Charity Commission says IEA’s viewpoint is “relatively uncontroversial”

The Charity Commission has said in a letter to me that the economic viewpoint taken by the right wing think tank The Institute of Economic Affairs is “relatively uncontroversial”. This is part of their justification for continuing to regard the IEA’s purposes as exclusively for the charitable advancement of education.

The Commission does however acknowledge that the IEA has crossed to the wrong side of the line of what a charitable think tank may or may not do by publishing a joint Manifesto for Conservatives with the Taxpayers’Alliance during the General Election and publishing press releases associating the IEA  with a string of political proposals for changing law or policies. This is not compatible with the charitable advancement of education. The Commission undertakes to continue to monitor the IEA’s activities to ensure they don’t cross the line again.

In my reply I argue that the IEA not only fails to observe the Commission’s guidance on charitable education but has a partly political purpose (as the Commission defines it) and therefore cannot be a charity. I maintain that the Commission is wrong to maintain the charity status of the IEA in contravention of its own guidance in CC9.

Here is the correspondence:

Letter of 6 November from Charity Commission to me:

Dear Dr Purkis
The Institute of Economic Affairs (235351) I am writing further to my email of 6 September. I am sorry for the delay in letting you have a full reply to your letter of 29 April. As you will recall, we wrote to you separately on 22 May about the outcome of our enquiries in relation to the concerns you raised with us about IEA’s political activities in the run up to the general election. What we did Since I last wrote, we have been working with IEA to assure ourselves that it is fully aware of what are acceptable educational and political activities that can be undertaken in furtherance of the charity’s objects. We reviewed the three publications that you brought to our attention1, as providing useful examples of IEA’s activities. Wethen met with IEA at their London offices and further discussed the relevant issues. Advancing education As you know, the nature of education is informative, enabling the reader to draw their own conclusions. We say that where the premise or starting point is uncontroversial then education does not require a neutral starting point. Education can be pursued from a particular perspective. Such a perspective has to be relatively uncontroversial or at least a perspective which is held from an educational and social viewpoint held by informed opinion.
1. 1 Obesity and the Public Purse by Mark Tovey (23 January 2017)
2. A Rational Approach toAlcohol Taxation by Christopher Snowdon, 15 February 2017; and
3. A briefing on disability benefits of 27 December 2016 by Dr Kristian Niemitz
Dr Andrew Purkis
By email only to andrew@purkisfam.co.uk
Charity Commission PO Box 211 Bootle L20 7YX T:0300 065 2008 Your ref: Our ref: AB/C-457875-RCT Date:06 November 2017
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The starting point of the IEA is “free market or libertarian economics”. This is one of several different economic viewpoints held by informed opinion. There are many schools of economics and much argument and debate about the merits of the different perspectives. We consider IEA’s economic viewpoint to be arelatively uncontroversial perspective accepted by informed opinion. Consequently we registered IEA as a charity. Other think tanks that are charities start from different positions and provide different perspectives. However, we do acknowledge that, as you suggest, some might argue that any economic perspective is controversial.
Think tanks promote informed debate and wider public understanding of issues. In fact it is often think tanks that provide the media,and therefore the public,with the statistical and economic analysis that inform debate and enable meaningful questions to be put to politicians. Such explanation may indicate that a particular policy is, or is not, likely to work and the reasons why. Therefore we think it is legitimate for a charitable think tank to explain, through reports and articles etc, why it thinks a particular policy is likely to achieve its stated objective and/or be beneficial to the country and to do so from a particular perspective.
The purpose ofIEAis to educate the public about economics and political science from a free market perspective. We therefore consider that it is legitimate for IEA to explain the anticipated economic impact of particular policies promoted by the government or opposition from a free market perspective. Similarly, other think tanks can explain the same policies from a different perspective.
This is what the identified publicationsseek todo. Whilst we are not experts in the field, they appear to us towell-argued papers backed up with academic referencesand havesufficient educative value. IEA isessentiallyactingas a vehicle to disseminate those academic ideas and recommendationsto the public in furtherance of its purposes. Political activity As you say, a charity can engage in political activity, but only in furtherance of its objects, but may not have a political purpose. This is essentially because the courts would not be able to decide whether a proposed political or other change is for the public benefit. Given their usual area of activity, charitable think tanks in particular must be careful about supporting or opposing policies because this is likely to be political activity and such activity must promote the objects of the charity. They should make it clear that they do not support or oppose policies or political parties.
Think tanks need to take particular care when publishing research that contains recommendations of a political nature, such as advocating the introduction of a particular policy. This is because it is not generally appropriate for an educational charity to advocate changes in public policy. They should make it clear that the recommendations are those of the researcher and are not those of the organisation.This is particularlydifficult when papersare authored byemployees and may therefore appear to be the voice of the organisation.
This issue is sometimes compounded (and we have found this with IEA) in the way that think tanks issue press releases about their work. In operating for the public benefit, research should be made publically available, which is usually done by publishing it on a website. Naturally, think tanks want to achieve wide dissemination of their work and the public need to be aware of its existence.
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They therefore needtoheadline their research toget attentionfrom the media. However, education charities should generally use more neutral language which does not give the impression they are straying into party politics and have a particular opinion. There has to be a balance, which often requires a nuanced judgement to ensure that the wordingof any press releasesdoes not convey the organisation’s support for the proposals.
We have discussed these issues with IEA. In particular, we have stressed the need for ittodistance itselffrom the actual recommendationsofresearch. We haveexplained what is and is not acceptable for a charitable think tank and we are satisfied that the trustees understand this. Conclusion We are of the view that IEA continues to exist for a charitable purpose and we are now confident that IEA fully understands where the line, in terms of what is and is not acceptable, is drawn. We will, however, continue to monitor charity.
I hope this is helpful to you.
Yours sincerely
[Name redacted at Charity Commission’s request]

[ditto] Regulatory Compliance Rccorres1@charitycommission.gsi.gov.uk

And here is my reply to Commission dated 8 November

Dear Mr [name redacted at Charity Commission request],

INSTITUTE OF ECONOMIC AFFAIRS

Thank you for your letter of 6 November.

I appreciate the efforts you have made to discuss these issues with the IEA and satisfy yourselves that the IEA now understands what a charitable think tank for the advancement of education may or may not do.

You will remember that after your previous round of discussions with the IEA following a previous complaint, you quoted in your letter of 19 October 2016 the Trustees’ assurances that the IEA has no agenda beyond research into market economics and the dissemination of ideas. That did not last long, however, being followed soon by the publication of the joint Manifesto with the Taxpayers’ Alliance which you had to tell them to take down and the series of expressions of corporate political positions in press releases which you have now had to explain should not be repeated in future. So I am glad that you undertake in your letter to continue to monitor their activities to ensure they do not continue to stray over the legitimate line, but I think the problems are deep-seated and flow from the IEA’s partly political character.

It is also helpful that you clarify that “it is not generally appropriate for an educational charity to advocate changes in public policy”, which is precisely what the IEA has appeared to be doing for years.

There are, however, major difficulties with your arguments for continuing to regard the purposes of the IEA as exclusively charitable (for the advancement of education).

Firstly, you rest your decision on the judgement that “We consider IEA’s economic viewpoint to be a relatively uncontroversial perspective accepted by informed opinion”. Uncontroversial? As the Commission has often made clear, it is not enough to accept a general charitable objective at face value and one needs to see how the general objective is being defined in practice. Please look again at how IEA describe their mission and purpose on their website:

“It is more vital than ever that we promote the intellectual case for a free economy, low taxes, freedom in education, health and welfare, and lower levels of regulation.” All those involved in the IEA’s work, we are told, “believe that society’s problems and challenges are best dealt with by individuals, companies and voluntary associations inter-acting with each other freely without interference from politicians and the state. This means that Government action, whether through taxes, regulation or the legal system should be kept to a minimum. Our authors and speakers are therefore always on the look-out for ways of reducing the government’s role in our lives.”

On the planet where I live, this statement of purpose is indeed controversial, for the reasons that I took the trouble to spell out in my last letter. I do not fully understand what you mean by claiming that such a viewpoint is accepted by “informed opinion”, since very large numbers of informed people profoundly disagree with any such view. Since the IEA’s vision and purpose as they describe them are controversial, they contravene your guidance that the charitable advancement of education must not be promoting a controversial, predetermined viewpoint.

It is also rather hard to square the above quotation from IEA’s website – or indeed most of the IEA’s output – with the statement early in your letter that “the nature of education is informative, enabling the reader to draw their own conclusions”. On the contrary, they lead the reader, or radio and TV audience consistently to the very specific conclusion that the state must be shrunk whether in the dimensions of taxes, regulation, the legal system or public health policies.

Secondly, the IEA’s statement of purpose as quoted above is political, as you have defined it in CC9. This is not allowed in charity law. CC9 says that a charity cannot exist, either wholly or in part, for any purpose “directed at….securing or opposing a change in the law, policy or decisions of central government, local authorities, or other public bodies”. Yet IEA’s stated purpose is directed at securing lower taxes, lower regulation and what they call “freedom” in education, health, etc; and all its contributors and partners are, explicitly, looking out for ways of shrinking the state. That falls squarely and unequivocally within CC9’s definition. It is not true that many other charitable think tanks have similarly political statements of purpose. IEA’s is more akin to the mission statements of other think tanks with partly political purposes which, quite rightly in my opinion, are not charitable, even if they have a charitable research arm.

If the IEA were truly a charity with the exclusively charitable purpose of advancing education, its statement of vision and purpose might be something like this:

“IEA believes that society’s problems and challenges are generally best dealt with by individuals, companies and voluntary associations inter-acting with each other freely. The IEA strives to increase understanding of how the operation of the free market can optimise well-being in different dimensions of our lives. All our work is designed to deepen knowledge, understanding and awareness of the potential for good of allowing the free operation of market forces, and conversely the potential for unintended ill effects resulting from unnecessary restriction or distortion of the market, whether by the state, politicians, monopolies or cartels. All our staff, authors and contributors are committed to the advancement of education and understanding from this perspective.”

The difference is that this is a made-up version arguably appropriate for an education charity, and that might stand a chance of being seen as consistent with CC9, whereas the IEA’s actual statement is partly political and therefore not charitable. The problems you have experienced with the IEA are not occasional flashes in the pan, but flow from the partly political purpose set forth on their website.

Thirdly, you argue that while it is generally inappropriate for an educational charity to advocate changes in public policy – which happens to be the major thrust of the IEA’s statement of purpose quoted above – it is OK to employ staff and sponsor individuals to produce papers and enter media debates advocating such changes, so long as the charity distances itself from the conclusions, and stops attributing the views to the IEA. But is this position tenable? If the IEA carefully selects its contributors and their research topics and chooses to publish and promote them, and they are every time promoting the IEA’s political purpose quoted above, it seems a half-truth to claim that they do not necessarily represent the views of the charity. This is even more problematical when, as you say, the authors are staff members of the charity. Moreover, the Director General of the IEA, and others such as Mr Snowdon, are familiar figures in public debates on TV and radio: are they supposed to be speaking as individuals and not representing the charity? This is most unlikely to be understood in a world where Directors are assumed to speak for the charity they lead. Are IEA tweets (I have just seen one praising a journalist’s “strong moral case for investing in tax havens”) supposed not to represent the views of the charity?

Indeed, CC9 itself says that “Trustees must not allow the charity to be used as a vehicle for the expression of the personal….views of any individual trustee or staff member.” How does this square with your position that it is OK for the IEA to allow itself to be used as a vehicle for political reports and speeches by its individual staff (so long as it “distances” the charity from them)?

Fourthly, you have not clarified whether the previous guidance that I quoted in my two previous letters on the nature of charitable education is still valid. For example, your guidance has been that educational charities “must research and present information in a neutral and balanced way that encourages awareness of different points of view where appropriate”. That is definitely not the hallmark of the IEA. Nor, according to your guidance, should they provide education with the purpose of persuading people to form specific conclusions or follow particular prescriptions – like shrinking the state in all possible dimensions?

I am aware that these issues are not straightforward. Yet the Commission is in danger in this case of appearing to defend the charitable privileges of an organisation that is not consistently advancing charitable education, and whose purpose is partly political as the Commission has defined it and cannot therefore be a charity. This is unfair, untenable and damaging to the Commission. This is unfinished business and will surely keep coming back unless the Commission seriously addresses the problems I have tried to identify.

Thank you again for the action you have taken and for your letter.

 

Yours sincerely,

 

Andrew Purkis.

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