My last blog made me think a wee bit.  I was looking at The Trust Community Trust and where their money went.  In the course of this, I looked at the relationship they have with a few of the licensing trusts in Auckland, and thought that deserved a bit more of a look.  And of course the Sunday Star Times looked at this in 2011.  Now, I’m not an accountant, but can fumble my way around a set of financials – although to be honest, the accounts I could find are not that flash in terms of disclosure.

I looked at the Invercargill Licensing Trust a few months ago.  http://www.delfi.co.nz/blog/dabbling-in-the-funding-ecosystem .  Their annual report states they have total assets of $87.8 million.  From that, they made a net profit after tax of $5.6million: $4m came back to the community through grants, and the balance was reinvested in the business.  So this makes a 6% return after tax, with 4.5% coming back to the community. In addition, they generated $4m from their gaming trusts, which are run through their venues. 

Now, Portage and Waitakere Licensing Trusts are based in West Auckland.  Between them they have total assets of $41.7 million.  From those assets, they generated a net after tax profit of $4.3m. In both cases, the Trusts’ cash has gone up, by a total of $4.6m.

Now, a 10% return on total assets is pretty good I would have thought.  And if this was Invercargill, that funding would have gone out into the community.  In the Auckland case, the funds sit within the current assets of the business.

“Giving back” is an important facet of the proposition of the West Auckland licensing trusts.  This year, they have done this via a tool kit into every home in the region.  Last year, according to the website, it was smoke alarms.  Now, while a free gift is a lovely idea, its possibly not quite what the residents had in mind when they set these trusts up.  What would I do with a new smoke alarm? Tool kit? Land fill I am afraid. 

They also list sponsorships, grants donations and rebates to the community as ways they give back.  There are some examples listed, such as the Mystics, but sadly the accounts give no insight as to what the dollar amount of this actually is.  Indeed, looking through one recipient, Waitakere City Stadium Trust (The Trusts Stadium) I checked out their latest accounts: it looks like there is no money from with Licensing Trust: rather there is a $200k grant from TTCF, and undisclosed naming rights from West Auckland Trust Services Ltd, who have a management contract between both Trusts (and no disclosed financials). To me at least, naming rights are not a grant, so cannot be considered as “giving back”.  As many of you know, there are (or should be) commercial benefits in naming rights.  The other thing: this information was imparted through the section on Related Party transactions. 

So to me, it looks like not much has changed since 2011 when SST did its review of the Trusts operations.  All the grant money comes from pokies, none (to speak of) comes from alcohol sales. If they distributed the same amount as ILT, then we should expect around a $2m contribution to the community through grants. Were the Licensing Trusts not in place, then of course those venues would operate pokies, which are legally obliged to return profits to the local community.

What this does is highlights to me why we need to look more closely at those funding our local community groups, and not get caught up in a halo effect around the good they purport to do.

And while on that subject: submissions to DIA for the Class 4 review closed on Friday.  I learnt something new as I did my submission: click here if you want to have a gander at this.

Would love to talk with you if you think this is just a little bit interesting.

You might have seen a big newspaper ad for The Trusts Community Trust Foundation’s distributions a few weeks ago.  They were publishing their grants from 1 April 2015 to 31 March 2016.  And I’ve done my nerdy little thing to look at where their money has gone.  Its quite interesting… the charitable purposes they can apply funds to are very wide ranging, so this profile is quite different from some of the other pokies. 

These guys do give money to a variety of organisations across the board, including about 8% of last year’s money to the Environment!  This is surprising: you may recall that in Canterbury, Environment only receives 1% of total grant money.

Of course there is the ubiquitous sport: sport received 26% of the total funds.  Not as much as the others of course. 

This challenges an assumption I had made about the sector: that venues were keen to support sport through their pokie take, as saw giving to sport as a way to pull in customers.   This suggests that where the money goes to is perhaps a little less important to venues than I had assumed. 

So where in New Zealand did the funds come from?  Well, of course they are skewed by where the money was raised.  Just over 80% of the money has come from Auckland.  They have 54 venues, 18 of which are in Auckland, which I guess shows how much is put through those Auckland venues. 

Just a wee hmmm moment: there was $1.1 million come in from Auckland venues in Onehunga and Henderson.  Of that, some $184k has gone to trotting clubs – clubs from Auckland, through to Hamilton ($56,000!), to Oamaru and Rangiora.  Harness Racing Waikato have their 2014 financials up on the internet: grants made up over $1m of revenue (28% of total revenue), up almost $1m from the prior year.  And you might ask where that was spent: well, stakes rose $1.4m.

Now, forgive me if I’m wrong, but where is the line here between charitable purposes and propping up an industry?  And just wondering if the good people of Onehunga and Henderson have no other needs for those funds?

And another: Plunket car seats.  I see that Plunket is actually phasing this service out.  Yet last year TTCF donated $350,000 to RNZPS Waitemata… in 2014 the total book value of these assets at this branch was $20k.  And other Plunkets were told not to fund raise for these assets.  It will be interesting to see what happens to these assets once the car seats are wound up.  And it seems like a grant out of kilter with previous years… they received a total of 69k in 2013 and 68k in 2014.  So how come the huge investment in an obsolete service line?

TTCF seem like one of the good pokies, in that they provide funding across the spectrum of NFP.  And its marvellous to see that they use publicly elected officials, those in the Licensing Trust roles, to support them in making decisions about where grants go.  That said, there has been some media comment about the relationships between those elected officials.  But as far as diversity goes... well, the same comment as last time… as far as the organisation goes, it does seem to be very male dominant.

Of course the Class 4 consultation is currently happening, so if you care about this stuff please exercise your democratic right and respond.  Mine is in draft: happy to share with anyone.
And while we are at it, this has come through on email....

Give charities fair funding
Update the regulations for funds from pokie machines to ensure equal funding is available to all kinds of charities instead of most of it going to sport. Charities providing social services, community projects, arts/culture and environmental protection deserve just as much funding as sports.
https://our.actionstation.org.nz/petitions/more-funding-for-social-services-community-and-environment
 
Would love to talk with you if you think this is just a little bit interesting.