The relationship between charities and the British state has been significantly transformed in the past 15 years. There is a gulf between the public’s perception of what is charitable - a traditional view still dominated by visions of self-sacrificing volunteers and jumble sales - and the third sector’s view of itself as a more caring, semi-professional wing of the state. The public can be forgiven for being confused about a ‘voluntary sector’ that, according to a 2009 report for the National Council for Voluntary Organisations (NCVO), employs more than 600,000 people. The public might equally be puzzled by the plethora of ‘non-governmental’ organisations which require an Office of the Third Sector to preside over them.
Between 1997 and 2005, the combined income of Britain’s charities nearly doubled, from £19.8 billion to £37.9 billion, with the biggest growth coming in grants and contracts from government departments. According to the Centre for Policy Studies, state funding rose by 38 per cent in the first years of the twenty-first century while private donations rose by just seven per cent.
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. Traditionally, lobbying activity could not be a charity’s ‘dominant’ activity, but could only be ‘incidental or ancillary’ to its charitable purpose. In 2002, however, a report from the Prime Minister’s Strategy Unit called for charities to increase their lobbying activity and for the Charity Commission guidelines to be made ‘less cautionary’: ‘Charities perform a valuable role in campaigning for social change. The guidelines on campaigning should be revised to encourage charities to play this role to the fullest extent.’
The Charity Commission duly revised its guidelines on campaigning two years later, allowing all non-party political campaigning in furtherance of a charity’s goals so long as this activity was not ‘the dominant method by which the organisation will pursue its apparently charitable objects’. A subsequent Cabinet Office report in 2007 called for the rules to be relaxed further still. Accepting that charities had ‘considerable latitude… for political campaigning under existing rules’, the authors expressed concern about the range of legal and regulatory restraints which ‘unjustifiably restricts political campaigning by third-sector organisations’. Stressing the right of charities ‘to undertake campaigns, regardless of any funding relationship with government’, the Cabinet Office argued that organisations whose purpose was wholly political should not be barred from charitable status: ‘Provided that the ultimate purpose remains demonstrably a charitable one, the government can see no objection, legal or other, to a charity pursuing that purpose wholly or mainly through political activities.’
With this advice ringing in its ears, the Charity Commission revised its guidelines again in 2008. Although it fell short of allowing charitable status to those whose activities were entirely political, it relaxed the guidelines to allow charitable status to those for whom political campaigning was the ‘dominant’ activity. The only restrictions fell on charities for whom political campaigning was ‘the continuing and sole activity’ as well as those who were party political. So long as a charity can convince the commission that its lobbying will ‘achieve its charitable purpose’, it can direct all of its resources towards legislative targets, though only ‘for a period’ (the duration of which has never been defined). This is essentially the opposite of US law, where political campaigning must be no more than an ‘insubstantial’ part of a charity’s work. In the UK, an insubstantial amount of non-lobbying activity is enough to secure charitable status.