Time to Tackle ‘Dark Money’ in Politics – As Voters Demand Transparency Over Britain’s Opaque Think Tanks

Voters believe Britain’s think tanks – the policy-writing research houses that often have charitable status – are opaque and need to open up about their funding, according to new polling.

A majority (59%) of the British public believe think tanks are not transparent, with only 19% of respondents disagreeing, Deltapoll polling for the Centre and Millbank Think Tanks has found.

A majority of people believe think tanks lack transparency in every area of the UK included in the poll. It goes for people of all ages, political leanings, voting intentions and social classes, with clear majorities for reform whichever side of the Brexit debate voters fall.

The research comes amid a growing debate about the role of Britain’s policy research organisations.

The findings appear in ‘Follow the Money’, a new report by Centre Think Tank delving into the scale of so-called ‘dark money’ – donations of unknown origin – fuelling UK think tanks, details of which Byline Times can exclusively share.

Researchers at the Centre Think Tank (funding details below) found:

• 22% of UK think tanks do not reveal their total income
• Just 32% of think tanks reveal all their funders more than £7,500
• Overall, right-wing organisations are less transparent than left-wing organisations – and yet have more cash

The authors propose a new funding transparency body which would support organisations to increase transparency, specific Information Commissioner’s Office guidance on donation transparency, and reforms to lobbying.

Dark Money Charities

‘Dark money’ is a concern with donations, whereby think tanks do not disclose some or all of their large funding sources, the report argues.

While US-based donor disclosures give some insight into the type of donations which organisations of this kind receive, it is only a small part of the big picture.

The Centre report claims that the activities of opaque think tanks has “damaged the reputation of the sector more generally and has increased distrust in the role they play within the policy-making process”.

Think tanks often have charitable status and hold political views at the same time – something which is allowed under Charity Commission rules. While being charities, they receive tax breaks and access to schemes including gift aid. By donating to a charity, donors are also able to write-off their donations as being charitable contributions, rather than ones with political aims.

Former Charity Commissioner and ex-ActionAid charity chair Andrew Purkis has argued that the Institute for Economic Affairs, for example, has an explicit purpose to “shrink the state” and that this “is political and their version of ‘education’ is promoting a predetermined and controversial point of view and cannot be a charitable education”.

Under the current rules, political activity is acceptable as long as it does not become the single purpose of the charity. The IEA argues, however, that it “runs summer schools, publishes books, and other educational content”. 

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The Centre paper argues that dark money is a particular issue on the right. The free-marketeer Adam Smith Institute is one such think tank which does not release its donors publicly. It has published papers backing a privatised healthcare system, radically slashing the number of civil servants, and opposing minimum tax levels for corporations internationally.

Some donations have come to light over time. A recent Greenpeace/Unearthed investigation found that the Institute of Economic Affairs has received donations from oil giant BP every year since 1967, including during a period in the 1990s when IEA research appeared to cast doubt on the link between climate change and the burning of fossil fuels.

An IEA spokeswoman told the outlet: “It is surely uncontroversial that the IEA’s principles coincide with the interests of our donors.”

Reporting by the Guardian also found that, in 2011, “the Adam Smith Institute received £13,000 from tobacco companies” and “British American Tobacco, the company behind brands such as Lucky Strike and Dunhill, has confirmed that in 2011 it gave the IEA £10,000, plus £1,000 in event sponsorship”. 

Centre analysed hundreds of US disclosures and found that Policy Exchange has had the most donations from the United States, registering a total of $3,877,309 since 2000. The IEA brought in $3,095,291, and the Adam Smith Institute had $1,713,918.

“Whilst this shows there are large amounts of money coming in from the United States it also shows how little we know about their funding sources,” the authors found. “It shows a very small proportion of their overall funding.”

Undermining Net Zero 

The parliamentary Net-Zero Scrutiny Group has strong links with the Global Warming Policy Foundation (GWPF), which has produced publications on areas such as “the inadequacy of wind power” or “UK weather in 2022: a warm year, but unalarming”.

One of the Net-Zero Scrutiny Group’s founding members was also MP Steve Baker, a trustee of the Global Warming Policy Foundation. 

The Global Warming Policy Forum – rebranded in 2021 as Net Zero Watch (NZW) – is directly linked to the Global Warming Policy Foundation. The forum/NZW  “conducts campaigns and activities which do not fall squarely within the Global Warming Policy Foundation’s remit as an educational charity”. 

Yet the campaign group is still owned by the Global Warming Policy Foundation and is linked on its website. Much like the foundation, Net Zero Watch is highly opaque about its funding sources and expenditure. Many of the staff are shared between the two organisations and they share the same Tufton Street address in London’s Westminster.

Over the past four years, the American extension of the GWPF received $1.3 million from US donors and, of the £1.45 million in donations the GWPF itself received since 2017, at least 45% of this income originated from the US, according to openDemocracy.

This group claims that it refuses money from donors with interests in the energy sector on its website. However, an investigation has shown that it has accepted money from the Sarah Scaife Foundation⁵, which was set up by the heir to an oil and banking dynasty and holds $30 million worth of shares in 22 energy companies.

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Like GWPF, the Institute for Economic Affairs is also located at 55 Tufton Street and shared the same chairman as Net Zero Watch, Neil Record, until July.

The IEA has claimed that 14 members of Boris Johnson’s Cabinet – including three holding the great offices of state – were “alumni of IEA initiatives” while former Prime Minister Liz Truss’ infamous budget is widely speculated to have had direct influence from libertarian organisations based on Tufton Street such as the IEA and the nearby Adam Smith Institute.

The paper cites allegations that the Institute of Economic Affairs “arranged for US donors who pledged to donate £35,000 to have a private meeting with Steve Baker MP” during his time as a Minister. 

However, the Office of the Registrar of Consultant Lobbyists said that “explicit confirmation from IEA that they had not received payment – directly or indirectly – from the E Foundation or its members, meant that the IEA did not meet one of the key statutory criteria of consultant lobbying (payment by a third party)”. 

Think tanks appear to have considerable influence over UK Government policy.

Rishi Sunak recently admitted that the right-wing Policy Exchange group helped write the anti-protest laws passed under his and Johnson’s administration. The Conservatives’ 1922 Committee chairman, Sir Graham Brady MP, is also an unpaid director for the right-wing Centre for Policy Studies think tank. Dame Andrea Jenkyns MP is an unpaid director for Net Zero Watch. 

When he lost the Conservative leadership election in 2004, Sir Iain Duncan Smith set up his own think tank – the Centre for Social Justice, which the report authors argue was instrumental in developing welfare-cutting austerity measures.

Equally, the Tony Blair Institute – a global advisory group and think tank with a reported income of £99,000,000 in the year to October – is positioning itself to be a major influencer of a future Labour government, should Keir Starmer’s party be elected next year, alongside smaller outfits such as Labour Together.

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Behind Closed Doors

Peter Geoghegan, author of Democracy for Sale: Dark Money and Dirty Politics, who wrote the foreword for the paper, said “too many think tanks still operate behind closed doors, releasing little information about who funds them and why”. 

“That millions of pounds of dark money is swirling through Britain’s think tank world is deeply concerning,” he added. “That many of these anonymously-funded think tanks are registered charities only adds to the sense that the system is broken and in need of reform.

“Public trust in politics depends on everyone being able to see who is funding these influential political actors.”

For Torrin Wilkins, director of Centre and the author of the paper, “our polling clearly shows that the public sees think tanks as lacking transparency” and that “political parties should also take note of these results as the majority of voters from every party thought that think tanks lack transparency”.

“To tackle these issues, this paper calls for a new funding transparency body, reforms to lobbying rules and better guidance on releasing donor information,” he said. “These will help think tanks to be more transparent whilst increasing transparency with new rules. They also help the public to see which think tanks are transparent on their income sources.”

The report – which includes rankings of all think tanks’ financial transparency – will be released on Monday 6 November.

The Centre Think Tank describes itself as centrist and moderate. The report was funded by Garvin Brown. Brown was chairman of his family’s business, Brown-Forman, the distiller of Jack Daniel’s Tennessee Whiskey, for 14 years. He is also a venture partner at Ascension, a venture capital fund, and a senior advisor at Ispahani Advisory, advising family businesses on corporate governance. Centre publishes all its donors more than £100 here.

Update: An earlier version of this article said Sir Iain Duncan Smith founded the Centre for Policy Studies. He actually founded the Centre for Social Justice.

The Deltapoll research included 1,036 adults from Britain and was carried out between 19-20 October 2023.

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