The Charity Commission has issued an official warning to the Institute of Economic Affairs (IEA), saying that the think tank's report about creating prosperity after Brexit breached charity law.
But the IEA has in turn criticised the Commission, saying the move “has extremely widespread and worrying implications for the whole of the think tank and educational charity sector”.
Last December the Commission ordered the IEA to remove a report, Plan A+: Creating a prosperous post-Brexit UK, which was published in September 2018.
The regulator said that, in the case of the Brexit report and its launch event, the IEA had “sought explicitly to change government policy on an issue unrelated to the charity’s purposes – furthering education – which constitutes a breach of the Commission’s guidance on political activity and campaigning”.
The IEA removed the publication when it was sent a draft of the official warning, the Commission said.
The regulator has an ongoing compliance case open into the IEA, which is examining concerns about the trustees’ management and oversight of the charity’s activities.
Yesterday afternoon the Commission published the official warning, which tells trustees to implement a process to ensure that research reports and launch plans are signed off by trustees.
The Commission has also asked for written assurance that the IEA “will not engage in campaigning and/or political activity that contravenes legal or regulatory requirements as set out in CC9 (the Commission’s guidance on campaigning).”
‘Widespread and worrying implications’
In a statement, the IEA's chair Neil Record said the think tank would continue to challenge the Commission’s action and accused the regulator of being slow to answer its questions.
“The IEA is considering a range of options, as we believe this warning has extremely widespread and worrying implications for the whole of the think tank and educational charity sector,” he said.
“A precedent is being set: research papers – and their launches – which put forward policy proposals may now fall outside the parameters of what the Charity Commission considers acceptable activity.
“We will be working with the Charity Commission to address these points. Earlier this year, we asked a number of questions of the Commission relating to these regulatory matters and have yet to receive a response. We look forward to receiving such a response shortly to help inform our future activity.”
The IEA was previously reprimanded by the Commission in May 2017 for press releases it sent out after a general election was announced.
The Charity Commission has also taken action against another charitable think tank, the Legatum Institute Foundation; last year it ordered Legatum to remove a report it had published about Brexit.
The Commission found that Legatum's report had "crossed a clear line" when it published a compliance case report into its engagement with the charity. Legatum agreed to refocus the work of the project that produced its report.
The trade and competition lawyer Shanker Singham left Legatum to join the IEA last spring, and was involved with both reports.
Commission’s guidance for education charities
The Commission’s guidance for education charities emphasises the importance of balance and neutrality.
It also stresses that: “If the purpose of providing information or education is to persuade people to form specific conclusions, then this is not education.”
Charities with more than one objective can produce recommendations that are in line with another aim, for example protecting the environment.
“Promoting a specific point of view may be a way of furthering another charitable aim, but it would not be education,” guidance says.