CHARITIES-TOO CLOSE TO GOVERNMENT?

Charities-How the government lobbies itself and why

Charities are not always what they at first seem

Comment

Christopher Snowdon, of the IEA, said  last week, in a new report, Sock Puppets: How the government lobbies itself and why that ‘ It’s time for a radical overhaul of state-funded charities.’

The report claims that in the last 15 years, state funding of charities in Britain has increased significantly. 27,000 charities are now dependent on the government for more than 75 per cent of their income and the ‘voluntary sector’ receives more money from the state than it receives in voluntary donations.

State funding weakens the independence of charities, making them less inclined to criticise government policy. This can create a ‘sock puppet’ version of civil society giving the illusion of grassroots support for new legislation. These state-funded activists engage in direct lobbying (of politicians) and indirect lobbying (of the public) using taxpayers’ money, thereby blurring the distinction between public and private action.

This surge in government spending coincided with a politicisation of the third sector which was actively encouraged by the state apparatus from the Prime Minister down.  The report reveals the true extent of government funded lobbying by charities and pressure groups.  Snowdon argues that, when government funds the lobbying of itself, it is subverting democracy and debasing the concept of charity. It is also an unnecessary and wasteful use of taxpayers’ money.  And by skewing the public debate and political process in this way, genuine civil society is being cold-shouldered.

In 2007 the think tank Civitas raised similar concerns  in its report Who Cares? It said  that Charities that derive over 70 per cent of their income from the state have reached a level of dependency which makes them more part of the state than civil society and they should lose their charitable status in order to preserve the integrity of the sector. In a section of the report entitled ‘Paying You To Tell Us What We Think’, the author, Nick Seddon describes the use by government departments of government-funded charities to carry out research that supports government policy. Seddon believed that ‘As the government funds charities, and even turns statutory bodies into charities, the lines are becoming blurred. These charities come to resemble more and more the statutory departments on which they depend for money, whilst also competing with genuinely independent charities for donations, and creating confusion about what a charity is.’

The IEA report adds that State-funded charities and NGOs usually campaign for causes which do not enjoy widespread support amongst the general public (e.g. foreign aid, temperance, identity politics). They  typically lobby for bigger government, higher taxes, greater regulation and the creation of new agencies to oversee and enforce new laws. In many cases, they call for increased funding for themselves and their associated departments.The report concludes that ‘urgent action should be taken, including banning government departments from using taxpayer’s money to engage in advertising campaigns, the abolition of unrestricted grants to charities and the creation of a new category of non-profit organisation, for organisations which receive substantial funds from statutory sources.

Action should be taken so that:

• Government funding of a charity or other non-profit organisation is not used to promote the organisations’ interests in the policy sphere. Campaigning and education around such interests should be entirely privately financed.

• The government is not financing charities in such a way that there are people working  within that charity whose interests might be strongly aligned with the continuation of    government funding and who have an ability or incentive to campaign in favour of more    government funding.

• Politicians and bureaucrats who wish to pursue unpopular – or even popular – political causes should not be able to do so by setting up a charitable or NGO-front that gives the veneer of independence.

One possible solution to the problems outlined in this paper, says Snowdon ‘ would be for the UK to adopt the US approach which bars organisations from charitable status if they spend more than an ‘insubstantial’ proportion of their resources on lobbying’.

It is true that a number of ‘Charities’ look as though they are nothing of the sort and exploit their status. The clear danger is that bona fide charities, and the sector as a whole, are damaged by the activities by these organisations, some of whom have not only been tolerated by the government but have been actively  encouraged .It is also the case that as more transparency is forced on the government and its executive agencies, charities working for the government are not subject to the same levels of transparency and accountability. Charities   do not come under the  Freedom of Information Act and some statutory bodies have Charitable status. The British Council,  though not a statutory body is a quango that    promotes  British culture  abroad and purports to represent UK education interests abroad (a pigs ear for some reason   springs immediately to mind! ) ,is heavily funded by both the FCO, and DfID , and is a registered charity, yet competes aggressively  in the markets against  British education companies. .  The waters  are, indeed, muddied.

The temptation for Charities to pitch for government contracts is strong .But  there is a danger that in doing so they lose sight of their core purpose and mission, all in pursuit of  much needed new income streams.

It is obviously the duty of Trustees to ensure the respective charity remains focused on its raison d’ etre and can demonstrate public benefit   And for the regulator to keep a  close eye on this.   There is little doubt, though, that some are guilty of mission creep. And charities that do not merit their status serve to crowd out genuine charities.

Sock Puppets: How the government lobbies itself and why, by Christopher Snowdon IEA

http://www.iea.org.uk/sites/default/files/publications/files/Sock%20Puppets.pdf

http://www.civitas.org.uk/press/prcs56.php

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