NGOs formally operate outside the public sector. They belong to civil society and include, among others, humanitarian organizations, development organizations, sports organizations, cultural organizations, health organizations, and other interest groups.
Statistics Norway (SSB) refers to this as a “non-profit and voluntary sector”. SSB applies a definition in which organizations must, among other things, be self-governing and institutionally separate from public administration, including counties, municipalities, supervisory bodies, and directorates.
At the same time, this is a large sector. SSB’s satellite accounts show that the non-profit and voluntary sector accounted for nearly 90,000 paid full-time equivalents in 2018. The same figures show that the state accounted for 26.6 percent of funding, while municipalities and counties accounted for 16.7 percent. In total, 43.3 percent of the sector’s funding came from these public budgets.
Some NGOs establish limited companies alongside their activities. It is unclear to what extent this, and VAT compensation, are included in SSB’s figures. Since the public sector is financed through taxes and duties, VAT compensation to NGOs creates a need to generate revenue through increased tax and duty pressure on citizens and businesses.
What appears to be civil society correcting power may, in reality, be a state-funded extension of it.
SSB’s figures represent averages. It is not uncommon for many organizations to be 100 percent publicly funded. Even lower levels of financial dependency may lead to closure or major restructuring without public funding. Because strong financial dependency inherently challenges independence from the benefactor, there is a significant risk that such organizations function as governmental controlled non-governmental organizations (GCNGOs).
As a result, many of them become a central part of the extensive politics industry.
In Norway, the public sector is considered very large per capita. The funding of NGOs indicates that it is, in reality, even larger. From another perspective, parts of the NGO sphere can be seen as a form of privately organized financing of public administration outside the tax system.
Read more: This is governmental controlled non-governmental organisations (GCNGO)
Public funding of civil society is, in itself, natural. After all, the public sector is meant to serve citizens and be governed by elected representatives. Using public funds to support civil society organizations can therefore be seen as a desirable and efficient collective financing model.
However, such funding also entails significant and often overlooked democratic challenges. When organizations heavily dependent on state funding act as independent actors in hearings, committees, and public debate, this raises not only questions of credibility, but also of integrity, impartiality, and corruption risk.
It is likely that organizations in such a position avoid taking positions that strongly conflict with their funding sources. Many GCNGOs may have secured long-term funding from political majorities that share their views. As recurring budget items, they may continue their activities with little or limited political resistance. Lobby organizations, including GCNGOs, have long traditions of close proximity to power institutions, including parliaments in capitals around the world, with frequent interaction related to influence and funding.
NGOs also compete with one another. Those that challenge funding authorities too strongly risk consequences at the next budget cycle. This can contribute to a moderation of language and positions that may spread throughout society, while dissatisfaction shifts to less open arenas, including social media. Tendencies among political environments and editorial media to dismiss debates in social media may further increase the distance between citizens and decision-makers.
The consequences of this distorted situation are numerous.
For example, political environments may be strongly critical of private actors in civil society, including providers of health and consulting services, while at the same time listening to GCNGOs including religious organizations they themselves fund and allowing them to win public tenders. When an already publicly funded organization competes with entities without such an advantage, distortions arise that would be challenged in other contexts, such as in the Bølgen case in Frogn municipality. This may also affect freedom of religion if certain denominations receive support through tenders that are not realistically accessible to others.
We also observe situations where these governmental controlled non-governmental organizations engage in various forms of influence toward politicians at all levels of governance, including national parliaments.
Politicians around the world often appear more focused on revenue increases through higher taxes and duties than on their own cost side—although public budgets can also be balanced through cost reductions. When seemingly independent GCNGOs advocate for higher tax levels, they provide politicians with exactly the kind of “independent” validation they need. Since politics does not necessarily have to align with factual foundations, but is largely influenced by opinion, one such “independent” voice may be sufficient.
A similar dynamic can be observed in areas such as environment and climate.
Citizens and voters need to navigate complex issues in order to form opinions. When the public sector becomes as extensive as in many democracies with a tendency toward self-expansion at the expense of civil society, it becomes natural for people to seek other sources of trustworthy information. If civil society organizations themselves lack credibility, people may rely on their partial perspectives presented as objective, turn to alternative sources, or abandon the search altogether due to a lack of viable options. In this way, support for GCNGOs may become an element in political extremism.
OECD points out that poorly managed conflicts of interest can undermine the integrity of public decisions and ultimately allow vested interests to capture policymaking. Applied to this field, the point is simple: The stronger an organization is financially tied to its primary funding source, the weaker the distance it is meant to represent.
In such a context, dependencies—including financial ties—should be clearly disclosed in consultation submissions that form part of the decision-making basis for public inquiries and subsequent legislative proposals. It is also relevant to consider whether actors funded by specific public bodies, such as ministries or directorates, should be disqualified from roles requiring genuine independence.
To create better distance, citizens should, through deliberative mechanisms, influence or participate in funding decisions rather than leaving them to professional environments that often share networks and interests with GCNGOs.
The combined effect of a closely aligned public sector and GCNGOs may also reduce the willingness of individuals and businesses to participate in consultations and advocacy, given the low likelihood of advancing alternative perspectives. Developing and communicating such perspectives is time-consuming and non-remunerated, while the opposing side engages in this work as part of their daily activities. As a result, many will effectively withdraw, leaving the arena to the politics industry—including GCNGOs—and possibly their own unions and business associations, which largely operate within the same culture, without necessarily agreeing with their positions.
The parallel to both media and academia is evident: credibility is also weakened there when financial dependency is presented as independent observation.
To balance their coverage, media rely on external sources for critical perspectives. This may lead to imbalanced coverage when both the source and its critics effectively belong to the same sphere. To address this, editorial teams would need to engage in systematic source criticism and actively seek alternative commentators. Instead, they often turn to familiar sources and use their own journalists both as investigative reporters and commentators.
Oagal has previously noted that approximately one-third of Norwegian media revenue comes from public funding, which may naturally influence editorial work and positioning in favor of public institutions. As a result, the power imbalance between citizens and the politics industry becomes significantly skewed in favor of the latter. With such extensive public funding, GCNGOs increasingly resemble subsidiaries of the public sector rather than independent entities governed by civil society.
It is a fact that GCNGOs collectively represent an attractive labor market for politicians outside office, whether as temporary positions between electoral cycles or as long-term career transitions.
Many politicians have limited experience from ordinary working life, and VG reports that Norwegian politicians rank low in educational attainment. GCNGOs, however, offer opportunities for well-paid positions where political experience is valued more highly than professional qualifications or formal education—for example in lobbying roles to secure funding and contracts. Because these organizations become safe havens for politicians across the political spectrum, incentives to address the blurring of boundaries between public and private sectors may be weak. This creates a significant, though often less visible, corruption risk.
Many will continue their political work under the appearance of being non-political employees in such organizations. When a person has spent their entire life in politics and then takes on a politically related role in a GCNGO, it is difficult not to carry forward deeply embedded party culture and ideology.
Such self-reinforcing, politicized environments may also become less attractive workplaces for individuals from broader civil society. As in the public sector, a strong political culture may prevail, leaving others feeling excluded from career opportunities, responsibilities, and influence. Close ties to funding authorities and shared party affiliations may lead to decision-making behind the scenes and create power structures and leadership cultures that are difficult for outsiders to understand or access.
Similarly, such distant cultures may reduce the willingness to contribute financially through membership or voluntary work. When dominant board members and other representatives in GCNGOs have party affiliations or clearly skewed sectoral interests, participation among other members may decline. In this way, even non-political activities such as sports and culture may, in practice, become political instruments. This also raises questions related to corruption and fundamental civil rights such as freedom of expression, freedom of association, and freedom from discrimination. When citizens encounter political cultures within organizations that are supposed to be their own—and where their voices are not heard or their concerns not brought forward—civil society organizations lose their function as arenas for civil rights.
Contributing volunteer work and small-scale fundraising to heavily publicly funded membership organizations may also be perceived as unproductive, weakening civic engagement and voluntary spirit.
Read also: Striking similarities between the nobility and party rule
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