The Charity Commission has instructed its Permissions and Compliance Team to consider the two key issues concerning the Institute of Economic Affairs (IEA) in my letter below. The issues are: whether IEA is sufficiently transparent about the sources of funding for key political activities, and whether some of its controversial political activities are within its charitable objects. Here is the letter explaining these concerns:
“This is a formal request to the Commission to investigate the IEA on two matters, if you are not already doing so. I am writing as an individual, not on behalf of any organisation. As you know, I have served as Chair of four UK charities and Trustee of another, as Chief Executive of some others, as Secretary of Public Affairs to the Archbishop of Canterbury and subsequently as a Board Member of the Commission.
“Firstly, the Commission has made it abundantly clear in its recent guidance on the EU referendum, “If your charity does get involved in any political activity connected with the referendum, you should ensure that, during such involvement, you publicly acknowledge the source of your funding so that the reasons for your involvement can be fully assessed. If you do not do so, this could seriously undermine and detract from the quality of your contribution and may attract regulatory scrutiny by the commission…..full transparency about funding is especially important.”
“This principle applies pari passu to the contentious political activity of the IEA, trying to lobby Government in favour of restricting use of government funds for charity advocacy and engaging in wider influencing work against “nanny state” policies relating to lifestyles and public health. Yet the IEA Trustees Report does not identify the sources of the donations on which the charity mainly relies, and this lack of transparency, especially in relation to the activities I have mentioned, has led to widespread allegations that vested interests such as tobacco companies or the food industry may be involved. I understand that Mr Christopher Snowdon, Director of Lifestyle Economics has refused to disclose the source of the funding for his work. This infringes the guidance quoted above and detracts from the reputation of the charity as a contributor to public debate and policy-making. I note that Sarah Atkinson’s speech to the Bond Conference on 1 March majored on the point that “We can build public trust in charities by making them more transparent and accountable”, and I request that the Commission investigates whether disclosure of funding for contentious political activity by the IEA meets the necessary standards or not.
“Secondly, my understanding is that promoting a particular view of economics is not in itself a charitable objective, and the IEA must carry out its charitable objective of contributing to learning and education. Again, my understanding is that learning and education is not understood by the Commission or the courts to be promoting a particular view or outcome. It must be aimed at a broader understanding, not acceptance of a particular prescription. Yet it seems that some of the political activities of the IEA involve influencing and lobbying Ministers and politicians in favour of a very particular prescription such as introducing gagging clauses into grants to charities, or curtailing particular kinds of public health policies. If the promotion of free market economics were a charitable objective, it is clear that such activity could be a means of pursuing it, but it is not at all clear how this activity can be a means of pursuing the advancement of learning and education. So I request the Commission to investigate whether in respect of specific and contentious campaigning and lobbying activity the IEA has been acting properly within its charitable objects.
“Thank you for considering this request.
My critique of the IEA’s “Sock Puppets” report, which became the so-called evidence base for the Government’s recent decision to insert an anti-advocacy clause in all Government grants, is here:
The IEA espouses free market economics and has also been active in arguing against public health campaigns that it believes extend the influence of the state, and against planning restraints such as the Green Belt. Another free market think tank charity, Policy Exchange, has also been accused of lack of transparency about its funding.