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The role of the lottery as a means of financing charity
Luxembourg's national lottery has historically been built on the principle of "public benefit": part of the proceeds is used to support culture, sports, social integration, health care and civic initiatives. This model makes the lottery not just an entertainment with controlled risks, but a financial instrument of solidarity, where each ticket is a contribution to projects that improve the quality of life.
1) The principle of "public benefit": why it is necessary
Social contract. The lottery receives public legitimacy when the return to society is noticeable: grants from NGOs, support for vulnerable groups, the development of mass sports and cultural programs.
Diversification of beneficiaries. The funds are distributed to cover different areas - from local initiatives to national projects.
Declining social polarization. Funding targeted programs mitigates inequities in access to sports, culture, rehabilitation and education.
2) Sources of funds and basic allocation logic
Where does the money come from. The target share is formed from the income of lottery products (circulation games, instant lots/scratchcards) minus the prize pool and operating expenses.
How are distributed. Through the approved regulations: priority areas, quotas and the procedure for selecting applications are determined.
Balance "large - small" grants. Part of the budget goes to system programs (national funds/infrastructure), part - to micro-grants for local NGOs.
3) Areas of support (matrix of priorities)
Health care and rehabilitation. Support for help centers, preventive programs, psychosocial services.
Social integration. Inclusion of people with disabilities, assistance to the elderly, migrants, youth at risk.
Culture and heritage. Festivals, museum initiatives, educational cultural projects, preservation of local heritage.
Mass sports and youth sections. Inventory, coaching rates, participation in competitions, sports for all programs.
Education and volunteering. Grants for educational campaigns, interest clubs, volunteer networks.
4) How the grant process (application life cycle) works
1. Priority declaration and submission window. Criteria, terms, checklist of documents are published.
2. Acceptance of applications. NGOs, municipal structures and initiative groups submit projects with a budget and KPI.
3. Assessment and compliance. Check legal status, governance, past reporting and budget realism.
4. Decision and funding agreement. Goals, payment schedule, checkpoints are prescribed.
5. Monitoring and reporting. Interim reports, site visits, final impact assessment.
6. Public communication. The results of supported projects are in annual reviews and media materials.
5) Transparency and accountability
Annual reports. Aggregate data on the distribution of funds by areas and types of grants are published.
Audit and internal control. Separation of functions between selection, financing and monitoring, internal/external audit.
Conflict of interest. Declarations of commission members, ban on voting with affiliation.
Open criteria. Scoring scales (social significance, sustainability, co-financing, coverage of beneficiaries).
6) Impact measurement: KPI without "paper load"
Coverage and availability. Number of beneficiaries, proportion of vulnerable groups, geography (city/province).
Quality and sustainability. Share of projects that continued to work a year after the grant; availability of partners and co-financing.
Social outcome. Change in participation rates in sports/culture, recipient satisfaction (surveys).
Spending efficiency. The ratio of administrative and program costs for grantees.
7) Format cases (schematic)
Social mini-grant for NGOs. 10-20 thousand conventional units for the launch of mutual assistance groups with quarterly reports and a photo-evidence base.
Infrastructure support. A large grant to the municipality for the repair of the sports ground with the requirement of free hours for children and the elderly.
Cultural festival. Co-financing with a commitment to inclusivity (sign language translation, accessible environment, quotas for schoolchildren).
8) Risk management and ethics
Cutting off "window" projects. Priority is given to initiatives with a real benefit, and not only with a media effect.
Anti-duplication. Check for interference with already funded programs; coordination with ministries and foundations.
Bad faith threshold. Blacklist for grant violators; the ability to claim refunds for abuse.
RG-bundle. Communication about charity should not stimulate excessive play: the emphasis is on "public benefit," and not on "play - you will save the world."
9) Digitalization and service for applicants
Online office of NGOs. Submission of applications, deadline calendar, budget templates, basic KPI calculators.
Transparent tracking. Review status, list of typical errors, chat support.
Knowledge base. Cases of successful projects, video guides, checklists for reporting without unnecessary bureaucracy.
10) Interaction with society
Public ceremonies and public reports. Increase the credibility and visibility of supported initiatives.
Business and media partnerships. Co-financing and information support scale the effect.
Citizen feedback. Online form for proposals on priorities and complaints about the quality of project implementation.
11) Constraints and bottlenecks
Limited overall budget. Small country size = final allocation amount; you need to choose priorities.
Risk of "urban bias." It is required to ensure that funds reach small communes.
Assessment of intangible effects. In culture and social integration, results are often long-term and "soft" - it is important not to overload NGOs with reports.
12) Scenarios to 2030
Status Quo+. Preservation of priorities, easy digitalization of the grant process, stable reporting.
Social accelerator. Increase in the share of funds for inclusive and preventive programs (health, youth, psychological support).
Innovation and sustainability. Pilots "match-funding" (joint financing with business), "impact-bonuses" for projects that have proven a long-term effect.
13) FAQ (short)
Who can apply? NGOs, municipal institutions, partnerships of civil initiatives with a legal entity.
Do you need a cophinance? Desirable - increases stability; the proportion is specified in the criteria.
Can operating expenses be funded? Yes, if they are directly related to the implementation of the project and reasonably justified.
How is success measured? Through pre-agreed KPIs and final report with qualitative/quantitative metrics.
Bottom line. The Luxembourg National Lottery is an institution of public solidarity: behind the entertainment shell are clear rules for the distribution of funds, transparent reporting and measurable social impact. The "public benefit" model works when there are priorities, control and respect for beneficiaries. By maintaining a neat scale and strengthening digital services, the lottery can continue to be a reliable donor for those who make the country more inclusive, healthy and culturally rich.