Government-funded lobbyists

The Institute of Economic Affairs has exposed how much British charities receive from government. NCPA summarises:

• Between 1997 and 2005, the combined income of Britain's charities nearly doubled, from £19.8 billion ($30.85 billion) to £37.9 billion ($59.05 billion).
• The largest portion of this growth came in the form of grants and contracts from government departments.
• According to the Centre for Policy Studies, state funding rose by 38 percent in the first years of the 21st century while private donations rose by just 7 percent.
• About 27,000 charities now receive more than 75 percent of their income from the government.

There is little reason why New Zealand charities, especially those working in the social sphere, would depart from this pattern. think about Barnardos, Salvation Army,  etc and the 2,300 service provider contracts MSD has with NGOs some of whom will also be listed as charities.

The problem with this is

It has been argued that state funding weakens the independence of charities, making them less inclined to criticize government policy. However, this assertion only addresses the surface of the problem. Considered more broadly, this strengthening relationship between government officers and charitable causes threatens to undermine democratic functions themselves.

• A normal activity for charities (which usually have niche interests) is direct lobbying of politicians and indirect lobbying of the public.

• While this is not inherently dangerous (lobbying is not a new phenomenon), the true problem comes from the fact that these lobbying efforts are now paid for by the state; in essence, the government is lobbying itself.

• These relationships with enormous interest groups all-too-often grant public officials substantial influence in the public arena long after they are out of power.

I would add to this that most NZ charities have redistributionist, left-wing philosophies. Just look at a list of lobbyists to the social services select committee. Even churches are now receiving considerable state money through contracts. The social services/activist area is highly incestuous.

The article says, the British government is essentially lobbying itself . Ironically in NZ however, the lobbyists are generally opposing government proposals. Not that government is taking much notice. But it's amusing to think of them funding activists only to disregard their representations.

So what's the solution?

One possible solution to these problems would be for the United Kingdom to adopt the United States' approach, which bars organizations from charitable status if they spend more than an "insubstantial" proportion of their resources on lobbying.
Further, a new classification of non-profit should be created for those organizations that receive substantial assistance from the state to avoid confusion with truly charitable causes.

I am fairly sure neither of these approaches is taken in NZ. According to the Society for the Promotion of Community Standards a review of the Charities Act was due in 2012 but has been deferred to 2015.