Transparency campaigners have called for thinktanks to be more open about their funding sources, after it emerged that some of Britain’s most influential ones received more than $1m (£787,000) from donations in the US in 2021.
They include the Institute of Economic Affairs (IEA), regarded as an inspiration for policies adopted by the Liz Truss government, and Policy Exchange – a conservative thinktank used as a platform by ministers to trail new measures and which recently incubated hardline immigration plans.
Steve Goodrich, head of research and investigations at Transparency International UK, said: “Ensuring transparency around who funds our politics is essential for public confidence in how our democracy works.
“It is particularly concerning that those organisations with the most opaque funding arrangements are seemingly those getting the biggest hearing from ministers. We would urge any thinktank seeking to influence policy development to declare their funding sources and be transparent about their governance.”
Policy Exchange, where Truss was head of economic and social policy before entering politics, received almost $100,000 from a foundation controlled by Leonard Blavatnik, who has joint US-UK citizenship and was listed this year by the Sunday Times Rich list as Britain’s third-richest man.
The organisation’s American arm received $34,786 in 2021 from the Blavatnik Family Foundation 2020 – which is run by Blavatnik’s brother Alex – “to support and advance the program of policy exchange between the UK and US”.
It also took more than $270,000 from the family foundation of Yan Huo, a hedge fund magnate with US citizenship who has donated more than £1m to the Tories, including £200,000 shortly before the 2019 general election.
The IEA’s US wing, American Friends of the Institute of Economic Affairs (AFIEA), has accepted $118,000 since 2020 from the Sarah Scaife Foundation, a private foundation set up by the billionaire libertarian heir to an oil and banking dynasty.
The IEA is believed to have inspired many of the free-market policies pursued by Truss and the then-chancellor, Kwasi Kwarteng. Some of her staff worked at the IEA, and she founded its political wing, Freer. Truss spoke at more of its events than “any other politician over the past 12 years” according to the head of the IEA.
The figures on US funding were identified by the investigative journalist Peter Geoghegan, who analysed recently published US tax documents.
Tom Brake, the director of Unlock Democracy, a pressure group campaigning for greater transparency from thinktanks, said the figures “underlined the urgent need to break the secrecy that surrounds the funding of many of the UK’s thinktanks”.
He added: “Some thinktanks exert huge influence over government. For that reason, we need to understand who stands behind them financially and what their agenda might be. They aren’t innocent bystanders.”
Policy Exchange and the IEA have long faced questions about their refusal to name their donors. They argue that they respect their backers’ right to privacy unless the backers wish otherwise. Critics say the lack of transparency allows unseen donors to influence political debate.
Policy Exchange did not respond to a request for comment.
A spokesperson for the IEA said AFIEA was a separate organisation. They added that AFIEA’s contact details were available on the IEA website. It states: “A United States donor wishing to support the work of The IEA may make a donation to American Friends of the Institute of Economic Affairs.”
A spokesperson for the Huo Family Foundation (UK) said it had made three grants to Policy Exchange – £100,000 in 2019, 2020 and 2021 – and that the funding was restricted for work in education.
They added that all grant giving is done by the UK Foundation, but there is a US entity, Huo Family Foundation (US), which owns 100% of Huo Family Foundation (UK). Neither Yan Huo nor the Huo Family Foundation had supported Policy Exchange since 2021.
A Blavatnik Family Foundation spokesperson said: “In 2020-2021, The American Friends of Policy Exchange received a donation totalling GBP100,000 ($132,762) from the Blavatnik Family Foundation.”
The Guardian has previously reported that millions of dollars were raised from anonymous US donors to support British rightwing thinktanks that were among the most prominent in the Brexit debate.
A Guardian analysis in 2018 established that $5.6m (£4.3m) had been donated to these US entities since 2008. They included the IEA, Adam Smith Institute and Legatum Institute, which are all part of the Atlas Network.
It has described itself as “a global network of more than 475 free-market organisations in over 90 countries to the ideas and resources needed to advance the cause of liberty”.
