Transparency around funding sources just one step to ethical funding

Published on 28 June 2016

Image of James Georgalakis

James Georgalakis

Director of Communications and Impact

Last year, for the first time, the Institute of Development Studies made public the name of every funder who gives us over $5000. We already regarded our financial transparency as pretty good, with publicly available annual accounts and clear and accessible information about our main funders.

This was always crucial to our values as a global development research institution as well as to our obligations as a UK registered charity regulated by the Charity Commission. If the new level of funder transparency seems somewhat arbitrary: Why $5000 and not £5000 or £500 as our threshold? – The simple answer is, we have responded to the campaign by Transparify.

Global rating system for institutional transparency

Transparify’s advocacy seems to have been launched in the context of US think tanks with allegedly shady political connections. However, since 2014 the group, funded by the Open Society Foundations, has focused on establishing a global rating system for institutional transparency. This hinges on the publication of a list of your $5000 a year and above donors to obtain the top rating.

Here in the UK most think tanks are not-for-profits with charitable status and we are strictly regulated by UK charity law, with its strong checks against party political influence, conflicts of interest and financial recklessness. There are no regulations and few recommendations around specific levels of funding that need to be reported but transparency is strongly encouraged. Despite all this, the regulator cannot entirely eliminate dramatic financial mismanagement by registered charities as demonstrated by recent high profile cases.

Funding and maintaining academic independence

For research organisations and think tanks, we face very real risks around academic freedoms and independence. Every institution needs to decide what the appropriate conditions are to accept funding and have a robust process for reaching sound funding decisions. It is the transparency around this process – how you decide – that is really key to an assessment of probity. The list of donors themselves falling within a particular financial band is far less helpful in revealing what pressures may be placed upon your integrity and the independence of your research and policy work.

Developing our approach to fundraising ethics

At IDS, long before we considered what it would take to achieve compliance with Transparify’s transparency benchmark, we began updating our Fundraising Ethics Policy and established a new funding ethics committee which I chair. The policy has been published on our website and sets out clearly how we reach decisions on who funds us and which sources of funding may not, under any circumstance, be deemed appropriate. We have a clear decision making structure that allows us to head off conflicts of interest, interference with our peer reviewed academically rigorous work, or inappropriate influence on teaching admissions.

So, we are grateful to Transparify for our five star rating and for the work they have done to make think tanks take a hard look at their funding transparency. However, I think they themselves would acknowledge the limitations of their chosen indicator of transparency around funding sources. I believe it is ethical fundraising practice and its transparent delivery and independent scrutiny, which should really determine levels of public trust and confidence. League tables make for a simpler story and do seem to have motivated some of us to achieve five stars, but our donors, partners and the public may be entitled to more from us than that.