
Does the charity need additional funds?

Note that not all entities would go through such evidence based assessment: in the case of sporting groups for example it could be as simple as a benchmarking exercise, number of participants and alignment with Sport NZ goals.

The output of each assessment is online and transparent: think TripAdvisor.

The money to run this is taken from the pokies who currently are funded through the model to run a grant making body. Here is a schematic showing the various entities and the flow between them. The introduction of Newco and Local Authorities centralises the administrative grant making functions while decentralising the decision making function.

The high level tasks each entity does is sketched out below.

Venue

Class 4 Operator

Newco

Territorial Authority

Grant Seeker

Ensures player welfare

Rental income from hosting the gaming machines

Manages assets and vendor relationships

Distributes grant money monthly to Newco

Determines National Percentage

Allocates grant funding to T/A

Assesses grant applications

Based on T/A decisions distributes funds to grant seeker

Manages accountability

Decision maker for National entities (could be Lotteries)

Makes local decisions on (say) bi-monthly basis

Applies to Newco for funding

Receives monies from Newco

Completes accountability to Newco

This model exists to some extent in Invercargill where the ILT runs the system.The decision makers are voted on at local election time.

Benefits
Increase of grant money to good organisations. Taking this function away from the pokie will reduce the ability for organisations to game the system.

Improved cost structure.With the risk of bad actors reduced mitigating compliance costs can likely reduce. Newco could be funded by moving the grant side of the funding to Newco, and some DIA funding to that entity as well. Perhaps Newco could have some of the better industry participants as shareholders: indeed there are processes used by some at the moment that could be scaled up. At worst this would be cost neutral. However the costs for the NFPs would be enormously improved: with only one body to apply to, rather than the current system, application costs would come down and the NFP can realise productivity improvements.

Money reinvested back into communities where it came from. Using this system there would be less chance of siphoning funds off to favoured groups outside the region where the funds were generated. Local government are likely to be highly supportive given further funds to manage locally. There may need to be some funding to them to help with that decision making, but given the assessment and administration are centrally managed this is likely minimal.

Issues
Loss of funding for some groups.This is likely to have a negative effect particularly on those for purpose class 4 entities. This includes Mainland Foundation (Canterbury Rugby), TAB, Air Rescue Services Ltd (Canterbury West Coast Air Rescue Trust) and Youthtown (Youthtown). The charities noted here receive significant preference funding from the Class 4 operator. In the above scenario the charities are likely to have to compete with others and would likely have reduced funding.

Change of funding models. Some codes, such as football or rugby, are highly reliant on pokie money to subsidise the high level sports. Its unlikely that such organisations would get favoured status under this model as decisions are more likely to be around participation. This would require the peak entity to address systemic funding issues.

Class 4 entity push back. The granting of funds for some is a big reason why they exist. This proposal would strip the grant making function from these entities to one of machine and vendor management. This would also strip some revenue from them as the grant making side is sectioned off to the new national entity. That said they would be able to restructure their business accordingly.It would likely lead to industry consolidation which seems a good thing.

Summary
Class 4 gaming reform is fraught with challenges. Many do not like the model, however it provides much needed community funding. Every time that reform is proposed, community groups are asked to oppose. This proposed solution achieves two objectives:

improve the allocation of that funding.
improves cost to serve

By moving the decision making to democratically elected local representatives who better understand the nuances of their communities we could get improved funding outcomes: eliminate the ugly, minimise the bad and maximise the good. We could also improve the cost to serve and radically improve the productivity of a sector which is stuck in the past around process.

Thoughts? Or is this the crazed ramblings of a woman a little obsessed? I will open comments but they are likely to attract scammers so be warned.

Looking at Four Winds

Sat, 03 Aug 2024 04:30:18 GMT

I’ve fallen off the grid of late so I do apologise. Truth is its hard doing this stuff and seeing nothing happen. I do feel its important to try and hold people to account, but with so little change happening it’s a little disheartening. And I was looking at Four Winds and just got bored.

Which is surprising. Four Winds are a pokie funder who gave just over $200k in six grants over 18 months to Angel Children’s Education Foundation. Of course you will remember Angel from such headlines as:
Million dollar library never opens yet claims small fortune in community funds and
The $1 million library that never really opened appears to close for good

So I had high expectations for me: some considerable outrage and agitated typing and boring my friends with outlandish tale. But no. The grants to Angel do seem to be outlier(ish). I’ve looked at their published grant distributions, downloaded, cleaned and categorised. Unfortunately they only have published from April 2019, so we only have five years of grant data. Their financial year ends 31 March, so my years are 1 April to 31 March.

They are really quite general in distributions which is really helpful for those seeking grants. In the five years under examination they have provided grants to over 2,100 community organisations, at an average grant of $9,400. As at the end of 2023 they had 25 venues and gave away $13.4 million in the last financial year.

If we look at this from the system level, that's about 4% of the total pokie market by grants given.

I have copied the below information from their website:

Four Winds Foundation funds are available for activities that provide benefit to a significant portion of the community in a non-commercial sense. The type of charitable organisations that the Foundation envisages assisting generally falls within the following descriptions:

Sporting clubs/teams
Cultural (e.g. performing arts, historical societies and cultural groups)
Philanthropic (organisations that are there for the benefit or welfare of the community e.g. health, foodbanks)
Educational groups
Groups who serve community purposes (e.g. scouts and senior citizens )
Other groups that align to our funding criteria not specifically mentioned above

A couple of rules they have (again copied from their website):

Only 4 grant applications per applicant will be considered in any 12-month period‍
Only 1 grant application per applicant will be considered in any month
An important requirement for funding is the provision of a signed set of the organisation’s annual financial accounts in the application.

Looking at where their grants are actually applied, 46% are going into Sport. This is actually quite low for a pokie, although it must be remembered that often the grants to schools are for sport and I usually categorise them as Education. Still, nice to see a real balance into all community groups. I haven’t analysed the declines, but the data is there if anyone wants a crack at that.

You know I love having a look at where the Sports grants go. The luckiest code is football (see this blog for what happens in that sector), although that’s tapered off a little of late. Runner up was rugby union, with basketball nipping on their heels. Impressive to see Netball in the top 10!

We can also look at the communities that Four Winds funds into. Not surprisingly, the top is Auckland and Wellington, but there is a fair bit headed to national organisations.

Funding regions are of course driven by where the venues are: as at 31 Dec 2023 45% of Four Winds machines are in the Auckland region. They also lost 50 machines in the 2023 year, which explains why their 2024 donations are down. This loss is regular churn rather than venues closing.

Another view is of course who they give grants to. Below is the top 20 organisations over five years of data. By and large fairly mainstream although Lower Hutt AFC may be feeling the pain.

I thought I’d also have a wee look to see if they comply with their stated criteria.

In terms of numbers of grants per annum, I’ve cut the data to see the top 10 in terms of number of successful grants. So yes, by and large they do stick with their criteria of no more than four grants in any one year, with one exception, which could be a timing issue.

Looking at the next criteria: that a signed set of accounts is included in the application: sorry but I didn’t reconcile all the grants against the date they were incorporated, nor if they have submitted accounts to the Charities Commission. However, I did see a one name (of a few) that popped out to me: NZ Sports and Community Development Trust registered with the Charities Office 20 September 2023 and received funding from Four Winds of $40k in two grants: one in the six months April 23 – Sept 23, and one in Oct 23 – March 24. So they look to have not followed their stated policy in this instance. NZSCD have also received considerable start up grants from Blue Sky, Dragon, Rano and Akarana according to Granted.govt.nz: just over $400k in total. Not saying anything is wrong here: now it could be that they are helping an organisation to start up, but if I were in charge I’d have hard look at this.

I write about this stuff as believe that as need to understand where funding comes from, where it goes, and how it gets there. No one else seems all that interested. As a citizenry we allow both those supplying money and those asking for money to operate, and as a community we need to ensure we have oversight over the organisations they choose to fund. Love to talk with you if you think this is at all interesting, and if you want to dive into the data a bit more than happy to do so. Check out my website http://www.delfi.co.nz/