The IEA has often pointed to the unhealthy symbiosis that has grown up in recent years between government and NGOs. These ‘non-governmental organisations’ – usually called charities in the UK - get more and more of their funding from government and in return are increasingly engaged in lobbying government to achieve certain policy goals.
If anything the relationship is even deeper at the EU level. A new study, Helping Themselves, estimates that the EU spends €7.5bn a year on NGOs. The authors argue that the expenditure not only ignores public priorities, but damages the European economy and actually harms charities themselves by skewing their work to the objectives of the EU rather than their own voluntary supporters.
Sifting through the opaque jungle of EU statistics, the research shows that the money disproportionately goes to big Western European NGOs who are adept at lobbying the Brussels bureaucracy. Not only that, the programmes they fund deviate wildly from citizens’ priorities, as well as from the very purposes and functions of the EU itself.
For example, some of biggest recipients of EU funds campaign energetically against free trade and in favour of higher EU taxes and spending, protectionism, regulation and nationalisation – not exactly what we expect from the single market. And it is perhaps no surprise that major aid charities campaigned for the EU’s Financial Transactions Tax when they stand to benefit directly from its proceeds.
In the end, such a close relationship between government and NGOs harms both sides. In particular, charities that receive government money start to lose their independence. They need to sing for their supper by offering government programmes legitimacy, and they end up undertaking projects because they will secure grants rather than because they are worthwhile in themselves.
Helping Themselves suggests six ways to reform the relationship between the EU and NGOs:
- EU spending on NGOs should reflect the public’s priorities.
- NGOs should be discouraged from making repeat funding applications to the EU.
- They should not receive more than 40 per cent of their income from government (some charities receive as much as 75 per cent from state sources)
- Projects funding NGOs should follow the same procurement rules used for buying other services.
- Contracts should not be awarded to organisations with politicians or officials in senior positions.
- EU funds spent by member states should be reported in the same way as those distributed directly by the EU.
A free society must include strong voluntary associations, some of which act as conduits for the philanthropy of citizens. But for government to fund this aspect of civil society is counterproductive – the whole point of charities is that they are distinct from government programmes. Those NGOs that want to bid for government contracts should set themselves up as ordinary businesses, to be judged by their results.
Tom Miers is Director of New Direction, a Brussels-based think tank.