Kerry Lorimer examines the impact of the Big Lottery Fund on Scotland's voluntary sector
“Nothing defines humans better than their willingness to do irrational things in the pursuit of phenomenally unlikely payoffs.”
That, according, to Dilbert creator Scott Adams, is the principle behind love, religion and, most crucially, lotteries – which is why millions fork out for National Lottery tickets in the hope that one day the golden hand will be pointing at them.
Regardless of the odds, however, there is a guaranteed winner: the thousands of worthy causes across Scotland that benefit from the Big Lottery Fund (BIG), the UK’s largest lottery distributor.
Weekly draws and scratch cards add up to big business. For every pound spent on the lottery, 28p goes to good causes, of which 14p goes to BIG and the remainder to art, sport and heritage. Those 14ps add up to a mighty budget of £600m across the UK, of which around £65m goes to Scotland. As a result, BIG hands out a million pounds every week to projects across Scotland.
But the fund is not just a cash machine: it is an agent of social change. That, at least, has been the aspiration of director Dharmendra Kanani, who for the last four years has overseen a transformation in both the fund’s ethos and way of working.
Underpinning that change has been a fundamental shift in focus. While the fund used to pore over the internal processes of the bodies that applied to it for funding, it now concentrates on what those organisations will achieve on the ground. In that sense, Kanani can claim to have been onto outcomes when they were still a twinkle in John Swinney’s eye.
“We decided we would stop meddling in organisations, and ask them what they wanted to achieve and when they would know when they got there,” says Kanani.
Social change is the common thread that runs through Kanani’s impressive CV. Having chaired a number of voluntary organisations in Scotland and London, he became head of the Commission for Racial Equality Scotland and then Director of Countries, Regions and Communities for the commission in London.
His background in the voluntary and community sector gave him first-hand experience of the funding game with all its frustrations and eccentricities from the other side of the fence. So when he took on the top job at BIG, he set about changing the rules of the game.
Firstly, he shifted the starting point from the funder’s perspective – “we’ll have a programme on health, or a programme on play” – to reflect the more complex way voluntary and community groups operate in the real world.
Secondly, he changed the funding mechanism to reflect the long-term nature of the challenges many projects are tackling. “Some of the problems people are solving are longstanding,” he says. “They are a product of structural problems, things that have gone wrong in the system, so why would we expect organisations to turn those round
within 12 months or two years? That’s barmy.”
The third priority was to tackle red tape. “The lottery, historically, had a bad name in terms of being bureaucratic,” he says. So he introduced a ‘single front door’ through which all funding can be accessed, and a single application form for bodies to complete. That may sound obvious now but, Kanani says, in the labyrinthine world of lottery funding, this was innovative stuff.
Another innovation was the Investing in Ideas fund, which offers grants of £500-£10,000 to test ideas that could become fully-fledged projects. In the past, a bidder could secure a substantial sum of lottery funding for a project that might fail a year later. Kanani wondered whether there could be another way. “Why don’t we give money to organisations to test their thinking, consult people, and find out whether it’s going to work?” he said. “It is an opportunity to make the idea better.”
 Thanks to those changes, Kanani believes the fund is in much better shape to help people solve the problems that exist on their own doorstep. “When they are given the opportunity to set out what they want to do, and we are proactive and responsive with money and support, real magic happens,” he says.
The Big Lottery Fund was born from the merger in 2004 of three separate distributors – the Community Fund, the New Opportunities Fund and the Millennium Commission. At the same time, it gained the power to make loans, create endowments and distribute non-lottery funding, making it, in Kanani’s words, “quite an eclectic beast”.
Ever since the lottery began, critics have accused the Government of using the lottery as a piggy bank for pet projects. The outcry has intensified over the last year with the diversion of an additional £675m in lottery funding to shore up the 2012 London Olympics. The Scottish Government claims that the move could cost good causes in Scotland £150m in lottery funding.
Kanani is reluctant to comment on that figure, pointing out that because any diversion would be split between distributors, the picture could be more complex. “What we do know is that it will impact on our ability to spend as much in the years 2009-12,” he says.
The lottery as a whole has made a “substantial” contribution to the Olympic Games, he says – £1bn, of which £630m comes from the Big Lottery Fund. “But the discussion on that is over, and we’ve got the best deal we can,” he says. “It could have been much higher, but people understood the impact that would have had.”
Across Scotland, Kanani points out, over £100m in lottery funding has already been invested in sports infrastructure, community sport and programmes using sport as a mechanism for wider social benefits.
“In the clamour to think about the 2014 Games, you can very easily lose sight of the depth of the investment that has already been made by the lottery itself,” he says. “My caution would be, let’s take an evidence-based approach to investment in the Games as opposed to advocating a blanket approach.”
That means taking a “long, hard look” at what’s already been invested and what has actually worked. The real social dividend, he believes, will come from learning from what has already been achieved by others. “Otherwise, we will sleepwalk into an investment that won’t deliver the outcomes we all desperately want.”
Next month, to mark the anniversary of Glasgow winning the Games, the fund will launch a 2014 Communities Fund under which grants of up to £1,000 will be available at a local level to help secure a legacy for the Games. Initially set at £500,000, the fund will multiply in subsequent years up to 2014. The idea is to allow the legacy to take root as soon as possible, instead of leaving it until after the Games. “For me, the lesson from across the globe and the UK is that you need to think about it now,” says Kanani.
The fundamental question is how the lottery fits into the wider picture of funding across Scotland. Kanani vehemently denies that the lottery is picking up the tab for projects that should have been funded through general taxation. “I can’t think of anything that would be funded alternatively by the public sector,” he says.
“We’re really clear as lottery distributor our clear cut is where we can add value. The past view was that it funded things that had no policy resonance or environmental context. We are working in partnership with government, taking account of where they are going in terms of policy and responding to that. There is a real resonance between what we do and what government does.”
That desire to “add value” while continuing to tap into the policy zeitgeist has led to the creation of four themes against which the funding is allocated. Inevitably, these read like a game of buzzword bingo, but are designed to target funding at the areas where it can have greatest impact.
The first, ‘life transitions’, supports the major changes in people’s lives – for example, the journey from school to employment or prison to rehabilitation – that might fall between the cracks of traditional funding. Kanani says this stream created “an immediate policy buzz”. “It really hit a nerve out there where people were scrabbling round thinking, ‘we don’t have money for this kind of activity’,” he says.
The second, ‘growing community assets’, helps local people acquire an asset, be it an island or a bank at risk of closing down, that would help the community become more sustainable. Kanani talks passionately about a woodland he visited near Inverness that had been acquired for community ownership. “It was amazing to see and understand both the ecological things that happened to…save that woodland and the things they did in terms of access for disabled people and play areas to [ensure] those who are furthest away from access to that kind of space were brought into the heart of it,” he says. “It was wonderful. I thought to myself, this has to be possible across Scotland.”
The third, ‘supporting 21st century life’, is aimed at addressing the impact of societal change on people’s lives. For example, technological advances might leave people isolated or excluded. “We wanted to enable people to look ahead, make better connections with each other and respond to the pace of change in their lives,” he says.
The final strand, ‘dynamic and inclusive communities’ is designed to invest in the infrastructure of the voluntary
sector, to make it more coherent and proactive and to support civic action. But before any agency is awarded funding to build its capacity, it has to show it is working effectively with its colleagues in the sector. “Part of the deal has to be they speak to other networks,” he says. “Working in splendid isolation won’t do
Working in splendid isolation won’t do 
.”
So far, the changes have gone down well with the voluntary and community sector. Martin Sime, chief executive of the Scottish Council for Voluntary Organisations, says BIG has been successful in tuning into the needs of a diverse sector, not least by establishing the general themes under which organisations can pitch their ambitions. “The programmatic approach didn’t work,” he says.
Sime is keen to ensure the themes remain as broad as possible to allow people to develop imaginative solutions to local problems. He is also concerned about the long-term sustainability of programmes that are funded up-front. “When the money goes out of something, who will fund it?” says Sime.
That will be just one of the knotty problems for BIG to address: if it cracks it, the real jackpot will be a legacy of positive and lasting social change.
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