State funding pressure in interest groups, political parties and service-oriented membership organisations

Abstract

This article explores which interest groups, political parties and service-oriented organisations – membership-based voluntary organisations constitutive for civil society – experience the accessing and maintenance of state funding as a major challenge and why. Building on resource dependency theory, hypotheses are presented on how different financial dependencies (public and private) and the diversity of organisational income affect how intensely membership-based organisations are exposed to state funding pressure. Testing these hypotheses with new data from four organisation surveys in Germany, Norway, Switzerland and the UK indicates that different types of state funding dependencies (e.g. grants, contracts) as well as funding diversity increase organisational concerns about state funding, while reliance on membership fees reduces them. These findings have important repercussions as state funding pressure is central to organisations’ revenue-seeking behaviour by focussing leaders’ attention on state authorities, thereby redirecting organisational priorities away from organisations’ constituencies.

Keywords:

• Membership organisations
• groups
• political parties
• resource dependencies
• state funding

Acknowledgements

Many thanks go to the two West European Politics referees and to Adrià Albareda, Endre Borbáth, Patricia Correa, Bert Fraussen, Darren Halpin, Thomas Holyoke, Milka Ivanovska Hadjievska and William Maloney for their helpful feedback on an early version of the paper. Thanks also go to Hin-Kin Or for his research assistance on the STATORG project. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Civil society organisations (CSOs) are defined as voluntary organisations with a formalised infrastructure, that are private (separate from government), non-profit-distributing and self-governing, with members being either individuals or corporate actors such as firms, institutions, or associations (a subset of organisations cutting across the broader categories of ‘non-profit’ and ‘organised interest’) (Jordan et al. 2004; Salamon and Anheier 1998).

2 As the empirical boundaries between advocacy- and service-oriented groups are blurred, it is suitable – depending on the focus of the research – to study different group types jointly (e.g. Hasenfeld and Gidron, 2005; Heylen et al. 2018; Kimberlin 2010; LeRoux and Goerdel 2009).

3 E.g. Allern and Bale 2012; Biezen et al. 2012; Bolleyer and Correa 2020; Farrer 2018; Fraussen and Halpin 2018; Ivanovska Hadjievska and Stavenes 2020; Lisi and Oliveira 2020; Saglie and Sivesind 2018.

4 E.g. Billis 2010; Bosso 1995; Fraussen 2014; Katz and Mair 1995; Phillips and Smith 2011; Poguntke et al. 2016; Weisbrod 1997.

5 Organisational leaders manage the day-to-day running of an organisation as well as its outside relations (e.g. Cigler and Loomis 2012).

6 E.g. Biezen 2008; Bennett and Savani, 2011; Eikenberry and Kluver 2004; Fraussen 2014; Froelich 1999; Frumkin and Kim, 2002; Hagevi 2018; Katz and Mair 1995; Poguntke et al. 2016; Salamon 1995, 1997; Scarrow and Webb 2017.

7 Consequently, state funding pressure can be experienced by organisations with and without current or past state funding access.

8 E.g. Froelich 1999; Jordan and Maloney 1997; Katz and Mair 1995; Poguntke et al. 2016; Scarrow and Webb 2017; Weisbrod 1997.

9 Parties might receive tax benefits as ‘parties’, as ‘non-profits’, or receive tax benefits for their donors (or a mixture thereof). Of 19 long-lived democracies (including the four countries covered below) only Luxembourg provides none. Meanwhile, only 5 of the same 19 democracies restrict tax benefits for groups to public benefit or charitable organisations without including in the specification of beneficiaries also political and/or partisan organisations (Bolleyer 2018: 95, 151). The data examined here indicates the relevance of this funding source for all three types of organisations: for 25% of parties they are important/very important as compared to 34% of interest groups and service-oriented organisations, respectively.

10 While the categories of grants and contracts are discussed in non-profit and interest group research (e.g. Harris 2010; Leech 2006) they are also relevant for parties: 20% of service-oriented organisations covered in this study identify state contracts as important or very important for their budget, 10% of interest groups and 10% of parties do. In comparison, to 31% of parties, 28% of service-orientated organisations and 21% of interest groups state grants are important or very important.

11 Both in group and party research, a related debate has focussed – rather than on diversification as defined here – on the balance between different types of income and its consequences, making arguments about organisations’ state funding reliance to ‘crowd out’ private fundraising in terms of donations or membership fees (e.g. Andreoni and Payne 2003; Pierre et al. 2000).

12 https://socialsciences.exeter.ac.uk/regulatingcivilsociety/surveys/, last accessed October 1 2020.

13 A factor analysis was conducted to confirm the accuracy of selecting these three items to construct the index. The Scree test suggests that one factor should be extracted from the three item with eigenvalue equals to 2.64. All three items have high factor loadings (0.91, 0.98 and 0.83).

14 See Online Appendix Table A4 for the income sources covered by the funding diversity measure.

15 Also note that multicollinearity diagnostics shows that each of the variables in the model has a variance inflation factor below 3.5 (see Online Appendix D). Hence, multicollinearity is not a concern (Imdadullah et al. 2016).

16 E.g. Biezen 2008; Billis 2010; Bosso 1995; Fraussen 2014; Katz and Mair 1995; Phillips and Smith 2011; Poguntke et al. 2016; Weisbrod 1997.

17 While an analysis excluding parties brings the same result as the main model in Table 1 (see Online Appendix E, Table E7), the party sample – though no less representative of their population than the group sample (see for details Online Appendix B) – is too small to run the analysis only for them.

Additional information

Funding

This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007–13)/ERC grant agreement 335890 STATORG). This support is gratefully acknowledged.

Notes on contributors

Nicole Bolleyer

Nicole Bolleyer is Chair of Comparative Political Science at the Geschwister-Scholl Institute of the Ludwig-Maximilians-Universität (LMU) in Munich (Germany). She is the author of The State and Civil Society: Regulating Interest Groups, Parties and Public Benefit Organisations in Contemporary Democracies (Oxford University Press 2018). Her research has appeared in a range of leading journals such as Comparative Political Studies, Journal of Politics and the European Journal of Political Research. [[email protected]]