The IEA’s defence of its charitable status: some brief comments

On 5th October I published an article in Civil Society News questioning the charitable status of the Institute of Economic Affairs (supposedly advancing education for the public benefit):(

I argued that it should not be a charity on two grounds: that its purpose is partly political, as defined in the Charity Commission’s guidance CC9, whereas the purpose of a charity must be exclusively charitable; and that it constantly infringes the Charity Commission’s guidance on what charitable education must be, because it promotes a predetermined, controversial viewpoint (free market ideology and determination to shrink the state), rather than the balanced and neutral kind of education as defined in Charity Commission guidance.

The IEA’s rejoinder is reproduced below. Here are brief comments on their main points.

  1. “Charities can be political in line with their mission provided that it is not their sole purpose”, says the IEA. This implies that being political can be part of a charity’s purpose so long as it’s not the sole one. That is wrong in charity law. A charity’s purpose must be exlusively charitable. CC9 says “A charity cannot have political activity as any part of its charitable purposes” and that an organisation with a political purpose, even if like the IEA it also has a charitable purpose, cannot be a charity. In my article I quoted the IEA’s own description of its purposes to show that they are clearly in part political as defined in CC9.
  2. In response to the argument that the IEA promotes a predetermined, controversial position (the state must be shrunk in multiple dimensions), the Institute doesn’t pretend to be uncontroversial. Instead, they claim “Whether educational charities can be controversial remains controversial” and whether the regulator agrees is “unclear”. On the contrary, the Commission’s guidance over many years is perfectly clear that promoting a pretermined and controversial viewpoint is not charitable education.
  3. Given the Commission’s guidance that charitable education should be balanced and neutral, paying regard to different viewpoints as appropriate, the IEA suggests that it is “sufficiently” balanced and neutral “within the school of thought” and “in the round”. But since the IEA is a frankly proselytising organisation and everyone involved is (in its own words) constantly on the look out for ways to shrink the state, reflected in all its output, the scope for balanced and neutral education is vanishingly small.
  4. The IEA relies heavily on the argument that since I have made these points before, and have failed to convince the Charity Commission, the issue is no longer live and the arguments can be dismissed. Well, as a previous Board member of the Charity Commission, I know that the Commission can change its mind on the interpretation of charity law and its own guidance, even after many years of debate. After all, it wasn’t so very long ago, in the 1990s, that the Commission was describing political activity as, like the elephant, hard to describe but easy to recognise. and berating charities like Oxfam for prosecuting certain campaigns with too much vigour, for lending its name to the abolition or otherwise of Apartheid, and for taking issue with the deficiencies of the international community. So the six years since my first blog about the IEA in March 2016 is quite a short time when it comes to persuading the Commission to change its mind.
  5. Previous representations from me to the Commission have led to the taking down of the Proposals for a Conservative Manifesto with the Taxpayers’ Alliance in 2017, a series of meetings between the Commission and the IEA, and recognition that they should not be putting out political prescriptions attributed by staff or in press releases as being endorsed by the IEA as a charity. So they have had some effect, though not enough. And in trying to justify to me their continuing recognition of IEA as an educational charity, the Commission has had to resort to some obviously debatable arguments, such as saying that the IEA’s viewpoint is “relatively uncontroversial” – which, in the light of recent events, have not lasted well.
  6. Yes, the issue is live! It is unjust that the IEA should be a charity.

Here is the IEA’s rejoinder to my article:

Andrew Purkis’s latest attack on the Institute of Economic Affairs (IEA), would be more compelling had he not already tested the points he raises with the regulator, repetitively, over the course of a decade long lobbying campaign. He honourably maps out this record of failure on his own blog, but persists in pretending this is a live issue, rather than one long settled by regulatory review.   

Charities can be political in line with their mission, provided that is not their sole purpose, and self-evidently isn’t at the IEA which runs summer schools, publishes books, and other educational content. Education charities must in addition be ‘sufficiently balanced and neutral’, but ‘within the school of thought’ and ‘in the round’ while allowing readers or listeners ‘to reach their own conclusions’. Meaning we offer a range of free market content, balance should be considered in the wider context of that output, and we offer options not campaigns.

Whether education charities can be controversial remains controversial. We believe such a stipulation does not exist in charity law, and clearly conflicts both with freedom of expression and academic freedom as defined in the Education Acts. Whether the regulator now agrees is unclear. It is, though, self-evidently relevant to their reversal of the regulatory sanction misapplied to the IEA in 2019 when they banned and then unbanned a book about Brexit.

Funding transparency or protection of donor privacy is a matter of general charity law, not specific to think tanks. Were any think tanks selling access to Ministers for lobbying purposes this would be strictly illegal in both charity and lobbying law. Claims in this area usually amount to conspiratorial and abusive online campaigns, that do not encourage transparency. A specific allegation made against the IEA in 2019 was tested and found without merit by two regulators. We have conversely published on improving transparency by requiring all politicians to publish their meetings.

It is correct there is still some regulatory ambiguity in this space. 2016 operational cases for other think tanks proposed an extension of objects and dual charitable / non-charitable structures as solutions for ‘on the line’ activity. But they are not applied consistently. The sector guidance rushed out without consultation in 2018 remains poor. A long-term solution for charitable think tanks might be to allow ‘advancing debate for the public benefit’ to emerge as an ‘other purposes’ object, to support free expression and the quality of public discourse. Something that is particularly relevant in this age of polarisation, no platforming, and cancel culture.

But in simple terms, while Purkis is a knowledgeable and experienced charity law campaigner, on the matter of the IEA’s charitable status he is simply and repetitively wrong, and has been told so repeatedly by the regulator.


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