Lottery shortchanges charity

By Todd Cohen

In peddling a state lottery, North Carolina Gov. Mike Easley and legislative leaders claimed it would raise money for schools without raising taxes.

But a lottery promises poor social returns.

Socially responsible companies use a “triple bottom line” that values their financial, social and environmental impact.

And research shows greater loyalty by customers, investors and employees to corporations that are socially responsible.

But consider GTECH, the industry giant that wants North Carolina’s lottery business.

Its charitable giving totaled $690,000 in fiscal 2004, a paltry 0.2 percent of pre-tax profits of $306.4 million.

Compare that to median giving of 1.3 percent of pre-tax profits among 71 much larger firms surveyed by the Committee to Encourage Corporate Philanthropy.

GTECH, in other words, donated $130 to charity per employee in 2004, compared to a median contribution of $633 per employee at surveyed firms.

And GTECH employees on average volunteered less than 25 minutes in 2004, compared to a median of just over an hour in paid volunteer time among employees at service firms that were surveyed.

Poor people pay for lotteries, lottery firms get rich, and lottery states get little charitable return.

In approving a lottery, North Carolina lawmakers made a bad bet.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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