Blog Posts

BlueSky, Dragon, Milestone and Rano 2024 Update

5/11/2024

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/

0 Comments

Air Rescue 2024 Update

18/10/2024

0 Comments

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/

0 Comments

Five Years of Akarana Community Trust’s Grants

25/9/2024

1 Comment

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/

1 Comment

Some thoughts on the pokie model

16/9/2024

0 Comments

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.

0 Comments

Looking at Four Winds

3/8/2024

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/

Whack - a - mole

9/9/2023

I have just been looking at one of the more boring grant makers which I thought was going to be action packed but sadly not (for me, good for the community). But I have got terribly distracted by some updates from Blue Sky, Milestone, Dragon and Rano.

Three of these have published their grants for their financial year 2023: Milestone publish on a monthly basis so I have included theirs from July to May 23. I looked at these four gaming trusts in August last year and raised a complaint specifically about Dragon. This complaint widened to include these four.

You may recall the Stuff expose on Angel Childrens Education Foundation. While I believe nothing happened in terms of legal action, the closure of the organisation and the reticence of the Trustees to talk does make you question the nature of these grants.

Looking at the Grant distributions of these four pokies over the years we can see some growth in grants given. 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 2023 they had 39 venues and 595 machines. Indeed, 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 almost $24m: 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, around 5% of total Class 4 venues.

I looked at the top 30 organisations getting funding from these four pokies over the 2023 year to date. 78% of the dollar value of those grants have gone to the top 30 organisations.

If we look at DIA's granted.govt.nz we can see how these decisions stack up against other pokie grant making. I have looked at the 2022 grant decisions. Rank refers to their position in the amount of money given per annum. For example, the Racing Integrity Board is 1st with $13.1m given last year. Youthtown is second with $6.8m, and Canterbury West Coast Air Rescue Trust 3rd with $4.4m. You may recall I have commented before that DIA does not clean their data: I have had to add few figures together: trick for newbies if you try and get the same numbers as me. Of the names I recognise from looking at these guys:

	Rank in overall funding from all pokies	Total Granted	From this cluster
Supreme Sikh	7	$2,016,056	$371,632 (most comes from Akarana)
New Zealand Culture and Media Group Ltd	8	$1,934,936	ALL
Inspired Families Foundational Trust	23	$858,730	ALL
Natural Environment Defence Fund (now Asian Community Engagement Trust)	26	$757,805	ALL but $936 ex Lion
Woman Care Trust	34	$648,369	$163,892 balance from Akarana Grassroots and Four Winds

What I take from this is that those making these grant decisions put a lot of faith that the above organisations will make a real difference to the communities they operate in.

Since stumbling across these operators over the past year I have learned a fair bit about leading indicators in what could be a tricky relationship between pokie, venue and charity: frequent amounts to relatively new organisations with a small number of trustees. With the analysis below I'm not saying these grants are dodgy. It may be that these are organisations who do great things in their communities, and that these four funders can be applauded for giving a leg up to new organisations. But if I were overseeing the integrity of the grant making system, I think I'd have a good look myself.

Of these organisations receiving funding, four groups registered as charitable trusts last year and one this year: below is what they got awarded in grants this financial year.

Name	Amount	No. of grants	Date Registered
Chinese Senior People Help Centre	$109,510 all from Blue Sky	12	28-06-22
Happy Valley Women and Children's Foundation	$294,846 ($279,603 ex Blue Sky, balance from Rano and Milestone)	16	20-10-22
Moana Sports and Cultural Trust	$116,186 ($64,929 ex Blue Sky, balance from Dragon)	10	05-05-22
New Zealand Culture and Arts Foundation	$157,272 ($125,148 from Blue Sky, balance from Rano)	12	23-05-22
Te Karere Community Trust	$100,920 all from Blue Sky	4	05-05-23

Te Karere Community Trust is looking to set up a community newspaper and a community library. They are not yet registered on the Charities register. Solid funding for an organisation that only registered in May this year and I can't seem to see it on Google.

Organisations who registered as charities in 2021 received significant funding in the 2023 financial year.

Name	Amount	No. of grants	Date Registered
Angel Heart Charitable Trust	$180,842 all from Blue Sky	26	03-02-21
Metro Club Inc.	$67,310 all from Rano	5	09-04-21
New Zealand Culture & Media Group Limited	$2,040,283 ($1.18m from Blue Sky, $25k from Milestone, and $99k ex Rano)	80	27-04-21
New Zealand Edutech Trust Ltd	$362,837 all from Blue Sky	12	16-08-21

This is interesting: Metro Club dissolved earlier this year and then re-registered without providing any financial accounts. In the time they were active they received $166k all from Rano (Note that Rano has given to Metro Club and Metro Sport and Cultural Club of which there is no record. I have assumed they are the same entity). NZ Edutech has some linkages into the Angel Childrens' Education Foundation with some former trustees in common. And New Zealand Culture and Media Group has been getting significant money for some years before they achieved charitable registration. Angel Heart: well not quite sure what they do as haven't been able to google them. They did receive COVID support money of $80k for four staff in 2021. Their registered address is a residential address in Hobsonville which looks to be the address of one of their trustees and the charity did pay a rent of $25,800 in the last accounts.

Sadly one of my favourite organisations, Sports Development Foundation, seems to have fallen off the funding list in 2022. This organisation has received $1.3m since inception in 2018. The old website used to talk up the trips they took to Snow Planet teaching kids how to ski. In 2021 they had a registered address at 211 Richardson Road, an address shared by Richardson's pub (yes you read that correctly - a kids sport charity operating out of a pub) for which they paid $78k in rent in their financial year ended March 2021.

I could go on. But here is my point. DIA is (I believe) looking at the issues previously raised. However, as I suspect is happening, the principals just shrug and start up again, just like Whack - a - mole. Indeed, as I have talked about in my last two pieces, these practices seem to be quite commonplace within the industry. If the regulator isn't going to do their job, then let others get on and do this! Heck, if I had a small slice of the over $200m tax income from the Class 4 pokie game I'd employ a lawyer, auditor, ex copper and some genius who can set up a database better than my Excel spreadsheets and I reckon we could stop this illness and get community income where it belongs: to helping organisations make their communities better. I think we now know what to look for, and the KPI would be that 100% of grants to 100% of organisations serve charitable purpose.

It would mean my blog would be far more boring, but boring is sort of what you want this grants to be.

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. 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/

Spotlight on Rugby Union

27/8/2023

In my last piece I looked at the pokie funding situation around football. Of course in this country the oval game of football is preferred. But how does that relate to pokie funding? DIAs 2022 review of pokie data shows Rugby Union who got $23.4m.

One thing to remember: with pokie grants the DIA is quite firm (well, at least on their website) on the fact proceeds can only be used for amateur sport. From the DIA website: “Professional sports are not authorised purposes, except where a professional is involved in coaching, training or development for junior sport. Grants could be made for short term coaching courses, not a full-time salary.”

I have used Granted.govt.nz and pulled out the amounts going to the regional bodies which I reckon is quite interesting.

Some big blobs of cash in there right? And one teeny tiny one. Poor old Otago. The difference is of course is based on the gaming trust that’s operating in the region.

Lets look at 2022 data. North and South are the sole funder of Auckland and Grassroots the vast majority of Waikato. Wellington have to work a bit harder for theirs with grants from ten different pokies: NZCT, One Foundation and Four Winds are the three that gave over $100k. Canterbury’s all from Mainland Foundation, and Otago’s some small amounts from Grassroots Trust Central, Aotearoa Gaming Trust, The Lion Foundation, The Bendigo Valley Sorts and Charity Foundation, and NZCT.

Its really hard to see how these funds are used. Many of the accounts are pretty summarised. The accounts do exclude the likes of the Crusaders as they are a separate legal entity: the direct activities of some of the Unions do seem to be NPC down, although some have NPC teams as a stand alone entity. Further, not too many actually disclose the numbers of players. However I have pulled this together:

Of course money also flows through to the smaller unions and of course the clubs. Looking at the NZ Rugby Union 2022 annual report, they state there are 147,847 players. If we look at the total grants to rugby, that’s a community pokie subsidy per player of $158. Which actually compares well to football: I just looked at player numbers from the 2021 annual report and the number there is $180 per registered player.

It would be quite interesting to dig in a bit more around how these funds are used, but there is very little clarity through the accounts.

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. 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/

Football's Little Secret

16/7/2023

Unless you live under a rock, you will have seen that FIFA’s Women’s World Cup is about to start, so I thought I'd have another look at the money side of things here in NZ. For a while I have been looking at pokie grants as I have seen that where money comes from, where it goes and how it gets there is something that’s pretty unexamined. DIAs 2022 review of pokie data shows that Football received a total of $17.34m last calendar year from a total spend of $328m: second only to rugby who got $23.4m.

Like anything, community grants are subject to supply and demand issues. As the supply of money grows, perhaps due to legislation (in the case of pokies and community trusts) then the demand for that money grows accordingly: costs like roles which were previously done by volunteers, friends and families. There will never be enough money to meet the wants of the community sector.

Let’s look at the demand side for Football clubs. What I have noticed over the years is that some football clubs have close ties to specific venues who then host pokies who are exceedingly generous to said club. This is often despite Section 113 of the Gambling Act which prohibits key people involved in a venue to have a say in where grants go. Anyone found guilty of doing this will be fined up to $10,000. As an aside if I were in charge I might also consider putting the $10k fine up: perhaps to the value of the money siphoned off to the grant seeker.

You can see some of those activities in these old blogs:
http://www.delfi.co.nz/blog/looking-at-grassroots
http://www.delfi.co.nz/blog/update-on-air-rescue-trust-2022
http://www.delfi.co.nz/blog/a-million-dollars-a-month

The impact of these relationships can be quite profound. It would be helpful if sports peak bodies published the number of registered players that each club has, but they don’t. Nor do many organisations publish their annual accounts or player numbers. But we do have some hardish data:

DIA’s Granted.govt.nz website. The dollar amount below is as at 8 July for the full calendar year. Great the figures for the full 2022 year now published, and great to see data back to 2017. However the data still needs to be cleaned - there are multiple ways to spell the same entity, and some of course change name to reduce detection.
Mainland’s competition framework which I can use as a proxy for player numbers. I confess to counting these up off a website counting up all the junior, youth and senior grades without my glasses so may not be hugely accurate, but likely within cooee. It will also exclude in house footie programmes that tend to be for the young kiddos, or in the case of University the social intra club teams. In brackets I have put the number of male and female teams in the higher cost top league which involves considerable travel.
Annual accounts where they are provided from Societies.govt.nz. Coaching costs are interesting: see this Stuff piece around how some clubs approach this. https://www.stuff.co.nz/sport/football/129546987/the-sham-of-amateurism-in-top-club-football

I’ve looked at some football clubs in Christchurch and one in Nelson and collated the data below.

Some quite different business models appear to underpin these clubs, but there are a few questions I’d ask:

What is a reasonable pokie subsidy? I don’t know why Cash Tech need so much: the many times our kids played them over the years we played at a Council park at the back of a school. Their kit was fancy though! I do acknowledge that organising all these teams would take a lot of admin effort but families do pay to play. And of course: grants can’t be used for support of professional sports.
Christchurch United stands out as paying a lot for coaching yet not having any grants. I suspect a lot of this is underpinned by their Academy in terms of paying that cost.
Universities again gets no grants. I expect they benefit from association with the University as a home base.
SAS’s coaching costs are pretty high. Looking at 2016, there was a line item “Coaching Training and Courses” with a cost of $11,286. Six years later the Coaching figure is $104k.
How do funders determine where money is needed. What is the “right” level of user pays? How much of the community subsidy goes to subsidising the clubrooms aspect of the organisation? How much to support the amateurs playing at the top level for their clubs? How do the clubs manifest the national sporting strategies? And are they financially rewarded for this? I am totally happy to benchmark this for you funders!

It would be rather amazing if, as a legacy from the FIFA event, that the sports body could develop up a more sustainable funding model for football: one that doesn’t soak up 5% of community funds generated by Class 4 gaming machines. It would also be great for DIA’s enforcement team to investigate and prosecute for infringements of the Act. I suspect that many operating the clubs are simply not aware that their activities are compromised given a lack of consequences.

Rugby is a different kettle of fish. DIA’s report shows that Rugby received $23.46m in 2022. I’ll look at that later.

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. 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/

Photo by Peter Glaser on unsplash

Looking at Grassroots

4/3/2023

0 Comments

In the recent article on Angel’s Children Education Foundation, Grassroots was mentioned as a funder who had given them almost $50,000. Turns out this was granted in April 2021. A further two requests, both for $46,666, were declined in that year. I’m curious about them, and where their money goes so did my usual thing: downloaded their grants, cleaned them up and had a squiz at the results.

Grassroots is primarily a North Island based funder. There are two parts to them: they took over Infinity a few years ago now. That now operates under Grassroots Central. This piece looks specifically at Grassroots. They are run by a board of six (five men, one woman).

Their authorised purposes are fairly general:
Grassroots Trust Limited is licensed to operate gaming machines to raise money for the following authorised purposes:

Amateur sport.
Any charitable purpose.
Any non-commercial purpose that is beneficial to the whole or a section of the community.

The above authorised purposes include, but are not limited to, applications for the promotion and development of:

Amateur sport through direct support of sporting bodies. Grants will only be granted to sports bodies which are formally established and legally constituted.
Community organisations which are established for charitable, educational, or cultural purposes beneficial to the community or a section of it or any other purpose beneficial to the community or a section of it.

They also have a policy of ensuring the funds end back in the area they were generated from. I have looked at this before: see this piece on Rotorua.

They manage just under 7% of the total number of gaming machines in the country and give out a sizeable amount of money to the community each year. Below is a chart showing the grants by sector. A couple of things to note about this.

In 2018 Grassroots had 664 machines under their management. By Dec 2022 this had grown by 50% to 998 machines. We can also see the effect of COVID on their grants. They have a heavy presence in the north part of the North Island, so of course were more negatively affected by lock downs. The 2023 bar represents eleven months of grants: I would expect them to add another two million to this total by financial year end. Around two thirds of this money goes to sport. The next most popular sector was community and economic development, sitting on 12.5% closely followed by education on 12.4%. You need to remember that education grants are often given for sport however, but this grant maker doesn’t disclose what the grants were for.

Which sports? Ho hum. Grassroots are huge supporters of rugby. This mostly goes to the big unions: Waikato and Bay of Plenty. The top funded sports look similar to many other grant maker’s profiles, although in Canterbury I'd expect to see Bowls up there.

Lets look at the top 25 funded individual organisations over the past 35 months. I’ve also thrown in grant count.

If an organisation put in one grant application per month over the period we are looking at, that would be 35 applications. There are some big numbers here: Waikato Rugby Union on 54 applications to get $3.4m, NZFuture Community Trust on 45 to get $706k, Dynamo Cycling on 33 grants to get $533k. That’s a lot of paperwork.

Now, to be honest I’m not really sure why these rugby organisations need all this cash, and then quite why these organisations feel compelled to give it to them. Unlike Mainland Foundation (for example) there is nothing explicit in their charitable purposes about supporting rugby.   It will be interesting to see what demand is like with the Silverlake deal in play – do you reckon that will displace pokie funding, or add to it?

I’ve started to look at linkages between venues and those seeking grants, and raised an eyebrow (and another complaint in November 2022) about these guys.

There is a bar in Hamilton, the Junction, with a legal name of PYN Investments Ltd. A former shareholder of this company has the same name as the General Manager of Hamilton Wanderers Football Club. Yep, the club that over the past 35 months has received $1.2m in 30 grants off the Grassroots Trust. We also have The Smith and McKenzie Chopshop, legal name Belgian Blue Ltd. This is a part of a wider commercial structure called Summerhouse Trustee Ltd, owned in part by a chap who seems to be in partnership with a likely service provider to the Hamilton Wanderers club.
Of course, venues are not allowed to have any influence on where money goes. But it does make me wonder if and how Grassroots Trust deals with such potential conflicts of interest.

What is interesting is that there were no grants given to Hamilton Wanderers Football Club since I made the complaint in November. So maybe I am making a difference!

We also have a lot of grants going to NZFuture Community Trust. They set up as a Charitable Trust in 2017. They have a website, Facebook and report back on their service delivery. And yes, there are 45 grants going to this organisation. But there are also 50 grants going to Waikato Rugby so maybe large numbers of applications are quite the norm for this organisation.

We also have a large number of grants going to Dynamo Cycling and Sports Club. 33 grants – that’s basically one grant a month. I can’t find a website for this club: rather a link to Dynamo Events which “..is a sports event delivery company that has a commitment to excellence across all facets of the event experience.” There is no company with this name: the nearest is Dynamo Temporary Fencing Ltd owned by the same people. I can’t see a pokie venue link between the parties, but I didn’t look that hard. Dynamo Cycling and Sports Club's accounts suggest 2/3 of their income comes from grants. Do other cycling events rely so much on grant money? I haven't looked.

But then again also noteworthy is some grant making that looks a bit like the activity in the Angel story: frequent amounts to relatively new organisations. Specifically, Amah Trust registered as a charity in April 2022. Since then they have received three grants totalling $66k. Similarly, we have the Baaj Sports and Cultural Trust which registered in August 2022 who received $28,838 two months later from Grassroots. We have the Kiwiora Community Trust, which applied to register August 2022 and who has already received $65k in three grants from Grassroots. We have the Hamilton Youth Club Inc, incorporated in Sept 2022 which received $44k the following month.

I’m not saying these grants are dodgy. It may be that these are organisations who do great things in their communities, and that Grassroots can be applauded for giving a leg up to new organisations. But if I were overseeing the integrity of the grant making system, I think I’d have a look myself.

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. Check out my website http://www.delfi.co.nz/

0 Comments

Update on Air Rescue Trust 2022

7/1/2023

0 Comments

In 2022 we have seen the media get into some of this grant space, and thank goodness. Here's hoping we get some real traction on this in 2023.

https://businessdesk.co.nz/article/charities/supreme-sikh-council-under-scrutiny-over-crematorium-pokie-grants
https://www.stuff.co.nz/national/129999258/new-pokie-trust-in-canterbury-gives-only-one-local-grant--so-far
https://www.stuff.co.nz/business/130205773/milliondollar-library-never-opens-yet-claims-small-fortune-in-community-funds
https://www.stuff.co.nz/national/crime/130287653/pool-champ-and-pokies-boss-on-dishonesty-charges-after-major-investigation
https://www.scoop.co.nz/stories/AK2211/S00381/former-publican-found-guilty-after-buying-audi-with-grant-funding-from-pokies.htm

Still to hear about the results of my (numerous) complaints. Anyhoo,... some of this reportage particularly made me 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.

I would also like to remind you that venues are not allowed to have any say in where grants go. That is in the legislation.

What I have done is pull their grants data that ARS has made to the end of their financial year June 2022, and added this to my previous work, cleaned it up and categorised it. Here is a chart looking at where their money has gone over time. No surprises: money mostly going to their CWCART and a large amount to sport. What is interesting however is the growth in the dollar value of grants over these ten years. This is due to growth in venue management: in 2015 they had 420 machines under management: at the end of 2021 that had grown to 583. This represents around 5% of the total gaming machines in New Zealand. What I have also started to do is to look at who owns the venues (DIA does not do this – I’ve asked). Venue ownership 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.

The COVID effect is striking for 2020. Interestingly ARS has only recently moved into Auckland (after an effort which didn't end well earlier last decade), so the impact of that city’s lockdowns in later years is minimised.

This chart shows a few things:

Air Rescue’s grants have grown a fair bit. This is generally driven by venue expansion
Their core purpose, funding to the Canterbury West Coast Air Rescue Trust, has grown a fair bit too. We can only assume that demand is increasing here: as previously stated the operations of this are in a private business so we have no insights.

Football has long been a lucky recipient from these guys. I have had the scales fall a bit from my eyes as I’ve understood more about some linkages between gaming trusts, venues and clubs. Check out some of Stuff’s reporting on this. Below is the top 20 football organisations that have received money from Air Rescue.

Football grants have grown substantially: from 6% of total grants made to 16% of total grants made in the last financial year. These football clubs are mostly in Canterbury and in Wellington, although there are two Nelson sites, and some of these Auckland ones are getting their noses in the trough: Fencibles United got $118k from ARS in 2022. The Nelson ones are interesting. We have a site in Nelson, Hardy’s Bar, which is owned by a chap with strong ties to Nelson Suburbs football team. Indeed, this potential conflict of interest has previously been considered by the Gambling Commission in a 2015 judgment (GC22/15). And this was when the amount going to NSFC was less than $20k. Now? Looks like $182k in the 2022 year. For the record, I did go to the Gambling Commission to ask how this judgement was managed and received this:

Unfortunately, the Gambling Commission is unable to assist you because it is not within the Commission’s jurisdiction to look into complaints of the type that you have raised. Any complaints in relation to class 4 gambling should be made to the Department of Internal Affairs because it is part of the DIA’s job to investigate such matters. Obviously you have done this, but it is not clear from your email whether the DIA has not investigated your complaint, or whether it has investigated it, but you were not happy with the outcome. If it is the former, you should continue to communicate with the DIA until you receive a substantive response.

I assume things are all tickety boo given I haven't heard anything substantive from DIA, and that Nelson community organisations are not getting penalised by this level of grants.

We can see a few clubs have fallen from favour, including Mainland Football.

Any keen observer of my website will also have remembered that ARS have a venue in Rotorua. In a site that theoretically generated almost $400k, they gave $20k to one school. Might have a dive down this rabbit hole in a later piece, but community groups of Rotorua: apply!

Another measure that I’ve noticed particularly with some northern based activity is that the number of grants given can be an indicator of relationships which may be tricky. You will recall from some previous work that I've seen this as a red flag: after all it can be quite involved applying for grants. Many pokies have policies around minimising the number of grants to individual organisations, limiting them to a couple per annum. Apparently not these guys.

Now that ARS has moved into Auckland we can see some changes in the way grants are being made. Above is a cut of the Year End June 2022 grants. I have pulled out the top 20 organisations being funded by number of grants. ARS moved into Auckland in 2020 picking up The Weighbridge Venue off Grassroots, and the two venues, 123 Karaoke Bar and 123 Palm Bar, in 2021, both off Youthtown.

The most funded organisation with 26 grants is Jasmine Arts and Culture Charitable Trust. This charity was registered in Jan 2018. According to Granted.govt.nz it received around $50k from Youthtown in 2019, nothing in 2020, and then in 2021 a further $50k from Youthtown, and $176k from ARS. Curious don’t you think that this organisation only received pokie grant money from the two organisations which were associated with the above venues? Jasmine’s own accounts state: The Trust's primary source of funding is through receipt of corporate donations from Youthtown. Additional sources of funding include a mixture of donation from corporate and individuals, who attend to various training courses and workshops.” It would be interesting to see if Jasmine’s accounts change this year to reflect the change of funders. Although I’m unsure how this sits with the stated purpose of ARS’s Special Purpose.

Dewey Centre Foundation registered 7 June 2021. They haven’t received anything in the calendar year 2021, but looks to have been busy in 2022, asking ARS for almost $85k, and receiving $75k. According to the Government’s Granted website, they haven’t received any money from anyone else to June 2022. Their website locates them at Unit 2, 9 Gooch Place in Auckland, just a couple of doors down from 123 Casino, a Air Rescue Venue.

Drury Youth Charitable Trust registered 2017 although have not submitted any annual accounts since 2020. In 2019 they received $36k from North and South, and $10k off Youthtown. Nothing in 2020. In 2021, according to Granted.govt.nz they received $95,731 all from ARS. In the 2019 accounts most that money went to salaries, rent and costs of a tournament. In 2020 there was no rent paid. Since ARS started funding this group in Q1 2021, they have provided some $125k of cash, and the charity has asked for $160k: a 78% strike rate. I can't find a website.

One other change this calendar year which made me go hmmmm is another venue change. In the September 2022 quarter The Rudder, an Auckland venue, moved from BlueSky to ARS. This venue used to have a person involved with Angel Children’s Education Trust as a shareholder. You may recall a piece Stuff did on that organisation (note – the above link used to work before the Stuff article). Looking forward to seeing the Oct to Dec 2022 grants.

One Wellington organisation receiving a lot of funding quite often is Sport Education Community and Cultural Foundation (SECC Foundation). Registering on 22 Jan 2019 as a charity, the have received $729k from 36 grants, including $139k before they were registered! ARS is their only funder, and they look to spend all the money on sporting equipment for schools with no salaries nor rents.

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/

0 Comments