What is charitable education? Status of Institute of Economic Affairs under spotlight again

The Charity Commission has recently confirmed that charitable education for the public benefit must inform the public in a balanced and neutral way. It should not, they say, comprise selectively presented information that is designed to promote a particular point of view.

The Legatum Institute Foundation recently fell foul of this guidance with its report “Brexit Inflection Point: The Pathway to Prosperity” published on 4 November 2017″. The Commission decided that it was OK for Legatum to have a free trade perspective as a starting point, but it was not OK to fail to make clear that there are multiple Brexit outcomes and that free trade is only one of a number of potential political outcomes that might be sought. It was not OK to fail to present balanced, neutral evidence and analysis. As a result, the Commission concludes that the report could be seen as promoting a particular political view for the aim of a particular outcome and recommending specific Government action that reflects this. That is inconsistent, says the Commission, with the purpose of charitable education.

I have written to Helen Stephenson, Chief Executive of the Charity Commission, to suggest that this guidance is incompatible with the continuing charitable status of the free market think tank The Institute of Economic Affairs (IEA).

The IEA produces a whole stream of reports, articles and verbal media contributions on highly controversial subjects, all with a view to shrinking the state and promoting free market solutions. They are not balanced and neutral. There is no consideration of the downsides of policies recommended by IEA reports nor of other desirable outcomes or alternatives. As I write to Helen Stephenson, “Whether the subject is the growth of obesity, the taxation of alcohol, public health policies, taxation, tax havens, Sock Puppets or solving the housing crisis by reducing planning controls, you will find in every case a one-sided and controversial contribution (whether adorned by footnotes or not) aimed at reducing the role of the state.” One of the latest is, in the words chosen by IEA, “a report debunking the myths surrounding the purposes of tax havens”. Does that sound like a balanced and neutral contribution? Remember the Commission’s findings for the wider sector from the Atlantic Bridge case in 2010: “One of the key features of advancing education or promoting research for the public benefit in charity law is that the education or research must not promote a position on a contested issue or area, unless that view is uncontroversial”. In my view, this is what the IEA does all the time.

To my mind, the reason for such frequent transgressions (as I see them) against the guidance is plain from reading the IEA’s website. This explains that the purpose of the IEA as understood by itself is not merely academic or intellectual but is also directed at securing lower taxes, lighter regulation and what they call “freedom” in education and health. It explains that all of its contributors and partners are, explicitly, looking out for ways of shrinking the state. That agenda is of its nature partly political, as defined by the Commission in its guidance on political activity. 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”, eg the purpose of shrinking or weakening the state in different dimensions of public policy.

Like Widow Twankey, the IEA wears the clothes of an educational charity, but the reality beneath is different: an organisation with a partly political purpose and a controversial, predetermined viewpoint which it seeks to promote with vigorous consistency. This purpose might be good for public debate and pluralism, but it is not charitable.

I am leaving for another time the debate over another aspect of the IEA, which is its untransparent treatment of who funds its work. Its standards of transparency are far below those of many other well known charitable think tanks. The public does not know whether those funding its work might have a personal or financial interest in relation to tobacco, sugar, tax havens, alcoholic drink, and so forth. This is not good for public confidence in the nature of charities’ work as being exclusively for the benefit of the public. There are complex arguments about what could effectively and properly be done about this.

For now, the key question is this. If the IEA consistently breaches the guidance recently reaffirmed in the Legatum case, why should it remain recognised by the Charity Commission as an educational charity? There have been other cases where a charity originally properly registered as an educational charity turned out, in practice, not to act like one. An example is the Atlantic Bridge, registered as a charity in 2003, on which the Commission produced a critical report in 2010, on the grounds for example that “its activities promoted a particular point of view which was not uncontroversial, and were consequently not educational”. Atlantic Bridge was later dissolved by its Trustees.

I have asked Helen Stephenson to consider the issues relating to the IEA afresh, taking full account of the Commission’s conclusions in the Legatum case. It isn’t easy, but the integrity and consistency of the Commission’s guidance on both political activity and the nature of charitable education are precious commodities in a world of polarised, one sided opinions.

The full text of my letter to Helen Stephenson is attached below.

“Dear Helen,

Institute of Economic Affairs (IEA)

The Commission’s recently published conclusions of its case inquiry into the Legatum Institute Foundation provide welcome reconfirmation of the Commission’s guidance on the nature of charitable education for the public benefit. They therefore also shed light on the (to my mind) unresolved issues about whether the IEA is really an educational charity.

This has been the subject of correspondence between me and your predecessor and your colleague Anthony Blake. The last in this series is my letter of 8 November 2017, to which I discovered after waiting patiently for five months that I was not going to receive a substantive reply.

The recent ruling on Legatum does, however, emphasise afresh “the necessary balance and neutrality required of an educational charity”. This is crucial to the question of whether the IEA is or should be a charity or not and offers a clear prism through which to review the issues.

You have ruled that having a free trade perspective as a starting point is not in itself a problem with Legatum. Similarly, you have previously made clear that having a free market perspective is not in itself a problem with the IEA. But you go on to say of the Legatum case: “to be consistent with the charity’s object to advance education, a report of this nature (Brexit Inflection Point: The Pathway to Prosperity”, 4 November 2017) should make clear that a desired outcome of free trade is only one of a number of the potential political outcomes that might be sought. It should present balanced, neutral evidence and analysis explaining why it has chosen to adopt a free trade perspective over others”. The Legatum report is not in the Commission’s view balanced and neutral in this way, and so you conclude that the report could be seen as promoting a particular political view for the aim of a particular outcome and recommending specific government action that reflects this. You say that “failing to make clear that there are multiple potential Brexit outcomes and that free trade is one of a number of political outcomes, the report is not consistent with the advancement of education for the public benefit.”

Let us now apply this guidance to the work of the IEA.

In the IEA’s case, I do not accept that the real purpose, as defined in practice, is exclusively charitable anyway. The IEA does not merely have a general perspective of favouring the benefits of the free market as an approach to economics. Part of its real purpose as defined on its website is directed at securing lower taxes, lower regulation and what they call “freedom” in education and health, and all its contributors and partners are, they say, explicitly looking for ways of shrinking the state. This falls squarely and unequivocally within CC9‘s definition of “political”, because it includes (in the words of CC9) “securing or opposing a change in the law, policy or decisions of central government, local authorities or other public bodies.” I have also yet to meet anyone who shares the view put forward by Anthony Blake that this viewpoint is “relatively uncontroversial”. It is highly controversial, as a matter of objective fact. In my opinion, therefore, the purpose of IEA as explained in their own words is clearly partly political and cannot be exclusively charitable. It includes also the purpose of promoting a controversial predetermined conclusion that is inconsistent with your guidance on the nature of charitable education.

It is true that the IEA claims to have no corporate position, but this is undermined by the explanation of purpose as quoted above and by the fact that every report and article is in line with the partly political purpose of shrinking the state. When we hear an IEA staff member joining in public debate, we must assume that person is speaking on behalf of the IEA. When we read on the IEA website that, for example,  “The IEA releases a report debunking the myths surrounding the purposes of tax havens” and again the headline “We have tax havens to thank for rising levels of global prosperity” (6 June 2018) we are bound to assume unless explicitly told otherwise that this is endorsed by or represents the views of the charity. These are not placed in inverted commas by the IEA to suggest they are someone else’s views. There is no disclaimer saying in promotional press releases that these do not necessarily represent the views of the IEA as a charity.

What has changed since our previous correspondence, however, is that even if the predetermined viewpoint of the IEA were not partly political of its nature, (which in my view it clearly is), their work would still fall foul of the fresh clarification of your guidance. Even if the starting point of Legatum is legitimate, you say, a report on a controversial political subject should present balanced, neutral evidence and recognise the variety of possible outcomes that might be sought. Now the status and role of tax havens is a live and controversial political issue, not only in the UK but globally. So is a “report debunking the myths surrounding the purposes of tax havens” (IEA’s words) of a balanced and neutral type to fit the requirements applied to the Legatum case? No, as this description by the IEA makes clear, this is a one-sided debunking exercise.

Similarly, none of the IEA reports mentioned in my previous correspondence makes a serious effort to be balanced and neutral. There is no analysis of possible downsides to recommended policies, nor of other possibly desirable outcomes. Whether the subject is the growth of obesity, the taxation of alcohol, public health policies, taxation, tax havens, Sock Puppets, or solution to the housing crisis, you will not find a neutral and balanced contribution by the IEA, you will find in every case a one-sided and controversial contribution (whether adorned with footnotes or not) aimed at reducing the role of the state.

The IEA also claims that it does not “sell” policy. Well, it publicises these reports vigorously through the media, fields staff to promote and defend them, summarises them without placing the summary in inverted commas and gives no indication to anyone visiting their policy reports and prescriptions section of the website or press releases that these may not represent the views of the charity. If I describe to you the blessings and advantages of a particular Hoover and promote it through social media, in what sense am I not “selling” it?

In my view it is wrong to bend over backwards to argue that all this is consistent with your own guidance on the nature of charitable education. As the Commission’s guidance states, “promoting a specific point of view may be a way of furthering another charitable aim, but it would not be education”.

This is not just a re-hash of previous correspondence. The new factor here is the reaffirmation in the Legatum case of your guidance about charitable education, including the requirement to be neutral and balanced in the way in which an argument or piece of research is developed from what could in principle be a legitimate starting point. The truth is that, using the language you employ in relation to the Legatum ruling, the IEA does not “inform the public in a balanced and neutral way”. Its hallmark is precisely to sponsor and publicise contributions that “are based on selectively presented information that is designed to promote a particular point of view”, namely that the State must be shrunk – a partly political objective.

Like Widow Twankey, the IEA wears the clothes of an educational charity but the reality beneath is different.

The Commission does its best at the time of registration to distinguish between a proper charity and an organisation that should not receive charitable status, but sometimes the way the “charity” interprets its objects and pursues them in practice over time turns out to be non-charitable, and in that case there is no dishonour in the Commission’s revising its assessment accordingly.

I do not agree with the argument that, because there are charitable think tanks with different perspectives, if you move against one they will all fall down like dominoes. I do not accept that my criticisms of the IEA’s charity status apply to most other charitable think tanks. Surely every case should be looked at on its individual merits, to see if it follows the Commission’s guidance on what it means to be an educational charity? Some think tanks are charitable, some are not. Similarly, I do not agree with the sentiment that left wing people criticise the right-wing think-tanks while right wing people criticise the left wing ones, so they cancel each other out and it’s all politically motivated. On the contrary, in the world of politically controversial policy debate, the even handed, consistent application of the Commission’s public guidance is all the more important.

I am refraining from raising again here another aspect of the IEA that causes disquiet, namely the lack of transparency about who is donating funds to pay for their work. This leads to speculation that such donors might have some sort of financial interest in the views promoted by the IEA, which doesn’t help trust and confidence in charities as existing purely for the public benefit. The arguments and counter- arguments about that are an important but separate matter.

I do ask the Commission to reassess the charity status of the IEA in the light of their conclusions and guidance in the Legatum case.


Yours sincerely,


Andrew Purkis.”




Tina Stowell makes her Debut

The new Chair of the Charity Commission for England and Wales, Baroness Tina Stowell, made her first major speech to the NCVO Conference on 16 April. I find it the most interesting and thought-provoking speech made by a Chair of the Charity Commission for some years (though that is not a high bar). She also emphasised that she knows she has much to learn and is anxious to listen. Here are my suggestions of what she may want to listen and learn about particularly carefully as her thinking develops.

The speech contains some excellent passages. Here are my three favourite nuggets:

  1. “So why do people really want more transparency from charities? In my view, their demand for information is a proxy for something far more profound. They want proof that you are who you say you are.” This is original and insightful.
  2. “The public want to be able to trust that, no matter how you slice a charity, what you’ll find is a relentless focus on its charitable purpose. And that means demonstrating that the way charities prioritise, behave and conduct themselves is focussed solely on delivering the right results for the people they say they support.” Hear, hear.
  3. [The Commission needs to] “help make sure charities get it right before things can go wrong. And, make sure they are better equipped to respond in a way that promotes public trust when, sadly, human or systems failings do occur”. This is a relief and pleasure to read, replacing the flawed narrative that the Commission’s “essential” role is to be a policeman.

A second category of passages in the speech is similarly thought-provoking but does not stand up quite so well to careful consideration. For example, Stowell argues that people are less trusting of institutions and of those in positions of authority than they once were “not because our parents and gransparents were more naive [but] because people now have more evidence to prove their suspicions”. An interesting proposition, but a bit shaky. Actually, in some respects I am sure my parents and grandparents were naive, especially on many matters to do with sex and patriarchy. And much of the changes in attitudes are to do with cultural and economic winds of change rather than “evidence”. This matters, since Stowell wants to frame the mission of the Commission in terms of responding to the decline in trust, which therefore should explained with due care.

At another point, Stowell tries to contrast a supermarket, that can keep selling its wares even if its leaders are seen to fail, with charities, that have only their purpose. In fact, however, many charities can and do carry on when their leaders fail in some respect, because their services and other offerings for the benefit of the public continue in much the same way as a supermarket’s. Churches carry on. Universities paying Vice Chancellors gigantic salaries carry on. Oxfam and Save The Children and RNIB will carry on. Their continuing reasons for existence are entirely clear.

We now move into a third category of parts of the speech where to my mind red lights begin to flash. In another doubtful generalisation, she says of failing institutions where people believe their leaders are running them in their own interests: “those institutions have lost sight of their purpose: their purpose which goes beyond money-making or gaining power”. Unfortunately, it is ambiguous as to exactly which institutions she is talking about, but if she were understood to be referring to charities hit by recent scandals she would be preempting the Commission’s own inquiries and quite probably saying something unfair and untrue.

“At its heart,” Stowell argues, “charity is about attitudes, behaviours and qualities that unite us and that we can all sign up to. Qualities such as purpose, conviction, selflessness, generosity”. The problem with this formulation is that although it might just be true at a theoretical and philosophical level, charity as practised by charities only sometimes brings people together, as in a corporation’s “charity day” bringing the workforce together in support of benign charities that everyone supports. In many other cases they can be contentious and divisive, because many charities want to change the world and many other people, other charities and vested interests do not like it. One of the underpinnings of the erroneous notion that campaigning is against the spirit of charity is the quite popular belief that charity should be uncontentious. But in fact, much of the advancement of religion is contentious, the promotion and defence of human rights is contentious, the protection of the environment is contentious, the welfare of animals is contentious, the abolition of slavery was contentious, the assertion of women’s rights and children’s rights is contentious, and so on. Many charitable causes do not unite people, nor should they. Perhaps Baroness Stowell did not intend to say that the pursuit of charitable causes unites people, but the fact is that charity as practised in the real world is about attitudes, behaviours and qualities that often form part of the contention and lively argument that enriches democratic society. It is to be hoped that she will champion this part of charities’ contribution to our society more consistently than her predecessor.

Gareth Jones has already questioned, in Civil Society News, Stowell’s dictum that “the Commission’s job is not to represent charities to the public, but to represent the public interest to you”. Interesting and thought provoking again! The task of promoting the trust and confidence of the public in charities, and upholding the public interest in charity, cannot, however, be a one way effort of policing, cajoling and helping the charity sector, vital as that is. There should in my opinion also be a dimension of making authoritative contributions to public understanding and debate, from a position of expertise independent of the sector itself and independent of party politics, about the nature and significance of charitable endeavour, why it is in the public interest and how best its contribution may be safeguarded, all informed by the long, historic development of charity law in the Courts and in Parliament. The views of the public are not just a given to be explained to the sector by the Commission. They are a changing, fluid mass of complex feelings and opinions that can be shaped, better informed and educated, not least as part of the Commission’s role.

And, as Gareth Jones pointed out in Civil Society News, if the Commission’s leaders spend too much time and colourful phraseology bemoaning the failings and slumping reputation of the sector, they can run the risk of adding to the damage. To be fair, Stowell has plenty of positive things to say, too, but Gareth’s warning is a fair one.

Stowell is also in potentially treacherous territory basing her framing of the Commission’s mission on research into public trust and confidence. One of the huge difficulties is that most of the sample usually have only the haziest idea of what a charity is, which organisations are charitable and which are not. In the past, the Commission’s research has registered the effects on that part (maybe a third) of the sample that knows least about charities, of the fact that the media has been covering scandals involving charities. Hence, in the wake of the fundraising scandals, research a couple of years’ ago already placed trust in charities on a par with trust in the man or woman in the street, with a partial recovery last year. This research series never showed a time when people generally, as she implies, gave charities the benefit of the doubt; and, in the absence of such evidence, that might be one of those useful straw men. I urge Baroness Stowell to bring all her intellectual rigour to bear on the interpretation and use of this tricky data, not to put too much weight on it, and to take into account other indicators such as the pattern of charitable giving, volunteering, use of charitable services, and support of charitable campaigns, forming a rounded view.

Doing the very best we all can to enhance standards, improve public confidence and above all effectiveness of delivery to beneficiaries does not depend on a movement up or down these imperfect thermometers measuring public trust, nor on countering scandals affecting particular parts of such a varied sector from time to time. The mission is long term and permanent. Good luck to Tina Stowell and the Commission as they take this mission on to the next stage.

Her debut may be a mixed bag, but things are looking up when a speech like this is genuinely interesting, provokes hard thinking and provides at least a few nuggets of gold.

The Stowell Candidacy and the Public Interest

In a series of helpful tweets by Julia Unwin, who was on the Panel recommending Baroness Stowell as preferred candidate as Chair of the Charity Commission, she affirmed that there had been a rigorous process and that Stowell had given an excellent interview and received unanimous support from the Panel as the best candidate. Unwin received a cool response from Baroness Glenys Thornton, Shadow Health Minister in the Lords:

“It really is not seen to be an independent person you have appointed. Perception is important”.

Baroness Thornton has hit the nail on the head, leaving us all in the sector and beyond in a quandary.

Before continuing, and for the sake of complete transparency, I disclose that I applied for the post myself and was not shortlisted. I make no complaint; though I believed in my application, I could give you some good reasons for preferring others, and I have learned over the years that when one door closes, others open. But if you think that anything that I say on this subject is bound to be contaminated by sour grapes, please stop reading now.

For those still reading, it is ironical that over the years NCVO has taken the lead in insisting that perception (not necessarily reality) of party political bias is detrimental to the work and effectiveness of the Charity Commission. That was the core reason for their 2015 proposals for reform of the appointments system. Now they are saying that we should accept and welcome Baroness Stowell as Chair but continue to seek reform of the process. But right now the issue is whether or not to welcome, accept or resist the appointment of this particular candidate, in the light of Baroness Thornton’s irrefutable objection.

As NCVO has explained so well, perception of party political bias is a destructive force, blighting the legitimacy and effectiveness of the Commission. Suzi Leather will I am sure have given a wonderful interview to her Panel and has brilliant gifts, but her tenure as Chair was compromised in key respects by the fact that she was a Labour Party member and perceived to be close to the Labour Government. William Shawcross is also found by many to be a thoroughly good egg and a person of courtesy and integrity, but his perceived closeness to Conservative circles, his vocal hostility to the Labour Party in recent publications and the fact that he was only supported by a slim majority of the Select Committee split on party lines cast a shadow over his effectiveness. History therefore tells us not to place unlimited faith in a successful interview before a public appointments panel of excellent people like Julia.

After all, Suzi Leather was a mere Party member. William Shawcross, too, had never had a formal Conservative Party role nor been a member. But Baroness Stowell has worked in the engine room of the Conservative Party Leader and has herself recently actually led the Conservatives in the House of Lords. In my view, confirmed by Glenys Thornton, it is simply impossible to see that such a person can ever be perceived to be “demonstrably independent”, however professional and dispassionate she may well be in person, just as Suzi Leather was (as I know from personal experience) and just as I gather that William Shawcross was too. So we are now asked to welcome someone with a far more conspicuous and unambiguous party political background than any other Charity Commission Chair in history. Each time Baroness Stowell sits down as Chair of Charity Commission, a very large elephant will sit down beside her.

On her other side will sit a slightly smaller elephant. This is the unanimous verdict of the Select Committee on Culture, Media and Sport, led by its Conservative Chair, that they could not support her candidature. Only one of these reasons was the party political perception problem. Another was the very sparse knowledge and experience she was able to demonstrate of the charity sector. With our experience of the Shawcross years, and the continuing relative scarcity of people on  the Board with significant charity sector experience, this too is a non-trivial obstacle. Another was what the Committee unanimously felt was an unconvincing performance in answering their respectful and pertinent questioning. Everyone will for ever know that she was unable to convince even one member of the Committee to support her. What a dreadful way to start a public appointment.

Some including Julia Unwin have said how suspicious they are of politicians second-guessing the decisions of an independent Panel and rigorous process. But there are two sound  reasons why the Select Committee is assigned a role in the process. Firstly, the Commission is accountable to Parliament, not the Government of the day. Parliament, yes, politicians, across party lines, represent the public interest in a flourishing charity sector. The Commission is a non Ministerial public body, independent of the Government of the day. That is why NCVO assigned to Parliament  in their 2015 reform proposals a much more important role to a cross Party Parliamentary Committee than the one it has today. So Parliament’s considered view really matters.

Secondly, politicians may be more attuned to the issue of party political perceptions than the non-political Panel members. They may understand best how politically loaded the role of the Commission is: think of public schools, political campaigning, whether think tanks are charities, whether a particular religion is charitable, whether a charity infringes party political neutrality, and so on. They may understand that someone who has had such high profile party political roles has a mountain too steep and difficult to climb. Politicians have their own expertise in this crucial dimension, which is not to be pooh-poohed. And if there is a role for a Select Committee in the process for good reasons, Ministers should not carry on as if its careful inquiry had never happened.

My simple conclusion, disentangling these core issues from the fake news about the Panel’s views that was also circulating before being corrected by Julia Unwin,  is that this appointment is wrong. Each umbrella body, each charity, each person who treasures the public interest in the charity sector and wants it regulated in the most effective way possible should now ask themselves: do we keep tactical silence? Do we pretend to ignore the two elephants accompanying the preferred candidate as she enters the Commission offices in Petty France? Do we hope that the candidate will withdraw? Depending on your role, it is a quandary. But it is not the characteristic of most of civil society to go along too quietly with something that affects them and their causes deeply and which they believe to be wrong.

If the Charity Commission asks for your charity’s money, here are some relevant Trustees’ duties

Trustees should look at all proposals for spending their money – including proposals from the Charity Commission itself – in accordance with the duties of Trustees as set out by the Charity Commission.

The Charity Commission’s Chief Executive has made clear that the Commission intends to consult the sector about a levy on larger charities to pay for some of the softer side of regulation such as advice and, according to Civil Society News, for enabling schemes and permissions. A figure of £7 million per year has been mentioned.

I have challenged the rationale for this proposal elsewhere (“Should Charities Pay for Charity Commission’s advice?”, 13 January 2018, and “Paying for the Regulator: why the charity sector is not like all the others”, 2 August 2017. ). I now want to remind Trustees – in particular those of larger charities who would pay the levy – of relevant guidance from the Commission about their duties as they consider their response. It is all taken from The Essential Trustee.

“You and your co-trustees must make sure the charity is carrying out the purposes for which is is set up, and no other purposes.” (my italics).   So if someone asks you to fund a different purpose, however admirable, which is not part of your charitable objects and does not advance or support them, you must say no. Expenditure which does not meet these criteria would be a breach of your Trustee duties.

“You must make sure the charity’s assets are only used to support or carry out its purposes”. Hence it is not permissible to choose to spend part of your assets on something that does not support or carry out your purposes. Even more pointedly:

“You must do what you and your co-trustees (and no-one else) decide will best enable the charity to carry out its purposes” (my italics). So if there is in the view of your Board, and no-one else, a better way of spending the money for the long term good of your cause, you should not willingly spend it on a worse option.

These are some of the key considerations which Trustees “must” (not just should) have in mind, according to the Commission. They subsume issues of trust and obligation when it comes to donors who give their money for a particular charitable purpose. You have to be able to look into their eyes and tell them that you are using their donations for your chosen cause in the best way you can.

You will want to address the argument that, if the Commission is better able to do preventive work, the reputation of charity in general, including your charity, will be better protected.

So, for example, if you are a Trustee of a major children’s organisation, is a levy to the Charity Commission clearly a means of supporting your mission to children? More than that, is it the best available way of spending that money for that purpose? The same question applies to the cancer charities, those for disabled people, overseas aid, medical, Arts, museums, the environment, human rights and all the rest. Your duties are to pursue your charitable objectives exclusively, not other charities’ purposes nor the regulator’s purposes nor any political purpose unless it is in support of your own particular charitable objects.

For many years, regulation has been correctly understood as a balanced mix of preventive, awareness raising and corrective activity. Such regulation has been seen as for the benefit of society as a whole, and hence a claim on the public purse.

It is only relatively recently that the Commission’s Board under William Shawcross colluded with the simplistic notion that the “essential” role of the Commission was to be a “policeman”, setting up the scenario where Government says it will pay only for compliance and investigation. It is also only relatively recently that the budget of the Commission has been slashed as part of austerity economics. Despite that, the relevant Government Department (DCMS) now spends many multiples of £7 million on the National Citizenship Service which has not done too well at the hands of the National Audit Office, but says it cannot find an extra £7 million for the better regulation of the entire charity sector. This is just one example of priorities for the public purse that are open to challenge.

Trustees must ask themselves if these are immutable and permanent facts of life, or whether they might change. They should also ask whether, if they were to declare their charities willing to pay for some of the Commission’s regulation, these “facts” would indeed become immutable and permanent even if they were not so before.

Many Trustees of large charities will remember life not so long ago, when the Charity Commission’s budget was roughly twice its present size of £20 million. Was this so much better and so important to the effective pursuit of their charity’s purposes that it justifies the expenditure of some of their own charitable funds now, as a priority, in order to enable the Commission to do some of what it was previously paid to do via public expenditure? Much of this advice, these permissions and schemes will apply to a myriad of charities with completely different purposes, geographical scope and beneficiary groups from theirs. It may be an excellent purpose to provide such advice but is it their charitable purpose to pay for it?

The duties of Trustees as defined above by the Commission will require some careful, clear and tough analysis by the Trustees if the proposal that their charitable funds should pay for advice work by the Commission is embraced by the new Chair of the Commission and finally goes out to consultation.

Should charities pay for the Commission’s advice?

The Chief Executive of the Charity Commission, Helen Stephenson, is reported in Civil Society News of 10 January as suggesting that the sector itself should pay for advice to the sector and for the Commission’s enabling work, including the low level permissions and schemes which the regulator is also responsible for.

She believes that the Government should fund the regulator’s compliance and investigative work, which prevents wrongdoing. But advice and enabling are in her view another matter.

I struggle to see the logic of this. The purpose of advice and many aspects of enabling work by the Commission is precisely to make reputational damage and wrongdoing less likely, and encourage good practice that encourages public trust and confidence – the purpose entrusted to the Commission by Parliament. Prevention is much better than expensive corrective action when things go wrong. How unwise, therefore, to identify expensive corrective action as the right route for public funding rather than prevention and positive action to preempt problems.

It seems no more sensible than suggesting that no taxpayers’ money should be spent on public health programmes and preventive health, so that it is all spent instead on treating illnesses once they occur. Or that we should spend no taxpayers’ money on supporting families, preferring to spend far more on picking up the pieces when families implode.

Previously, Helen Stephenson was understood to be talking about a levy on large charities. That has its own problems. Why would large charities want to pay for all sorts of advice and enabling for charities and causes different from their own and  for which their money was not given? Why should a cancer charity and its donors pay for a local scheme to regulate a piece of land or a permission relating to a village hall? (Let alone whether they would want to pay for the sort of finger wagging “advice” they were getting from William Shawcross and other Board members?}

But perhaps the reference to “low level permissions” indicates an intention to propose charges for particular services, in addition to or instead of a levy on large charities? In that case, a lot depends on the justice and likely consequences of imposing such charges. For example, how many prospective or existing charities would be put off doing what would be best for them and for the reputation of charities in general? or discouraged from bothering with permissions of which they do not really understand the benefit anyway? Stop Press: I have just been told by the author of the Civil Society News report that it is a levy, and not individual charges, that the Commission has in mind at present.

In addition, such a levy will be seen (not least in the light of William Shawcross’s publicly expressed views) as the thin edge of a wedge that could in principle see all advice, guidance and assistance to prospective and existing charities as to be paid for. And then, in the end, how about some investigative functions, too? And what is the long term effect of incremental charging for what, historically, Parliament has seen as a valid (and really rather small) claim on public funds because it has wanted to encourage and promote charitable causes in the public interest?

The Commission’s frustration with its inadequate budget is thoroughly understandable. But a long term perspective is best. Artificial and illogical distinctions between compliance and preventive aspects of good regulation will not stand up to analysis. There is good reason to fear the thin end of a wedge. And if the Commission is to depend on the Government of the day for most of its funding anyway, the best arguments for a comprehensively different sort of funding that will produce a more independent Commission are undermined.

The Commission’s efforts to soften up the sector for a debate on a levy or charging are not going at all well. The new Chair, when he or she is chosen and assumes office, would be well advised to hit the Pause button and have a really careful think.



Three Cheers for Vicky Browning. Fight the DCMS gagging clause.

Here we go again. The Department of Culture, Media and Sport, now the lead Department for civil society, has defended a gagging clause in its Tampon Tax grants programme preventing the money being used for advocacy, awareness raising or campaigning of any kind. Yet this is a grants programme aimed at tackling violence against women and girls, supporting mental health and well being, and reducing drug and alcohol abuse!

Three hearty cheers for ACEVO’s chief executive, Vicki Browning, for demanding the withdrawal of this clause. She explains that awareness-raising and advocacy must be intermingled with practical work when it comes to addressing sensibly these sorts of issues. They thrive in an atmosphere of secrecy and fear behind closed doors. They thrive on ignorance. The voices and experiences of sufferers is an essential ingredient if state agencies and the public are to deal with these matters more successfully. This is completely lost on the hapless spokesperson for DCMS who says:

We are committed to ensuring that taxpayers’ money goes to help good causes and is not used for political lobbying and campaigning”. In a moment of pure farce, the passage in the grant guidelines encouraging applicants to engage in awareness-raising as part of tackling Violence Against Women and Girls is, it turns out, a “mistake” and is going to be withdrawn! The official who included awareness raising as an integral part of the good cause of tackling violence against women and girls was, however, 100 per cent correct and it is the ideologues of gagging who are making the mistake.

It is pure nonsense to suggest that taxpayers’ money does not or should not go to influencing, advocacy and awareness raising in pursuit of Government policy. Many millions of pounds went from DFID under Justine Greening to integrated programmes of work to combat violence against women and enhance women’s rights and opportunities, making her and DFID world leaders and a great force for good. Such work continues. The new Secretary of State for International Development, Penny Mordaunt, is particularly keen to expand work in support of disabled people in developoing countries. I am quite sure she will understand that this includes amplifying the voices of disabled people and giving them greater agency and control in influencing the way they are treated by state agencies and others. We shall surely not be returning to the patronising top down charity of Dickensian times where the beneficiary simpers with gratitude and says nothing?

In another Department, Health,  it has long been understood that public health policies are often better promoted by independent charities than by the Man in Whitehall alone. Taxpayers’ money rightly flows via the NHS and via grants to charities into awareness raising of all sorts of diseases and health hazards. It would indeed be rather stupid to say that the only legitimate use of taxpayers’ money is to treat the symptoms and suffering after prevention has failed.

Domestic violence and tackling modern forms of slavery have been causes with which the Prime Minister herself has been very closely associated. In that work she knows very well how vital is the experience and knowledge of actual sufferers, brought to bear on policy and practice alike through the expert testimony of the organisations that work with them. To deny voice and awareness-raising is to impoverish policy and degrade the Government’s admirable efforts to change things for the better.

Setting up a false antithesis between “good works” on the one hand and “political lobbying and campaigning” on the other may be good enough for inexperienced SPADS but not for grown up people in Government, who know that awareness, voice, influencing the decisions and practices of the Police, prison service, social workers, and adjusting the policy frameworks in which they work, is all a fundamental part of tackling the horrible violence, mental suffering and abuse that goes on behind too many closed doors.

The narrow ideology of the gaggers is harmful, the enemy of good policy and the vital role of charities in helping to shape collective decisions and give voice to the excluded.

Vicki, please keep going. DCMS: please think again and do the right thing.

Ethics, Values and Campaigning: a Reflection

Is it ethics and values that motivate campaigning for a cause? What is the difference between believing that our cause is right, and being self-righteous? What part do ethics and values play in the way in which we pursue our cause, as well as the cause itself? Should civility be a core value of civil society? Is it ethical for a charity campaign to be motivated partly by the need for money and supporters?

If these questions interest you, read on!

  1. A few days’ ago I was lucky enough to be in a group considering this topic in the appropriate surroundings of the Friends’ Meeting House, Euston. We had been brought together by the Sheila McKechnie Foundation’s excellent Social Change Project, whose contact details are given below. Here are reflections that I have taken away.
  2. Is it ethics and values that motivate campaigning for a cause? They are a precondition but not sufficient by themselves. Some people who share much the same ethics and values as activists may be into service delvery, watch a lot of TV, or be absorbed in study or family instead. Others may end up campaigning for different, even conflicting things. For example, the two sides in the dignity in dying debate may share important values but have systems of beliefs and experience built on them that lead them to contrasting views about the best path to long term human flourishing. Others again may have quite different priorities: one person who campaigns on children’s rights can have broadly the same ethics and values as another who is preoccupied with environmental degradation. So anyone who says “I campaign for this cause because of my ethics and values” is saying something partly true but incomplete. Your experience of pain and joy, role models, religion (or lack of it), beliefs about what will change the world for the better and how best to achieve it, and subjective enthusiasms, all play their part, too.
  3. Similarly, believing passionately that our cause is right is not the same as being self-righteous. Our opponents are human beings who disagree with us but may well share many of our ethics and values. They may be just as well motivated as we are. They may have more experience than we do in some ways and understand considerations that we ignore in our own ways of thinking (which may sometimes be group think). We cannot assume that they are morally inferior. Too many of us campaigners, however, do sometimes fall into self-righteousness. If we do, we help justify the hostility of our opponents.
  4. Yet a clear sense of ethics and values, explicitly defined and publicly stated, is an important anchorage for campaigning organisations, as for others.
  5. For otherwise, there is no standard of behaviour against which the organisation as a whole and individuals within it can be held accountable. The history of campaigning includes examples where an ostensibly “successful” campaigner has left a trail of humiliated or angry colleagues and supporting staff because, fixated on the moral end, he or she has behaved badly to actual human beings in the same cause. We are only too conscious of this trap in the post Harvey Weinstein era. Explicit ethics and values help to align the public cause with organisational culture and personal behaviour.
  6. Equally, they help guard against a discrepancy between means and ends. If, for example, we contravene our stated beliefs in truthfulness and fairness, our causes will be vulnerable to being discredited. If we misrepresent or dehumanise our opponents, we invite them to do the same back to us and to others. Do we manipulate statistics, oversimplify what we know to be complex, cherry pick evidence that supports our message and ignore what does not? This is particularly important in the era of fake news, alternative facts and the coarsening of public discourse in rival social media echo chambers. If we lower our ethics and values to compete like with like, we shall lose out to the most ruthless and unprincipled.
  7. This is very difficult, because we want our communications to grab attention in a crowd. We need money. We may want to motivate our supporters and recruit new ones by engaging their emotions. We cannot bury our appeals in pedantic qualifications. But there is no good alternative to working hard for impact within a robust framework of ethics and values. The charity sector has learned this the hard way through the fundraising scandals, where excellent ends were let down by unethical means.
  8. The group pondered the helpful question posed a while ago by Karl Wilding of the NCVO: should one core value of civil society be civility itself? Is it realistic to deplore and excoriate the behaviour of institutions, such as predatory Corporations that commit environmental or human rights abuses, without assuming that the human beings working in them are inhumane and unethical as individuals? Is it ever justified to abuse and curse our opponents or political leaders as individuals as part of expressing the anger that drives many of our campaigns? Is it naïve to aim to be always civil, however passionately we believe in the rightness of our cause, particularly if we feel we are fighting a “war”? These deserve careful reflection as we define the shared ethics and values underpinning our organisations and campaigns.
  9. One other issue caused us some difficulties. There are particular ethical issues surrounding the role of campaigns on the part of medium and large charities. This is because such campaigns sometimes have mixed motives. They are partly trying to do what it says on the tin, such as (for example) bring about a better deal for some oppressed group, but at the same time they are trying to recruit new supporters and raise money in order to fill the charity’s tin. It is partly about sustaining a business model for the organisation and its wider cause as well as about the specific campaign. Fundraising and brand considerations, as well as policy analysis of need and impact, will be brought to bear on the choice of campaign. And in some cases, when the fundraisers and brand experts say so, one campaign will be dropped after two or three years, because another is needed to sustain the brand and the finances even if the previous one is unfinished. This all has its good side if it makes great organisations sustainable while promoting their cause in different dimensions, but the risks of lack of transparency, or causing cynicism about the motivations of campaigns, are there, and need managing in the light of the charity’s statement of ethics and values.
  10.  Similarly, for a wider range of campaigning charities, if I make a gift aided donation to a particular urgent campaign appeal, is it transparent enough to me if the gift aid goes not to the campaign but to the general running costs of the organisation (as it sometimes does)? This is another set of issues where what is right and in the best interests of the cause is not always straightforward and where a statement of ethics and sturdy values can be an essential compass
  11. If you would like to follow or contribute to The Social Change Project’s developing thinking on these questions – and other aspects of changing the world through non-party political activity – please go to their website at http://smk.org.uk/social-change-project/ .



Andrew Purkis.                                                                  November 2017.


Should Charity Boards “reflect” or “represent” the communities they serve”?

In response to the generally excellent report Taken on Trust, about the nature and competencies of Trustees, the Charity Commission has said that “Boards are not reflective of the communities charities serve”. NCVO has said: “Trustees are drawn from a narrow cross section of society, and as such boards rarely reflect the communities they serve”. ACEVO likewise says: “civil society leaders – whether executive or non-executive – should be representative of the communities they operate in and the people they support”.

I am fortunate enough to serve on the Board of ActionAid International, the most wonderfully diverse Board led by a formidable African woman as Chair and a formidable Italian woman as Vice Chair, and I need no persuasion of the blessings of diversity. I am particularly shocked by the finding that in the Taken on Trust sample, men outnumber women as Trustees (and as Chairs and Treasurers) by two to one. But we have to recognise the difference between being having a suitably diverse range of skills and experience and being representative. They are not the same.

Part of the problem is indeed that Boards are all too reflective and representative of the deep seated patriarchy and class inequalities that unfortunately characterise their surrounding communities and society at large. I can understand why the Charity Commission et al are not proposing feminism and egalitarian reform as their chosen solutions, but let us not suppose that changing techniques of Trustee recruitment and establishing registers are likely to make a huge dent in the weaknesses of society that are in turn reflected in charity Boards.

Morevoer, each charity exists for a specific cause. The Board has a job to do to promote that particular cause as effectively as possible. So when we say they should be representative or reflective of the community they serve, we need to ask: “which community?” Remember that Taken on Trust tells us that a large majority of charities have 3-5 Board members. They all exist for the public benefit, but 3-5 people can hardly be representative of the general public. So of what should they be representative? Some charities have the purpose of conserving some sub species of nature, or promoting a recherche branch of research or learning, or advancing a particular religion. A Board that is the best for doing that may be people who are interested in the relevant sub-species, or branch of learning, or constitute the worshipping community (sometimes very small, sometimes very patriarchal) from whom the Trustees are drawn. If you like, they constitute a relevant community of enthusiasm for the purpose of those charities, but there is no way they can be reflective of the population of England and Wales nor of any geographical community. It may be that those who are saying Trustees should be reflective of the communities they serve are thinking of a typical social care organisation delivering services in a particular place, but in fact the largest percentage of the charities analysed by Taken on Trust were in the category of “culture” (about 20 per cent of the whole) and the runner up with about 15 per cent was religion.

Boards also crucially require necessary skills, as astutely analysed in Taken on Trust. The skills gap most often cited by Trustees was legal skills. But if you need to add legal skills, are you likely to choose anyone other than a qualified lawyer with time and inclination to help, perpetuating the predominance of people with higher educational qualifications and above average incomes? Some other skills gaps, not all, will tend to point in the same direction. Skills versus representation is a familiar dilemma for many charities considering the future of their Boards.

As NCVO knows from its own history, trying to make Boards “representative” has in the past caused huge headaches for itself and many other charities.  Many is the medium to large charity that has laboured with an unwieldly and ineffective Board because the Board is trying vainly to be representative of all the geographical or thematic interests of the charity, or be “democratic”. One governance review after another has concluded that the Board should be relatively small and focus on the right mix of skills to run the charity. For many medium or larger charities, the representative and reflective bit is far better achieved by a larger Council or Assembly, whether sovereign or just advisory, so that the Board can be a smaller body of do-ers with the right mix of skills. Please let us not forget all those hard-learned lessons and insist that the Board itself must be representative or reflective of a wider public. Public confidence and trust does not in my opinion depend on a Board being “representative”. It depends on whether it has the right skills and experience to do its job well.

Now when considering what is the best mix of skills to enable the Board to fulfil its functions, diversity is indeed key. An old boys’ network is unlikely to be the answer. Diversity of experience, skills and mindset, all geared to pursuing the particular cause of the charity, is a blessing on which far too many charities are losing out. More power to the elbows of all those following up Taken on Trust in this spirit.  But please can we understand that this is not at all the same as saying that Boards should try to be representative of society? Thereby hangs many a sad tale.


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
Page 2 of 3
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.
Page 3 of 3
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
Anthony Blake
Anthony Blake Regulatory Compliance Rccorres1@charitycommission.gsi.gov.uk

And here is my reply to Commission dated 8 November

Dear Mr Blake,


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.

The Charity Governance Code: we should celebrate and promote it, but a few points deserve further thought.

The Charity Governance Code, launched in July, is an excellent and very useful piece of work that deserves to be widely promoted among charities of all kinds.

  1. A large majority of the difficulties into which charities sometimes fall is attributable to flaws in governance. So the Code’s dull title belies its vivid relevance to charities’ effectiveness and good reputation. I agree with all its fundamentals and its balanced coverage. It is usable and useful to real life Trustees. It is good that it has chosen to be stretching, setting the good practice bar high. I shall not go into the detail of all the things I like, as there are so many. The excellent Chair of the Group that produced the report, Rosie Chapman, and her team drawn from umbrella bodies, have done an important job for the sector well.
  2. There are nevertheless a few issues that might benefit from further reflection, adjustment or elaboration – either in the next version of the Code itself or in accompanying guidance that might be offered by umbrella bodies.
  3. Firstly, is the document sufficiently accessible and evidently relevant to those charities that do not think of themselves as charities with Boards. For example, charities for the advancement of religion (at least one in six of all charities) may often not think of themselves in this way. Is the preamble and the “marketing” of the Code sufficiently geared to overcoming this problem (The Essential Trustee takes more trouble over this)? Has there been careful consultation with networks of churches, mosques and the like to ensure that this Code is perceived to be relevant to them? Because it really is. If such consultation has not yet happened with this and other sub-sectors who are charities but may not think of themselves like that, perhaps it should take place now.
  4. Secondly, more than once I felt that the importance of putting the long term interests of beneficiaries first was under-stated. There are lists in the Code where beneficiaries are treated as if (it seemed to me) on a par with donors, the public, and other stakeholders, but they should not be on a par. Donor or public preferences should not be wagging the dog. To take just one example, the Trustees of the Council for National Parks have their work cut out trying to protect and promote the interest of all those who benefit from National Parks in particular as their fundamental priority (not just one “stakeholder” among others). The (valid) case for a wider approach where Trustees are also aware and respectful of donors, take into account public opinion more generally and the wider interests of the charity sector, surely needs to be located more clearly within that framework?
  5. Indeed, the Code or supplements to it could also add some guidance on how conflicts between the interests of a charity’s beneficiaries and the interests or views of other stakeholders should be approached? They happen.
  6. Thirdly, the Code suggests that Boards should have the possibility of merger as a specific point on their radar, but there is no mention of de-merger, or spinning off subsidiaries or new charities to focus on a particular specialism. Why not? Many excellent developments in the charity sector have resulted from de-merger: witness all the important bodies, now independent, spun off from NCVO over the years – Age Concern, YHA, CABx, BOND, and many others. Preoccupation with merger is one-eyed.
  7. Fourthly, I felt there was not enough emphasis on the familiar point that those elected to a Board by a particular constituency must put the collective interest of the charity first, not just the sectional interest which they “represent”. This mistake is the source of so much woe that it may deserve special mention in the Code?
  8. Fifthly, so much good material is included about delegation from Trustees to staff in larger charities that it seems churlish to ask for more. But I felt that the problem of Trustees (including but not restricted to Chairs) poking around in detail and getting all “hands on” in areas supposed to be delegated, thereby demoralising both staff and other Trustees, is so widespread that it might deserve a more emphatic mention. This is reinforced by the fact that finger-wagging at Trustees in the wake of the fundraising and other scandals may have unnerved Trustees and tended to encourage excessive interference.
  9. Another possible addition is how best to approach problems of interpreting the division of labour (Trustees/staff) in practice when the border lines are genuinely blurred. It is not enough to say that the borderlines should be clear when in practice they sometimes aren’t. For example, the wording of a larger charity’s public messaging, which is virtually continuous, is an operational matter, but it can (if it goes wrong) affect reputation, compromise values or have other impacts in the Trustees’ domain. And fundraising practices that seemed operational turned out to have major impacts for Trustees’ proper concerns. So should the Code or its supplements have more to say about how to cope with this dilemma?
  10. Finally, there might be a case for including, in coverage of the Board’s strategic review function, an explicit mention of reviewing the appropriate balance between practical action, service delivery, awareness-raising and advocacy/influencing, as means for securing the best long term results for the cause? (Yes, I know, thereby hangs a tale.)
  11. Those are some candidates for possible tweaking or elaboration. But the most important message is: along with the Charity Commission’s The Essential Trustee, this Charity Governance Code really can help charities do their work better. Let’s get behind it, promote and use it.