The Charity Commission is looking into right-wing think tank the Institute of Economic Affairs, which produced ‘sock puppet’ research lobbying for government to restrict charity advocacy.
The Commission received a complaint from Andrew Purkis, a former Commission board member and chair of several charities.
Purkis wrote to Paula Sussex, chief executive of the Commission, saying that the IEA, a registered charity, did not appear to be carrying out any charitable activity.
The IEA has consistently lobbied government to prevent charities which receive public funding from lobbying government. It produced two reports saying that charities were being used as "sock puppets" by government to lobby itself.
The reports were cited by Matt Hancock, minister for the Cabinet Office, in his announcement that charities receiving government grants would no longer be allowed to use that money to advocate on behalf of beneficiaries.
Purkis said the IEA was in breach of Commission principles by refusing to reveal the funds it used for this political lobbying, and also said that promoting a particular economic viewpoint was not a charitable activity.
“We will consider the issues you have raised about the Institute's campaigning and political activities and whether it is acting in furtherance of its charitable purposes,” Sussex wrote back.
“I have therefore asked our Permissions and Compliance Team to take this forward and let you have a response after they have conducted their investigations.”
Purkis quoted Commission EU guidance which said: ‘If your charity does get involved in any political activity connected with the referendum, you should ensure that, during such involvement, you publicly acknowledge the source of your funding so that the reasons for your involvement can be fully assessed.’
“This principle applies pari passu to the contentious political activity of the IEA, trying to lobby government in favour of restricting use of government funds for charity advocacy and engaging in wider influencing work against "nanny state" policies relating to lifestyles and public health,” he wrote.
“Yet the IEA trustees’ report does not identify the sources of the donations on which the charity mainly relies, and this lack of transparency, especially in relation to the activities I have mentioned, has led to widespread allegations that vested interests such as tobacco companies or the food industry may be involved.
“I understand that Mr Christopher Snowdon, director of lifestyle economics has refused to disclose the source of the funding for his work. This infringes the guidance quoted above and detracts from the reputation of the charity as a contributor to public debate and policy-making.
“Secondly, my understanding is that promoting a particular view of economics is not in itself a charitable objective, and the IEA must carry out its charitable objective of contributing to learning and education.
“Again, my understanding is that learning and education is not understood by the Commission or the courts to be promoting a particular view or outcome. It must be aimed at a broader understanding, not acceptance of a particular prescription. Yet it seems that some of the political activities of the IEA involve influencing and lobbying ministers and politicians in favour of a very particular prescription such as introducing gagging clauses into grants to charities, or curtailing particular kinds of public health policies.
“If the promotion of free market economics were a charitable objective, it is clear that such activity could be a means of pursuing it, but it is not at all clear how this activity can be a means of pursuing the advancement of learning and education. So I request the Commission to investigate whether in respect of specific and contentious campaigning and lobbying activity the IEA has been acting properly within its charitable objects.”