Rhodri Davies, Programme Leader, Giving Thought

Rhodri Davies

Head of Policy

Charities Aid Foundation

The role of giving


20 October 2011

A new report released today by the Panel on the Independence of the Voluntary Sector raises concerns that the independence of charities and their ability to campaign against government policy is being threatened.

The curious case of the former Defence Secretary, Dr Liam Fox and his friend and “adviser” Adam Werrity has brought the issue of lobbying to the forefront of the political and news agenda.

Clearly in this case there was wrongdoing: Fox lost his job, the Cabinet Secretary Sir Gus O’Donnell confirmed that there had been a breach of the ministerial code and the “Atlantic Bridge” charity they set up as a vehicle for funding Werrity’s work was investigated by the Charity Commission and subsequently stripped of its charitable status.

What should be of longer-term interest to the charitable sector and to donors, however, is what impact the inevitable clampdown on lobbying will have on the work of charities that try to achieve change through influencing government policy, and what it means for the philanthropists who fund them.

The instinctive reaction to the Adam Werrity case is that it is clearly wrong for donors to use a charity structure as a way of circumventing rules on political funding and thereby exerting undue influence on UK foreign policy.

However, while this case is quite clear-cut, it is at one end of a spectrum on which there is great deal of grey area. Atlantic Bridge was set up with the sole function of providing a way that a group of wealthy individuals could fund one man to work directly with a government minister who also happened to be his friend, which is fairly obviously improper. However there are many organisations which do not flout the rules so blatantly, but which are still attempting to influence government policy in one way or another.

The most obvious area of uncertainty is around think tanks, many of which are set up as charities. This is something the Charity Commission has looked into in some detail before, and has even censured certain organisations for sailing too close to the wind.

The issue is that a think tank can be set up as an “educational charity”, but then do research, publish work, hold events and so on which espouse a clear ideological line (e.g. smaller government, market deregulation, localism etc), as long as it is not directly party political. Of course, certain ideologies will be more likely to be in tune with one party than another, so the think tank will have an implicit affiliation with one side rather than the other. However, this is acceptable. And think tanks are at pains to make sure that they have speakers and authors from a range of political persuasions in order to maintain plausible deniability if they are accused of having a party political bias. The flipside of this is that all think tanks like to boast of the influence they have, as this is how they convince donors to fund them, and this influence will almost certainly be with a particular party. Hence they have to walk a fine line between trumpeting their ability to influence a given party’s policy and being able to claim that they are non-partisan.

Some commentators still feel that the current situation is a fudge, and that allowing think tanks to register as charities simply offers an opportunity for donors to circumvent rules on political donations. The question is then where do you draw the line on what counts as acceptable lobbying? There is a real danger here of throwing the baby out with the bathwater: placing restrictions on the ability of organisations to lobby government might be positive in terms of reducing the ability of corporations and special interest groups to exert undue political influence, but it would almost certainly also impede the work of many charities for whom lobbying is a key method of achieving their goals. And it is only right and proper that charities are able to influence government, because this is often the only way to achieve real systemic change.

There is an eternal question that faces charities and philanthropists when deciding how to try and achieve their mission: do you go for depth or breadth? In broad brush terms, with a given amount of money it is possible to have a deep impact on a narrow range of people or a shallower impact on a much broader range.

An example of the former would be giving £100K to a local charity, which would almost certainly transform the organisation and the lives of the people it works with, whereas an example of the latter would be funding a piece of research into an issue such as financial exclusion, with a view to raising awareness and influencing government policy.

Neither approach is better or worse than the other, but we have to allow that both are valid. Any disproportionate clampdown on the ability of charities to lobby government could make it far harder to achieve broad change through influence, and this would be worrying. It is a concern that has already been raised by senior figures in the charity sector, and we need to ensure that any new rules on lobbying do not have unintended negative consequences for charities.