I’ve just done a wee presentation to the Combined Community Trust conference last week.  As a part of this work, I looked at what quantum of dollars was contributed by gaming trusts to the total grant pool.  In 2014 in Canterbury, the total contribution from gaming trusts was 52% of the $65m given.  In Otago, the figure was a bit lower, at 29% out of the total pool of $22.3m.

I thought this was quite interesting, and wondered if this was due to the number of machines, or a lower spend.  DIA has a huge amount of data on its website, so I had a gander at the December 2015 data on gaming trusts.

Otago has one machine for every 217 people, and Canterbury has one per every 274.  So – Otago has more machines per capita. 

So that leads us to spend.  The spend figures are of course nett of winnings, and of course these run at between 90 and 95% of all that goes into the machine.  So, according to my data, every person in Canterbury contributed $73 to the nett gaming proceeds, and in Otago it was $35.
All very interesting – but so what.  Aside from some commentary about society, and the joy the management accountants must feel for the Canterbury assets, the data (to me) highlights some of the biggest concerns around the funding ecosystem.  Can we imagine a Canterbury where the population’s pokie spend is more like that of our Southern neighbours?  That will reduce the pokie grants by $15m.  Will that make a difference to local not for profits?  Silly question.  And what say the good residents of Otago get gripped by the pokie bug and up their spend to that of Canterbury’s?  That would increase the funding pool by $7m.  Would that be hoovered up? 

Lotteries have announced lower distributions due to lower lotto spend.  In Canterbury 2/3 of funding comes from gambling: either lotteries or pokies. This funding ecosystem has issues in both supply of grant funding, and in demand for that funding. 

It would be interesting to have a detailed look at Southland at a macro level: I have spent an hour or so poking around various funders in the region.  The Invercargill Licensing Trust as a funder in 2015 put $8m into the region: $4m from liquor, and the balance from gaming machines.  Other pokies (from my back of the envelope calculation) put $3m in 2015, and the local community trust just under $7m.  Divide that by population, leaving around $200 per person – Otago’s and Canterbury’s is 60% of this.  Now, trying to find a bottle of wine at the supermarket is impossible down south, and the funding source is effectively another vice, but I would suggest that what is effectively a community tax is funded by a far broader demographic base.  I would also hazard a guess that the ratepayers of Invercargill possibly do not need to fund local government grants, and indeed, looking through the ICC’s annual reports local government grants seem to be minimal.

I guess it’s too late to get the licensing trust genie back in the bottle for the wider nation, but perhaps if I was queen and looking to legalise (or tax) something else, perhaps there would be an opportunity to siphon some off for community purposes.  Although – 10 cent sugar tax on the 518 m litres drunk in 2014, less administration of say 50%, probably won’t make much difference to community funding. 

Would love to talk to you if you think this is quite interesting too.

With winter sports season upon us, I thought it might be interesting to dive into some sports funding by code.  Over the past few years I have seen a few requests for funding from sports clubs, and I have seen the other side through some sterling work from my significant other in sports admin.  I have come to the view that sports funding has “trickle up” from juniors to seniors, and thought I would see if the data backed up this view. 

If we look at where Canterbury’s 2014 funding went to, sport received almost $20m from grant making bodies.  Let’s take football as an example, which received just under $2m of this $20m.  I have looked at those clubs getting grants, sourced the latest available participation numbers by club from Mainland Football’s website (and made some assumptions here), and extracted the club financials from the Societies office website.

There are a couple of things which are apparent when we drill down.
Firstly, elite football in Canterbury relies heavily on grants.  Looking at the 2014 accounts, the Canterbury United football team received $431k in revenue.  Of this, around $15k (that’s 3.5% of revenues) came from gate takings, sponsorship accounted for almost $75K, and internal fundraising were around $73k.  That’s $156,894, or 36% of their income, from their own efforts.  Almost 50% ($212,769) came from donations and grants, $34,200 came from a grassroots levy paid by all registered footballers in region from 4yr olds up to support the team. Finally, some top-down revenue with FIFA kicking in almost $30k. 

Secondly, Mainland Football had an operating revenue of $2.3m, with the largest expense being administration costs of $840k.   They have bundled sponsorship and grants income together at $821k, so it’s hard to see exactly what the grants total, but my database tells me that they got almost half of this from grants.   Their website tells us that 40% - $930k - of this income goes towards Football Development.  Yet some clubs also have football development officers.  How much football development is actually necessary?

Lastly, different clubs have different wants when it comes to grants.  I have not looked at every club, but in 2014 one club received almost $500k while others got some smaller amounts of a couple of thousand.  Sadly, the club with the largest grants requirement of $500,000 have not updated their financials since 2013, so it’s hard to see where the money has gone, although I imagine some of it is facilities.   Some clubs have grants of over $400 per registered player, others as low as $25 per head – and some will have none.  Why the difference? 

Players pay an average of $122 to play the game for the season.  Some clubs look to grants for over two thirds of their total revenues.  Some clubs pay coaches to coach both junior and senior level players.  Some clubs kit their players out in personalised gear, and send them off on tournaments.  Others don’t.  What is acceptable for the community to pay for?  What’s acceptable for those who play to pay for themselves?  I guess different clubs have different views on this.
Those with teams in the top grades have the highest grants per player.  The data does support the trickle up theory.  Does having local elite level players pull youngsters into footie?  No data, but not in our case.  The reason my kids play is because they can play with their buddies, and they love watching their dad getting respect from others as coach.

Can a club be sustainable simply on user pays subs?  Based on our own experience of a little junior club, I reckon the answer is yes.  During our family’s time at the helm, reserves more than tripled, as did player numbers.  It can draw on its members to do things for the club, use duct tape to fix equipment, recycle uniforms, and most importantly, provide programmes that work for families and focus on participation.  Families who could not afford the subs were covered by the club.  Next question: should a club be sustainable simply on user pays?  It comes down to how we view sport in NZ, and is probably too big a topic to attempt to tackle here. 

Why is this important?  A dollar given through a grant is just that – a dollar.  It’s a dollar spent on sport, rather than say, public art, health research, dysfunctional families, or dyslexia support.  As more pressure comes on funders, what with reducing Lotteries contributions, sinking lid policies on gaming machines and the like, we as a society need to have some more visibility over where the money comes from, and where it goes. 

Should funders look at benchmarking?  Absolutely.  Funding is a market.  As clubs and codes have to fight for new players, the flash facilities and offer will swing many towards those higher cost clubs.  This has the knock on effect of pushing lower cost clubs to a higher cost model.

Would love to talk to you if you think this is quite interesting too.