4.1 Nonprofits and the state

At a glance

About 40 minutes, including a 15-minute reading. By the end of this lesson you will be able to

• describe complementary, supplementary and adversarial relations between nonprofits and government

• explain how governments can enable or restrict civil society

• recognize signs of closing civic space

One NGO may deliver a government-funded service, fill a gap the state leaves open and challenge another government policy. To understand that relationship, we must resist assigning either side a single role and instead follow what each is doing in a particular issue and moment.

What each side can do

Civil society can monitor and lobby governments, expose corruption and poor governance, represent its members' interests and give members organizational experience. The state, in turn, can act on input from civil society. It can also monitor organizations, restrict them through registration requirements, or ban them outright.

Three kinds of relationship

Figure. Complementary, supplementary and adversarial are relationship types, not permanent labels for an organization or country. One NGO may occupy more than one position.

Dennis Young describes three kinds of relationship. In a complementary relationship, government funds nonprofits to deliver services it has decided on, regulation is enabling, and nonprofits have formal consultative channels and broad access to policymakers. Salamon's interdependence theory from Lesson 1.3 describes this pattern. In a supplementary relationship, nonprofits fill gaps, often serving minorities, rely on private philanthropy and fees, face regulation focused on enforcement and have informal access. In an adversarial relationship, nonprofits express values and advocate, rely on private funds, face restrictive regulation and have limited access, so they often work indirectly. Most countries show all three at once, in different fields.

Closing civic space

Partnership and conflict can coexist in an open civic environment. A more serious problem arises when regulation changes the conditions under which independent action is possible.

Since the early 2000s, researchers have documented governments tightening control over civil society, a trend called closing or shrinking civic space. Registration, financial reporting and anti-fraud rules can serve legitimate public purposes. Warning signs appear when requirements are disproportionate, selectively enforced, difficult to appeal or used mainly against critical organizations. India's foreign-funding rules, introduced in Lesson 3.1, show why the wording of a law and its application both matter.

Authoritarian regimes, whether personalist, party-based, monarchic or military, tend to restrict advocacy groups while tolerating or supporting loyal service providers. China's landscape includes business associations, party-organized and government-organized NGOs, churches, social enterprises, grassroots groups and international NGOs. Environmental NGOs, seen by the government as less threatening, have used legal, administrative and media advocacy. A 2016 Charity Law for domestic organizations and a law on overseas NGOs that took effect in 2017 reshaped the rules for both.

Example. Tracking civic space with V-Dem

The V-Dem project publishes annual estimates of civil-society conditions. Its core civil society index runs from 0 to 1, with higher estimates indicating a more robust and autonomous civil society. The country graph tool can plot a clearly stated period, such as 2005–2025. Changes should be treated as evidence to investigate alongside elections, coups, laws and local reporting, rather than as proof of a single cause. Part 7b of the project template asks you to make this comparison for your organization's country.

Read

Carothers, T., & Brechenmacher, S. (2014). Closing space. Democracy and human rights support under fire. Carnegie Endowment for International Peace. https://carnegieendowment.org/research/2014/02/closing-space-democracy-and-human-rights-support-under-fire

The report is free to read. Read the summary and introduction. Which of the methods governments use do you recognize in a country you know?

Explore. V-Dem country graph tool, https://v-dem.net/data_analysis/CountryGraph/, and the CIVICUS Monitor, https://monitor.civicus.org/

Try it

Separate ordinary variation in nonprofit-state roles from restrictions on civic space. For each case, decide whether the relationship is complementary, supplementary or adversarial, or whether it may be limiting independent action. Then open the answers.

1. A government contracts NGOs to run its national school meals program.

2. A faith-based charity runs shelters for undocumented migrants, funded by private donations.

3. An environmental group takes the government to court over a dam project.

4. A new law requires NGOs to receive foreign funds through one designated bank and caps their spending on administration.

Key takeaway

A nonprofit and a government can cooperate, fill different gaps and challenge one another at the same time. The key distinction is between legitimate oversight within that relationship and restrictions that prevent civil society from organizing or speaking independently.