How NGOs Are Using Taxpayer Money To Bypass Democracy

Restoring the independence of civil society requires a firm separation between the state and its supposed watchdogs. Taxpayer money must never be used to finance lobbying.

Non-Governmental Organisations (NGOs) are meant to be a vital part of civil society. They fill gaps that the state cannot or should not fill, providing services, advocacy, and social innovation. Their strength lies in their independence. The very term “non-governmental” implies separation from state control and funding.

Yet in South Africa that independence is being steadily eroded. Many NGOs now receive taxpayer money, either through government departments or through the National Lotteries Commission, while at the same time lobbying government to adopt their preferred policies. When unelected activists use public funds to influence elected officials, the line between civil society and the state begins to blur. This process can be called NGO displacement: when NGOs funded by taxpayers start to perform roles that belong to government itself.

When independence turns into influence

It is understandable that some NGOs receive state support for delivering social services that government cannot provide efficiently. Problems arise when the same NGOs use that funding to promote ideological causes or lobby for new laws. This creates a conflict of interest. Taxpayers are, in effect, paying for one side of a political argument to dominate the policy arena.

An independent civil society should hold government to account, not work as its partner in advancing a political agenda. When state-funded NGOs shape policy, democracy weakens because the people’s representatives are displaced by unelected organisations.

The Tobacco Bill

The Tobacco Products and Electronic Delivery Systems Control Bill illustrates this problem clearly. The National Council Against Smoking (NCAS) receives more than R1.1 million yearly from the Department of Health to run a government-endorsed quit line for smokers – it doesn’t work. It also received departmental grants to help draft regulations related to tobacco control.

Despite this public funding, NCAS is one of the loudest advocates for the Tobacco Bill, which seeks to impose sweeping restrictions on tobacco, vapes, and e-cigarettes. The Bill undermines consumer choice and harms harm-reduction strategies that have proven effective elsewhere.

During public consultations, NCAS and other anti-tobacco groups were given preferential treatment. They were allowed more time and influence, while harm-reduction advocates were dismissed. The Campaign for Tobacco-Free Kids (CTFK), a foreign NGO funded by US foundations, was even included as part of the South African government delegation at NEDLAC. No South African voter chose this organisation to represent them, yet it was given access to a process reserved for national stakeholders.

This is not independent advice. It is an example of unelected lobbyists being elevated above democratic institutions.

Gun Free South Africa

The problem extends beyond health policy. Gun Free South Africa (GFSA) receives funding from the National Lotteries Commission, a public body that disburses government funds. GFSA exists primarily to lobby for stricter gun control laws and for the confiscation of privately owned firearms.

Gun buybacks and confiscations, often supported by GFSA, have been linked to police corruption and the leakage of firearms to criminal networks. Even those who do not support private gun ownership should be concerned that a taxpayer-funded NGO is lobbying the government to restrict citizens’ rights. The principle is simple: no one should have to fund their own disempowerment.

Black Sash and the welfare lobby

Another example is Black Sash, which has also received grants from the National Lotteries Commission. It campaigns for the expansion of social grants and for the introduction of a Basic Income Grant. Whatever one’s view on welfare policy, it is inappropriate for an NGO that benefits from state funding to lobby for policies that would increase state expenditure. This is a clear conflict of interest.

Such arrangements allow the government to outsource political advocacy to organisations that align with its ideology, while suppressing dissenting voices that are denied access to similar funding. The result is a distorted civil society, where government-funded NGOs dominate debate and independent voices are sidelined.

Lack of transparency

Many NGOs obscure their funding through proxy donors and vague financial statements. Annual reports are often incomplete, and journalists rarely investigate the financial ties between advocacy groups and the state. This lack of transparency hides how deeply intertwined the NGO sector has become with government policymaking.

Funding NGOs to lobby for policy allows the ruling party, or any future government, to reinforce its agenda without proper parliamentary oversight. It creates a taxpayer-funded echo chamber that rewards ideological allies and punishes critics. Civil society should be pluralistic, not partisan.

The way forward

The solution is clear. No NGO that engages in political lobbying or advocacy should receive public funding. If government wishes to contract an NGO, it must be for a strictly defined, non-political service such as education, healthcare delivery, or humanitarian relief. The purpose and budget of such funding must be transparent and independently audited.

Restoring the independence of civil society requires a firm separation between the state and its supposed watchdogs. Taxpayer money must never be used to finance lobbying. Democracy depends on a genuine competition of ideas, not a system where one side is subsidised by the public purse.

Conclusion

NGOs play an important role in society, but they are not above accountability. When they accept taxpayer money and then use it to influence policy, they cease to be independent and become extensions of the state. South Africans did not elect these organisations, and should not have to fund their activism.

A free society requires truly independent institutions, transparent funding, and an equal playing field for all ideas. The government should serve the people, not its favoured NGOs.

Nicholas Woode-Smith is managing editor of the Rational Standard and a Senior Associate of the Free Market Foundation. He writes in his personal capacity.

Editor’s note: Money distributed to NGOs through the National Lotteries Commission (NLC) does not come directly from the National Revenue Fund or from tax collections. It originates from a statutory portion of lottery ticket sales, channelled into the National Lottery Distribution Trust Fund for charitable and developmental purposes. However, because the NLC is a government-established public entity created by law and accountable to Parliament, these funds are still considered public money. They are held and disbursed under a public mandate for the public good, and are therefore subject to the same expectations of transparency, accountability, and political neutrality as taxpayer-funded grants.