Hope Is A Verb - Sigrid van Aken - The Lottery of Progress

Episode Date: September 19, 2024

Meet Sigrid van Aken, the CEO of Postcode Lottery Group, the world's 3rd largest private charity donor, after the Bill & Melinda Gates Foundation & the Wellcome Trust. To date, the organisation has given €13.5 to charities that are driving significant social and environmental change. With over 14 million subscriptions and record turnover of €2.5 billion in 2023, it’s one of the greatest philanthropy stories, you probably haven’t heard about. Find out more: www.postcodelotterygroup.com This podcast is hosted by Angus Hervey and Amy Davoren-Rose from ⁠⁠Fix The News⁠⁠. Audio sweeting by Anthony Badolato at Ai3 – audio and voice.

Hope is a reminder. It's the fuel of your soul. It's so much more infused with action. Ability to see a much better future. You really have to earn it to have it. Hope is happiness. Welcome to Hope is a Verb, a podcast about what it takes to change the world through conversations with the people who are making it happen.

I'm Amy. I'm Amy. I'm Gus. And in each episode, we shine a spotlight on the ordinary heroes who are stitching our social fabric together, mending our planet and creating solutions to some of today's biggest global challenges. In this episode, the lottery where every ticket increases our chance of creating a better world. Our way of giving has always been based on the idea that we are the fundraisers and the charity partners. They know best how to spend the money, especially in these times. They really need this kind of freedom in how to spend the money and to try new things because there are so many challenges but also so many opportunities.

After banking almost 30 conversations on this podcast, one thing that we've heard a lot is the ongoing struggle in raising funds. Once you start to really unpack what it takes to change the world, you realize money and resources are essential tools. That's why we wanted to chat with Sigrid van Aken, the CEO of the Postcode Lottery Group, a revolutionary lottery that started in the Netherlands 35 years ago, in which the players not only have a chance of winning themselves, but where every ticket contributes to social and environmental change. This is the ultimate win-win for people and planet.

The Postcode Lottery Group has donated 13.5 billion euros to charities that are on the front lines of healthcare, education and huge conservation initiatives. Not only have they reimagined the funding model for charities, they're also one of the greatest philanthropy stories that you probably haven't heard about. Sigrid, welcome to the podcast. It's so lovely to have you here. Thank you so much, Amy. I'm delighted to be in your podcast. Well, we're going to ask you a question we ask all our guests. Is there something in the world that is giving you hope right now?

Actually, you are a big source of inspiration. I've been a big fan of you already for a couple of years, and now I've also spread this wonderful news in our teams across Europe. But many things give me hope and in general all the amazing work that our charity partners are doing. And recently I made a trip to Colombia. I've seen the work of our charity partners there and for instance how coffee farmers are dealing with climate change and how they have to adapt of course but it was very inspiring and it gave a lot of hope because they were super resilient and they implemented a lot of solutions to save their crops and also to have

additional sources of income by selling their carbon credits that is just one example and I think more in general there's a lot of progress in the world, and that's often overlooked. I think we as humanity, we are often better off on almost all fronts than ever before. We are richer, healthier, safer, better informed and more prosperous. are always a bit confusing, like when people say 200 years ago, eight out of 10 people lived in extreme poverty, and now it's less than one in 10. This means there has been enormous progress. And also in all these other areas like education or health, there are many challenges in the world and tough global issues that need to be tackled. But there's a lot of resilience, and there's a lot of innovation, and that gives a lot of hope. But there is a lot of resilience and there is a lot of innovation and that gives a lot of hope. Sigrid, in the work that you do, you sit on this intersection of global big picture,

because the Postcode Lottery is a huge organization, and at the same time you're interacting with local communities. Within that really wide scale, how are we doing as a species right now? We learn a lot from our charity partners. And we have almost 500 charity partners that we have long-term relationships with. So they give us their unique perspective of both broad global challenges and specific issues affecting local communities. So that is super interesting and fantastic to be in a position where all these stories are shared with us and with our teams. What we see ourselves is that there is more and more collaboration across all levels, from local grassroots organizations to

international bodies. And that, of course, is a positive development. It's so needed to address all these big, big challenges like climate change, health, social cohesion, welfare, girls' education, animal welfare, poverty alleviation. I mean, this is too big just for organizations to do only their own thing. Sigrid, are you seeing more collaboration than you were, for example, five years ago or 10 years ago? Has something changed? I think collaboration has always been a theme. We have always tried as a big donor to stimulate collaboration amongst charity organizations by inviting them to extra donations where they work together and maybe with new partners. But it's not easy to work organizations together in the

field. I mean, we are not an NGO ourselves. We do not initiate projects in the field, but we see the developments and then we like to stimulate things where organizations work together. But I think, yes, there has been a positive development. And we recently supported WWF and the Red Cross in their strategy of nature-based solutions. cross in their strategy of nature-based solutions. That was their initiative. So we did give them an extra grant to further develop this common approach because of course they're working on the same challenges for people in those local communities. So in this way, they can have more impact together. The postcode lottery, the word lottery is usually associated with gambling and random chance. How are you different to other lotteries?

Well, I think it is also a semantic thing. Indeed, we are a lottery, but in our case, it's really a safe game of chance. Our primary aim is to raise funds for good causes locally and globally. And so we combine the lottery business with our ideals by setting up and running these charity lotteries. And so we basically focus on getting as many players as possible and to keep them playing as long as possible. And in that way, we do the fundraising for charities. Last year, we broke all records, a total amount of almost

1 billion for charities. And so the name postcode lottery has to do with the fact that the postcode, like in the US called the zip code, is your ticket number. So people play the lottery with a ticket based on their postcode. And everyone who lives in that street and was playing wins if that postcode is drawn. So streets, neighborhoods and communities win together. And that's really fantastic because then you see all these communities celebrating and people's lives are getting changed. So in this way, our lottery is about winning together and making the world a better place at the same time, because a part of the ticket price goes to charities and every single player in this way

is contributing to a healthier, fairer and greener world. And so this is how we turn everyone's postcodes into a ticket for good. We call this the power of postcodes. Can you explain how the lottery and the philanthropy components work together? So we bring the excitement of a lottery together with the nice thought of supporting charitable causes. And this creates a kind of a win-win scenario for players, communities, and non-profit organizations. And so a substantial part of the ticket price goes to charities. And so today we have established now postcode lotteries in five European countries. It started in the Netherlands and we started after that in Sweden, in Great Britain, Norway and unrestricted funding and at the same time

create also awareness for the fantastic work that all these organizations whether they're local or international are doing in all those fields it's either culture nature protection or climate health human rights and all these fantastic community projects. So when I first heard about you and what it is that you do, the thing that really stands out for our organization is this idea of trust-based philanthropy. And that was a new idea for us. How does it work? And what is trust-based philanthropy? Our way of giving has always been based on the idea that we are the fundraisers and the charity partners. They know best how to spend the money that they receive thanks to the lottery players. So since the start, we offer flexible, unrestricted long-term funding.

So the relation between the donor and the recipient is based on trust. And we do that today to our hundreds of local and international charity partners. And a trust-based means that we allow the charities to use the money as they see fit to achieve their goals. I think in a time like this, with so many crises, wars, earthquakes, economic dynamics, our charity partners can in this way redirect their priorities and their fundings. And we fully support our charity partners in their strategy in spending the money the way they want it. I think it's important to emphasize that everywhere things go wrong, everywhere where people work, things go wrong. In our company, in governments, in businesses, so also in NGOs.

But the only thing that matters is how do you handle those situations? And especially in a trust-based relationship, we would like to see that our charity partners inform us in advance before something is in the media, for instance. And then we are interested to learn, okay, something went wrong. How do you solve this? What do you learn from this situation? And maybe one thing to add, of course, before we enter into a long-term partnership,

there are some steps to take. Because of course, we want to do due diligence. For instance, our charity partners need to be non-profits. And we like it most when they originate from civil society, that they are private initiatives, not initiatives that are set up by governments. And of course, they all should be active in areas like human rights, nature conservation, climate, social cohesion, culture, health. One thing that is very important before we enter into a partnership is that these organizations

can show to us that they have broad societal support and public appreciation, because it's all about the money of the lottery players. And therefore, we want to see that they have this support in society. And there's a big audience playing the postcode lottery. I mean, in the Dutch context, it's about 40% of the population. In Sweden, it's 20% of the households. And today in Great Britain, it's about 16% already playing. So public support that these charity organizations have is very important. And we work with the assumption that strong communities and charities play a crucial role in creating this healthier, fairer and greener world.

And in our case, it's thanks to our lottery players' contributions that we can support all these initiatives that not only address immediate needs, but also build sustainable, resilient communities for the future. I think it could be really easy to miss just how powerful this whole thing is. Firstly, the idea of trust-based philanthropy completely changes the dynamic of the relationship between funder and charity. And it reminds me a lot of the conversation we had with architect Yasmin Lari last season, who also pioneered a new approach to aid relief. The other layer of this postcode lottery story is how it's set up for neighbours to win together.

And so it creates these shared moments of joy that I'm sure go a long way to mending our social fabric. I think Sigrid's showing us here that there is a wider ecosystem around the people that are trying to change the world. Most of our guests are working on the front lines and I think it's really important to understand all of the different pieces that need to come together to make progress happen. More personally for us at Fix the News, our charity work is something that we want to grow over the next few years and so this conversation really has highlighted that how you give is just as important as why you do it. Even just hearing about how this works, it sort of feels like you sort of stumbled on a secret. It's just such a good idea. Does it feel

like that? Does it feel like you've gotten onto something that you wish more people knew about? Oh, definitely. Definitely. I think international NGOs, of course, know very well what we are doing. We have about 40 international NGOs that we are partnering with and that we give long-term support. And I think the good news is that there are so many opportunities to start a postcode lottery around the world. And there are countless places where civil societies could achieve so much more with additional funding, and it will help making their country a better place. This is such a unique concept. Can you tell us a little about the origin story?

Well, indeed, Amy, it is unique. And it started in the Netherlands. And there were four founders of the Dutch Postcode Lottery. And before they started the lottery, they themselves had worked in the fields of fundraising for charities already, and also in direct marketing. And so these experiences led to the invention of a lottery format that not only focused on the fundraising, but also on this winning together principle. And at the time in 1989 in the Netherlands, it was when the postcode system was newly introduced in the country. And so that was also, of course, the whole context of this postcode invention. And the whole idea of this lottery was disruptive and really a game changer at the time.

Reinventing how lotteries work by this ticket number of your postcode and not only letting people win for themselves but also together with their neighbours. And I think also that is remarkable that 35 years at the start of our organisation, unrestricted long-term funding has been our funding philosophy. This is really different to traditional philanthropy. What are the benefits of this approach? It's interesting to see that there's actually more and more academic research that demonstrates that this way of funding is making a very positive impact. I think that is really in line with what we have seen. But this research shows that it makes initiatives financially stronger because the funds that they receive can serve as a catalyst to get

other donations from other donors. It also allows nonprofits some time and a long-term view on their programs and how to improve them. And in that way, they can really address complex social issues because they can have this long-term approach. It also, of course, enables them to reallocate money in response to changing needs. So many donors are giving restricted funding for specific projects in specific contexts. And we all know society, the dynamics in society are enormous. And of course, you never know exactly how things will

develop. And then last but not never know exactly how things will develop. And then last but not least, it's proof that it encourages innovation because you have some money that you can spend on experiments and testing new ways or new solutions. So in that sense, it also supports investment in research. And all this is exactly what we envision also with our funding philosophy. But it's great, of course, that now this academic research is really showing that it works. It's interesting hearing you talk about it. The parallels with the basic income movement

seem pretty obvious. Yeah, it's true. It's so true. But I think the trust part is, well, the most interesting part, of course, what is trust and how do you handle this trust-based relationship? And it's something that makes us all uncomfortable. I think that's why donors don't like this trust party. They would like to see in advance some kind of proof that they are spending their money in the right way. But I think we all know, and especially donors that have a business background and that have their money because of a successful business they should know more than anyone else that

you never know exactly how things will turn out and that you need to take risks and that you need this entrepreneurial approach to really make something successful and to make something new can you give us an example of a project like this? One we read about was an AIDS fund project in Eswatini. Yes, yes. I like this one because we also have one special category that we call the Dream Fund. And with this special category, we like to promote and encourage this entrepreneurial approach.

So we invite our existing long-term partners to come up with applications for extra grants. And so this example was a donation of almost 11 million of the postcode lottery for an experiment in East Fatini. It's this small country in the South of Africa, formerly called Swaziland. And in that country, nearly one in three people were living with HIV. And so the AIDS Fund, a Dutch NGO, and the Clinton Health Access Initiative, that was their initiative, has really been a game changer. Because before, the health system only gave HIV treatment when symptoms would appear. And so the goal of this experiment was to test all of the esphartini

and provide immediate treatment if needed. And in this way, they wanted to prove that new AIDS infections could be reduced. And so this was a high-risk kind of experiment. And then what I think is so striking that the grant of only 11 million, What I think is so striking that the grant of only 11 million, let's put this in perspective of all the investments and helping people with AIDS, 11 million is not that much. But because it was such a high risk, it was only the lottery that would provide to this grant. And so this innovative project has really played a key role in reducing new HIV infections in the kingdom of East Hortini, because during the project run, and it was about seven years between 2011 and 2018, new infections in the country were nearly halved. And the number of people receiving treatment has doubled. And this is really

because of the unique collaboration among, of course, international scientists and organizations and local governments and existing health care providers and people with HIV and A. Svetlana, that it was so successful that it has been converted into national policy. And still today, and that's also striking, this country is one of the front runners in AIDS prevention. I think this is just one example in the approach of giving money without knowing the exact outcome. It could have been a complete failure, of course. And I think the donors, as I just said, should realize that like in any business to stay successful and have a positive impact. Also NGOs, especially NGOs, should be able to try new things and new approaches and they should be able to take risks. I think this really shows that if you give a grant like this, you encourage all these wonderful organizations to think big and invest in new things. Yeah, that story really does highlight how incredibly expansive a trust-based relationship

is in this space. And if that risk pays off, that can potentially change millions of lives. I think that's what makes our role also so special because we have now over 35 years of experience in trust-based philanthropy, and we have given away the total amount of 13.5 billion euros in this way. So I think we are in a position to have a strong opinion on this. And also we should encourage other donors to follow this example

because we hear so often from charity partners that this type of financing is lacking. And especially in these times, they really need this kind of freedom in how to spend the money and to try new things because there are so many challenges, but also so many opportunities. This idea of a postcode lottery, do you think it's something that is culturally specific that maybe it's only something that's going to work in Northern Europe and maybe there's a cultural reason that people do it there because they're

a high trust-based society and is it something that you think can be replicated in other places? Well, I think we have already proved that it can be replicated. I mean, of course, we are now active in five European countries, but also within Europe, there are cultural differences, of course. And yes, I'm convinced this can work everywhere in the world. And I'm really excited to make this happen with our team because the civil society, I think think worldwide is based on the same idea that people just want to contribute to make their place a better place and to strengthen their

local communities and so this is what we are all about to have a good time and to play together in your lottery and I think dreaming about winning a nice prize that change your lives that's also something very common across cultures. Lotteries have existed for centuries. This is a very common idea that with a lottery, some people might win a big prize, but you can raise a lot of funding that exists already around the world. But to implement this way of community winning and at the same time strengthening communities, I'm sure that civil society organizations around the world will embrace this and people will love it.

So yes, we are ready to make this happen in other places than just Europe. And we are also working with civil society organizations in North America, also specifically in Canada, to start over there. I want to change direction slightly. What does the word hope mean to you? I think it's exactly what I like so much about your work, because you share all these amazing stories about many good developments. And I like it that you say also you want to show how progress actually happens. And this is important because there is a lot that is threatening

the way we live on this planet. And in many places, people are suffering and have to deal with wars and human rights violations and so on. And so the things that are horrific and that are present all over the news and in the media, I think we all need these stories

and examples of progress to be inspired and to be able also to put things in a balanced perspective. So when I speak of hope, I have in mind these strong words of Vaclav Havel, the unbreakable dissident who eventually became the president of Czechoslovakia. And he said, hope is not the same as optimism. It's not a conviction that something will turn out well, optimism. It's not a conviction that something will turn out well, but it's the certainty that something makes sense, regardless of how it turns out. And I think this is what I see so many times in my work. There's progress everywhere. And so many people are devoting their lives to issues they just care about. And this can also be something very small and positive that you

might do for your friends, your neighbor, or even a colleague. And that is what inspires me and also the work that charities, I mean, charities are doing much more than providing aids or solutions. They are really drivers of change. They strengthen social cohesion in our society. So all these things give me a lot of hope. Your organization, Postcode Lottery, is in the business, I guess, of hope. Quite literally, you're a private company. Isn't it quite strange to associate a private business with the word hope? I like the way you say it. We are in a business of hope.

I will reuse that. But indeed, we are a private company. And maybe good to mention, we are a social enterprise. So this means that we have no private shareholders. Well, it's a private foundation. So that means that we reinvest all profits in our organization to make a positive impact. So it means that we set up new lotteries and we invest in innovation and technology to make our lotteries even more successful with just that one objective,

to increase the number of players and in this way increase also the amount that we raise for charities year on year. So to answer your question, well, there are many examples, I think, where businesses choose to contribute to social change. This whole idea of social enterprises is widely spread internationally. And we also partner with many of them because they also produce, for instance, sustainable products and they offer jobs to people who are disadvantaged in the labor market. All this type of businesses have a positive impact in society and their ways. In that sense, the business sector can have a positive impact as well on society.

If people want to find out more about you or they want to start their own postcard lottery, where do they start and how does this work? Well, let me take the opportunity for a call to action for everyone listening, particularly those working in governments in countries without a postcard lottery. Because of course, we do need a lottery license. And so people could advocate for their governments to make it happen and to grant licenses for charity lotteries. Our website gives a lot of information and there is also information about my colleagues that can be reached.

We are always excited to hear about people who are interested to get a postcode lottery to their country. Sigrid, I'd love to know what has been your biggest lesson? Well, there is always a lot to learn but i think in the end it all comes back to people and the idea that everybody can make a difference and i've seen this at many of our charity partners it's incredible i know so many people individuals that have initiated in their organizations wonderful things. And there are everywhere people with innovative ideas and that are truly committed to make it happen and won't

stop until it has been realized. And this is what I like also in our own organization. We have a very strong company culture and I've experienced that in that way we can achieve wonderful results, no matter what difficulties we have to overcome to make it happen. And I've been witnessing a part of fantastic moments where people were winning together and we were bringing whole neighborhoods together. And these amounts of money that they win in the lottery do a lot in their lives and can also change lives for the better. So this is just a moment of joy where I think that we really do something that matters for society.

This idea of winning together isn't just some kind of idealistic goal. I think it's a tangible blueprint for creating solutions where more people and more species reap the benefits together. And although these solutions are never going to be easy and will definitely take a lot more work, with some collaboration and a little bit more trust, we have a chance of getting there. If you want to find out more about the Postcode Lottery Group, you can go to their website, postcodelotterygroup.com and you'll find all the details in our podcast notes. We'd like to thank our paying subscribers for making projects like this podcast possible. If you're interested in finding out more about our work, check out

fixthenews.com. There are a lot of podcasts out there. It means a lot to us that you chose this one. This podcast is recorded in Australia on the lands of the Gadigal and the Wurundjeri and Woiwurrung people. If you enjoyed this conversation and would like to support Hope as a Verb, make sure you subscribe and leave a review. Thanks for listening.