“Highly Opaque” or “Highly Transparent”: if you want credibility, you should aim for the latter

[Note: This is a repost of a blog first published at On Think Tanks, as part of its series on Think Tanks and Transparency.]

By Erika Perez-Leon

On June 29th, Transparify put out their 2016 think tank transparency report, detailing the levels of financial disclosure of 200 think tanks located in 47 countries worldwide. All in all, there has been significant levels of transparency in the think tanks evaluated, compared to previous years: more than 60 of the 200 think tanks are now highly transparent. To see the results, download the 2016 report.

Transparency is one of the main issues discussed at On Think Tanks and, in light of Transparify’s new report, we have published a new set of articles on the topic.

In the run up to the report, Keith Burnet, Chatham House’s Director of Communications and Publishing, wrote The road to transparency is not entirely straightforward: the Chatham House experience. Keith discusses the importance of not engaging in a quid pro quo relationship with their financial backers. This, he says, is essential to their independence and credibility. However, a much good-will as there has always been for greater transparency within the institute, it’s not always an easy endeavour, particularly given the size of the organisation and the scope of their work. “In the end, our method includes an overarching rule that recognises funding as it is spent and accounted for rather than as it is received.”

In The Value of Transparency in 21st Century Think Tanks: the Stimson Center approachBrian Finlay, President and CEO of the Stimson Center, writes about the context in which think tanks emerged in the United States: “Think Tanks were more than just a business. They were born in an era of public service and were dedicated to the betterment of society as a whole.” Their place in today’s development of public policy, though, has raised some skepticism about their impartiality, “As a think tank, it is clear that progress — measured by the impact of our ideas and actions— is only possible through trust. Transparency, particularly financial transparency, is vital to ensure public trust that institutions ‘practice what they preach,’ and live up to the highest standards of integrity and independence in their work.”

In, Assefa Admassie, Principal Research Fellow at the Ethiopian Economic Association,Open Policy Research’s founder, Jaime Gonzalez-Capitel, interviews Assefa Admassie, the Executive Director of the Ethiopian Economic Association and Ethiopian Economic Policy Research Institute (EEA/EEPRI), which has made one of the largest improvements in financial disclosure of any think tank worldwide this year. In the interview, Assefa shares information about the institute, their work, and their funding model. As to their approach to greater transparency, Assefa says, “EEA strongly believes that it should have prudent financial management systems. We have an external audit every 6 months, not just annually. So every December and every June we make sure the rest of the world can know we’re not hiding anything.” In Transparify’s 2014 rating, the organisation had only earned one star- a disappointment to them. Although they had never intended to be opaque about their finances, they had not published them. This changed for the 2016 report, when they obtained 5 stars and the status of “highly transparent.”

CEDOS, a Ukranian think tank, also scored highly on Transparify’s report. CEDOS works under the believe that in the age of information only information about processes and rules and the active participation of citizens can bring about change. As for leading by example, Yrina Shevchenko, Communications director at CEDOS, writes– “we cannot demand transparency and accountability from institutions and government without being transparent and accountable ourselves.”

Regarding current events, Tom Jeffery writes UK think tanks are transparent, but they need to show leadership during Brexit. In this post, Tom frames the importance of transparency in light of the UK’s recent decision to leave the EU. To avoid their alliances being questioned, think tanks must be able to proof that they remain independent and do not act as lobbyist for their funding partners. He quotes Dr Hans Gutbrod, Transparify’s Executive Director: “Transparency is a core democratic value. Taking money from hidden hands behind closed doors raises concerns about possible stealth lobbying, and is simply not acceptable in a modern democracy.”

As to the urgency of transparency today, Steve Goodrich, Transparency International UK’s Senior Researcher Officer, comments on the role of think tanks in today’s society and the responsibility that is attached to them. For this, he argues “[think tanks’] impartiality and expertise gives them an authority – entrusted soft power, if you will – that can be abused to favour private interests. Therefore, as with all parts of our democracy from government to business, think tanks need to be open and transparent about whose interests they are representing.”

As for reasons to embrace transparency, Assefa says:  “Organizations that want to be credible and faithful to their cause, they need to be transparent. Transparency is one of the elements, one of the variables in the equation. In order to build  trust among stakeholders, to create a proper and credible institutional image, think tanks should take transparency and accountability very seriously.”

More Think Tanks Embrace Transparency in the wake of Transparify’s 2016 Report

In the month since we published our 2016 report rating the financial transparency of 200 think tanks around the world, several think tanks have already moved their transparency forward or committed to greater financial disclosure in the near future.

The Centre for the Study of the Economies of Africa has become the first think tank in Nigeria to implement 5-star financial disclosure. CSEA was established in 2008 by Dr. Ngozi Okonjo-Iweala, a former Managing Director of the World Bank who also served two terms as Nigeria’s Minister of Finance. CSEA’s embrace of full transparency is important globally, regionally and nationally:

  • Globally, because it once again demonstrates that weak national governance structures and fragile security environments do not preclude full disclosure of funding by policy relevant NGOs working in such environments;
  • Regionally, because Nigeria as a country is a political, economic, demographic and intellectual heavyweight in anglophone Africa, so innovations and successes there reverberate far beyond its borders;
  • Nationally, because other think tanks in Nigeria now have a domestic institution modeling the gold standard for financial transparency, which raises the bar for all other players.

CSEA’s new funding page discloses all its donors, the precise amount received from each, and the purpose of each donation.

The Macedonian Center for European Training has become the third Macedonian think tank to achieve 5-star disclosure by uploading an annual report that includes extensive financial information to its website. The overall picture nationally in Macedonia remains mixed, with think tanks spanning the entire spectrum from highly transparent to highly opaque.

The Georgian Foundation for Strategic and International Studies has committed itself to achieving 5-star transparency by November 2016. GFSIS is one of the longest established and best known think tanks in Georgia, a country that emerged this year as the world leader in policy research transparency.

The Hudson Institute became a 4-star (broadly transparent) institution earlier this year, in the time period between our annual assessment and publication of the 2016 report. Their disclosure of additional information means that only four institutions in our United States sample still remain highly opaque: American Enterprise Institute, Earth Institute, Hoover Institution, and Open Society Foundations. A clear majority of large U.S. think tanks are now transparent.

Interested in increasing your own institution’s transparency? Check our brief how-to guide or get in touch with us.

Want to get updates on transparency and integrity in policy research and advocacy? Follow us on Twitter, and sign up to our mailing list.

Why Transparency Matters, according to the think tanks

While a number of media outlets reported on the release of Transparify’s 2016 report, numerous think tanks also released statements in response.

Chatham House’s Keith Burnet stated, “Think tanks can have an important role to play in providing objective analysis in the current political climate of change general instability, the rise of populist movements and a backlash against mainstream politics. At the same time, they have rightfully been subject to increasing public scrutiny. Indeed, it would be disingenuous and wrong of think tanks to promote their ideas without being open about the sources of the funding that supported their development and dissemination in the first place. The institute is required by its 1926 Royal Charter to maintain rigorous impartiality and objectivity across all activities and outputs. Transparify’s aim of encouraging greater financial transparency in the think tank sector is helping think tanks to put this goal into practice proactively.”

Transparency International UK’s Steve Goodrich stated, “The Transparify initiative evaluates and promotes financial openness amongst think tanks from all across the political spectrum...In a time when the public have little trust in their political parties and politicians, we all need to do everything we can to help provide confidence in the democratic process. It’s time we all embraced [openness] instead of hiding away in the shadows.”

SEI Executive Director Johan L. Kuylenstierna stated, “We believe transparency is essential for building trust and credibility. We provide full disclosure of our funding and invite our partners and stakeholders to assess our objectivity and hold us accountable to our mission.”

Maya Grigolia, Research Director at PMC Research stated, “We believe that transparency and accountability is not something unique but should be an inseparable part of every organizations nature. We are more than sure that it is the only way to progress and contribute to development.” 

Why does transparency matter to think tanks? A list of statements by think tanks on their transparency ratings, including links to the full text of each, is below.

THINK TANK REACTIONS

Also check out the contributions of several think tanks on our own blog, by scrolling down.  Transparify will begin re-rating think tanks in November 2017, and we look forward to being able to report even more transparent institutions in our next report!

Being more transparent is closely related to being better at communicating

By Iryna Shevchenko, Communications Director at CEDOS, Ukraine

CEDOS has always praised the principles of transparency and accountability, even though they have been long overlooked in Ukraine. In fact, these values were one of the driving forces behind CEDOS’s creation.

Fed up with inefficient decisions, a lack of evidence and high-quality research in Ukraine, we formed CEDOS believing that in the age of information only information about processes and rules and the active participation of citizens can bring about change. To understand this point, a short dive into CEDOS’s history is needed.

We rose to our feet only in 2013 but with institutional support we managed to complete a fair many projects shedding light on the previously opaque operations of institutions, bringing attention to violations of the law, fighting for effective government spending, highlighting the problems of different social groups, and exposing the transparency and lack thereof of in universities.

Clearly, as an organization, we cannot demand transparency and accountability from institutions and government without being transparent and accountable ourselves.  Hence, starting from 2014 CEDOS has published an annual public report on its web-site. The report includes a short overview of the organization’s main news, changes and obstacles, a short description of completed projects and accomplishments, and importantly funding for institutional development and for each project from each donor.

However, we overlooked one small issue – almost everything we did was published only in Ukrainian. Drunk with the ecstasy of new activities and opportunities for change, CEDOS forgot about the English speaking audience and was only concerned about the Ukrainian one.

With development and growth, we started paying more attention to the details. In a way, we settled down, became a more mature organization, and are now working on presenting our activities to a broader audience. Hence, we have rebranded, broadened our presence in social media, and launched our own media, watch-dog, open data and open source projects. In this process, we have started to translate our materials into English, and are currently working on a web-site redesign including its English translation. Notably, this year we have published our annual report both in Ukrainian and English. Given that 85% of CEDOS audience is from Ukraine, we had thought this would be a rather small step.

As it turned out, it wasn’t.

We were surprised and very glad to find out that our efforts were noticed and recognized by Transparify this year. For us, Transparify’s acknowledgement of our transparency is a good sign that we are moving in the right direction, and it is nice to know that we on the right side of history.

Roundup of Media Reactions to Transparify’s 2016 Report

On June 29, we released our 2016 REPORT documenting significant progress towards greater think tank transparency worldwide. With the report covering 200 think tanks in 47 countries, a full 67 think tanks from our original cohort were rated transparent (four- or five-stars), compared with only 25 in 2013. In addition, several think tanks in the United Kingdom and in other countries have become fully transparent. The long list of highly transparent think tanks, including many prominent institutions, underlines the momentum towards transparency worldwide.

The report received coverage in a range of outlets including Ghana’s 3 News, the UK’s iNews, TV news in the Czech Republic and Georgia, the Chronicle of Philanthropy, as well as in Reuters (international), illustrating that think tank transparency is of interest around the world.

On the occasion of the launch of the 2016 report, On Think Tanks published a number of posts about think tanks and transparency, a number of which we have also posted here:

The broad engagement from think tanks around the world (for 2015 reactions see here) highlights that transparency helps think tanks, in that it underlines that they have confidence in the integrity of their work.

Interested in increasing your own institution’s transparency? Check here.  Want to get updates on Transparify? Follow us on Twitter, or sign up to our mailing list here.

 

The Value of Transparency in 21st Century Think Tanks: the Stimson Center approach

[This post was first published at On Think Tanks]

By Brian Finlay,  President and CEO at the nonpartisan Stimson Center

Amidst the most contentious, high-stakes, and mean-spirited campaign for U.S. president in decades, it is difficult to overstate the level of political partisanship that has enveloped American policymaking. At once entertaining and exhausting, our contentious politics is having a remarkably corrosive impact on the state of good public policy. While this is intellectually lamentable, we should also recall that the inability of government to come together and solve big problems is having a real impact on our daily lives. From our inability to innovate solutions to the scourge of violence, or the rise of government debt, and growing tide of terrorism, good public policy has fallen victim to partisanship and power politics in a near perfect storm.

In the early 1900s when the modern think tank was conceived, the world faced a no less daunting array of threats to our common peace and prosperity. The onset of the First World War loomed. The global economy transitioned from one of seemingly unfettered growth to crushing recession. And here in the United States, government only began to seriously grapple with the nation’s deeply divided and shameful history on race relations. In this complex environment, think tanks were born to generate and share public policy solutions, to educate policymakers and the public, and to look beyond the short horizon of current policy to the long-term implications, threat and opportunities that may be looming. + Think Tanks were more than just a business. They were born in an era of public service and were dedicated to the betterment of society as a whole.

Today, the think tank industry has grown significantly from those modest beginnings. With more than 6,800 think tanks located in virtually every country, think tanks have come to occupy a prominent place in the development of public policy. This prominence has also opened up a significant degree of rightful scrutiny into the impartiality of these organizations. With few exceptions, the think tank industry has performed admirably. That said, the only equity the modern think tank can claim is its integrity, and in an environment of hyper-partisanship and a more competitive and rapidly shrinking resource base, the industry must be constantly vigilant against the reality or — even the impression — of fee-for-service findings. Building transparency into our business models is therefore essential to long term success as an industry.

According to a new study, nearly half of all think tanks worldwide are now financially transparent. Transparify, a non-profit watchdog, rated 200 think tanks in 47 countries based on their levels of online disclosure. Out of 43 leading think tanks in the U.S., only one-third were judged to be ‘highly transparent.’ I am proud to say that the Stimson Center was one of those think tanks.

Founded in 1989, the Stimson Center is a nonprofit, nonpartisan think tank devoted to addressing transnational challenges in order to enhance global peace and economic prosperity. The Stimson Center’s namesake Henry L. Stimson — served twice as Secretary of War under Taft and FDR, and also served as Secretary of State under Hoover. Known for his innovative ideas and pragmatic leadership, Stimson believed strongly in “pragmatic idealism,” the notion that progress toward peace is only possible through practical steps and strong U.S. engagement in the world. Today the Stimson Center carries on his legacy through our nonpartisan, innovative work addressing long-standing and emerging global challenges.

For nearly thirty years, Stimson has also built a remarkable record of success in innovating pragmatic steps to ideal objectives of peace, prosperity, and security. From helping marshal global opinion in support of global rules around the trade in conventional weapons and promoting effective practices into complex humanitarian operations, to building innovative technology solutions to the threat of wildlife trafficking, Stimson has emerged as a pre-eminent ‘impact tank’ that is making a meaningful difference — from the halls of U.S. Congress, to the United Nations, and beyond.

The movement toward transparency in the think tank space, indicated in Transparify’s latest report, represents an important trend and a recognition by think tanks of the critical public good they perform — including here at Stimson. Think tanks today act as trusted conveners of stakeholders in different sectors to solve complex challenges. They also fill a critical role to produce independent, scholarly analysis that provides a roadmap for policymakers and key stakeholders alike.

Addressing transnational 21st century challenges — from climate to conflict to cyber — requires stakeholders in all sectors to come together. Because the global challenges we face must be addressed by a concert of actors to ensure a durable solution, arguably there has never been a more important time for think tanks to add value in working to convene, inform, and elevate public discourse pursuant to a general good. Unless think tanks are seen as truly independent, non-partisan, and philanthropic actors, our impact will be vitiated — diminished by the hyper-partisan spirit that has made the services provided by think tanks so essential in the modern era.

As a think tank, it is clear that progress — measured by the impact of our ideas and actions— is only possible through trust. Transparency, particularly financial transparency, is vital to ensure public trust that institutions ‘practice what they preach,’ and live up to the highest standards of integrity and independence in their work. Think tanks must evolve and challenge ourselves to constantly meet the highest standards of integrity precisely because the modern think tank occupies a space of public trust in pursuit of a public good.

In the end, it is important to remember that think tanks are more than just another ‘industry.’ We are trustees of a historical commitment to good public policy. And the trust placed in us must be nurtured in part through a continued commitment to transparency.

The Transparify 2016 report is out

Transparify’s 2016 think tank transparency report, detailing the levels of financial disclosure of 200 think tanks located in 47 countries worldwide, is now online.

  • This year’s report has a special focus on think tanks in the UK. Almost two thirds of UK think tanks are now broadly or highly transparent (4- or 5-star), while only four remain highly opaque.
  • Dozens of think tanks from a diverse array of countries such as Germany, Ghana, Hungary, and Ukraine have made large leaps forward in transparency and have disclosed more funding data over the past year.
  • Transparency in policy research has become the norm in several countries, including the United States, Great Britain, and Georgia. However, other countries still lag behind.
  • More than 60 of the 200 think tanks are now highly transparent (5-star).

For more details, please see our 2016 REPORT and accompanying UK and Global PRESS RELEASES with media contact details.

Why is think tank transparency important? Nobody can answer that question better than think tanks themselves.  In addition to these perspectives, scroll down to see the views of Chatham House (UK),  the Ethiopian Economics Association and Ethiopian Economic Policy Research Institute (Ethiopia), and Transparency International UK.

Over the coming days, we will collect reactions from the media and think tankers worldwide and summarize them on this blog. For immediate updates on think tanks’ reactions, media coverage and other news, follow us on Twitter.

UPDATE (29 June, 7:30 GMT): The Hudson Institute (United States) have greatly increased their transparency in their 2015 report, as they just highlighted to us this morning. While their update came after we closed our assessments, please join us in congratulating the Hudson Institute on their 4-star transparency. There now are 30 think tanks in the United States that are highly or broadly transparent, and only 4 that are highly opaque. 

Why should we care about who funds think tanks?

By Steve Goodrich

Transparency International UK

A lot has been said in recent years about the corruption risks in lobbying and political party funding in the UK – from the revolving door to the appointment of Lords – however, there has been little work on the more subtle influencers in our political system: think tanks. For those who haven’t come across them before, the term ‘think tank’ describes a wide range of groups and organisations that examine some of the most pressing issues of our time, from climate change to national security and the economy. They inform national policy debates by researching topics and disseminating their findings through reports, events and online material.

Even if this is the first time you’ve seen the term used, you’ve probably heard of a number of think tanks before. For example, the Institute for Fiscal Studies regularly comments on announcements by the Treasury and their analysis of public spending decisions receives widespread media coverage. The International Institute for Strategic Studies is often involved in public debates about defence and security issues, such as nuclear proliferation and terrorism. And the Overseas Development Institute provides expertise on international development and humanitarian interventions.

In short, think tanks are everywhere and provide an essential independent voice on some of the most pressing topics of our time.

With this important role, however, there also comes the risk they can be used to exert undue influence over the terms of a debate. Their impartiality and expertise gives them an authority – entrusted soft power, if you will – that can be abused to favour private interests. Therefore, as with all parts of our democracy from government to business, think tanks need to be open and transparent about whose interests they are representing. This is why we at Transparency International UK welcome the Transparify initiative, which evaluates and promotes financial openness amongst think tanks from all across the political spectrum.

By assessing organisations against a simple and standard set of criteria, it provides an easily-accessible and comparable guide to who’s open about their financial backers and who’s not. This year’s results make for some promising reading, with over half of those evaluated receiving four stars or above and over 30 per cent receiving the maximum five stars for transparency. Despite this, there are still some who provide little or no meaningful information at all about where they get their money from. In a time when the public have little trust in their political parties and politicians, we all need to do everything we can to help provide confidence in the democratic process. Even if there is nothing untoward about the funding of these organisations and what they do, the status quo across all of our political system is towards greater openness, from corporates to candidates and from parties to politicians. It’s time we all embraced this instead of hiding away in the shadows.

Transparency is a key variable in any think tank's equation: Assefa Admassie of the Ethiopian Economics Association

By Jaime Gonzalez-Capitel

[Note: On Wednesday June 29th, Tranparify publishes its 2016 report with ratings of the financial transparency of 200 think tanks from around the globe. In today’s post Open Policy Research founder Jaime Gonzalez-Capitel interviews Assefa Admassie, the Executive Director of the Ethiopian Economics Association and Ethiopian Economic Policy Research Institute which has made one of the largest improvements in financial disclosure of any think tank worldwide this year. The following text is an abridged version of the full interview.] 

Q: Our readers may not be familiar with the work of EEA. Could you briefly describe your research portfolio?

A: The Ethiopian Economics Association under its research arm, the Ethiopian Economic Policy Research Institute, undertakes research in four major areas: Macro-economic issues, Agricultural and Natural Resources Management, Industry and Trade, and Poverty and Social Sectors Analysis.

But we’re not exclusively a research organization: we conduct capacity building aimed at different audiences. There are specific trainings for our members, but also short courses for the staff of federal and regional level agencies.

Q: Your organization is membership based. How has membership evolved over the last years, and what type of services do members demand?

A:We currently have between 4,000 and 5,000 members. Typically, they are individuals –economists – but we have a range of other categories that include institutional members, honorary members, and students. In terms of services, members can … take part in trainings … specifically designed for members. Unfortunately, members request more trainings than we can provide and… we simply can’t organize as many trainings as we wish!

Q: Ethiopia ranks 103/168 countries in Transparency International’s Index, yet your organization has opted for full financial disclosure. Why?

A: While I can’t comment on the global picture and Ethiopia’s position as I don’t know the parameters, EEA strongly believes that it should have prudent financial management systems. We have an external audit every 6 months, not just annually … to make sure the rest of the world knows we’re not hiding anything. The external auditors present their findings in a General Assembly, and this enhances credibility, improves trust and confidence. … We have nothing to hide, and in fact we haven’t withheld any information even in the past. When we saw the ranking last year we were a bit pissed off –we had everything, but we just didn’t have it on the website.

Q: How does the decision of embracing financial transparency relate to the management of EEA since its foundation? And how does it relate to the credibility of the institution and influence on policymakers?

A:To be honest we didn’t know much about Transparify until last year. I got an email from the executive board about the initiative and saw that we had obtained the rating of 1 star – that was the starting point. When I looked into the criteria we decided to post whatever information we had. This helps build our credibility and communicate that transparency and openness are core values for our organization.

Q: What have been the challenges in the process, and are there any disadvantages?

A:I don’t see any risks. We are obliged by our core values to be transparent, and I don’t think that there are any negative implications – this is of course yet to be seen in the future, but any rational person and organization would take this positively. You know, think tanks are not always clean. If you take my own country, there are serious debates within the government and between the government and civil society organizations. The government has suspicions about the role of these organizations and who backs them, but by disclosing and making ourselves transparent we will hopefully clear some of the doubts. I want to underline again that the only thing that is new to us is publishing on the website the information that we already had on hard copy.

Q: You direct an economic think tank with a very strong academic focus. Are you open to corporate funding as well? And if so, how do you think that would impact your activities and your reputation?

A: The private sector is one of our stakeholders … The good relations we have with the Ethiopian chamber of commerce and private companies are based in a basic principle: we don’t want their money to buy our results. We are professional researchers and experts and will not compromise our integrity.

Q: What do you recommend to other think tanks in Ethiopia and Africa?

A: My recommendation is that organizations that want to be credible and faithful to their cause, they need to be transparent. Transparency is one of the elements, one of the variables in the equation. In order to build trust among stakeholders, to create a proper and credible institutional image, think tanks should take transparency and accountability very seriously.

The road to transparency is not entirely straightforward

By Keith Burnet

Director of Communications & Publishing, Chatham House
@keithburnet


Think tanks can have an important role to play in providing objective analysis in the current political climate of change general instability, the rise of populist movements and a backlash against mainstream politics.

At the same time, they have rightfully been subject to increasing public scrutiny. Indeed, it would be disingenuous and wrong of think tanks to promote their ideas without being open about the sources of the funding that supported their development and dissemination in the first place.  

Transparify’s aim of encouraging greater financial transparency in the think tank sector is helping think tanks to put this goal into practice proactively.

In Chatham House’s case, the foundations for greater transparency were already in existence. We adhere to a set of principles for ensuring the continued independence of our research. The institute is required by its 1926 Royal Charter to maintain rigorous impartiality and objectivity across all activities and outputs.

Ensuring the institute adheres to this requirement is a principal responsibility of our Council, made up of individuals drawn from, and elected by, Chatham House members. Since the founding of the institute we have recognised the importance of avoiding any financial obligation that would undermine our independence and which, of course, would instantly damage our credibility. We also consider  the diversity and breadth of our funding base an essential element for protecting Chatham House’s independence.

The process of becoming more transparent has not been particularly easy. The publication of our all of our financial income details was not straightforward and raised new questions for us to grapple with: how best to account for a £150k grant given for a three year project? Do you report the entire sum up front in year one or as £50k each year for three years? What if the project runs over time? What if the grant is extended?

Multiply those questions by the 156 projects Chatham House is currently running in the context of nearly £17m income from over 500 individual sources. What is more, we must compile this information from the fundraising activities of eleven different research teams, our Leadership Academy and income from membership subscriptions, conference and event sponsorship, discretionary donations and publications.

In the end, our method includes an overarching rule that recognises funding as it is spent and accounted for rather than as it is received. The only exception to this is endowment gifts, where it is more transparent to recognise the full value of the gift as one sum at the time it is given.

Following a substantial institutional effort, Chatham House has made several key changes to the way it publishes sources of income:

  • an ‘our funding’ section on our website with a clear income breakdown
  • a full list of our donors based on recognised income to reflect how much of a specific donation was spent in a given financial year
  • a funding webpage for each research department (see, for example our Africa Programme updated on a regular basis to reflect current core and project donors

We recognise that a positive and constructive response to Transparify’s efforts can help think tanks improve public understanding of their otherwise relatively opaque working processes. This is why I am keen that Chatham House shares its processes and methodologies with other institutions. We will continue to improve these methods, as well as think about and be open to new ways to be as transparent as possible.

New Transparify report shows which think tanks are transparent – and which are not

Which think tanks reveal who funds them? And which keep their donors secret?

On Wednesday 29 June 2016, Transparify will launch a report on the financial transparency of 200 think tanks worldwide. We rated each institution on a scale from 0 to 5 stars based on how much information it reveals about where it gets its money from.

Transparify’s special focus this year is on think tanks in the UK. We have convinced some of the largest and best-known policy shops in Britain to disclose details of their funding, and look forward to honouring their commitment to transparency. Our UK ratings this year include 28 institutions, providing wide coverage of the entire UK think tank sector.

The report will give citizens, journalists and policy makers the ability to identify think tanks that are committed to transparency and integrity in policy research and advocacy. At the same time, it will shine a spotlight on those organizations that accept money from hidden hands behind closed doors.

Beyond the UK, Transparify has re-rated all think tanks covered in our previous reports. In total, we rated 200 think tanks from 47 countries in Africa, the Americas, Asia, Europe and Oceania, providing a unique overview of national and regional policy research landscapes and global trends in think tank transparency.

The results of previous Transparify studies have been covered by the New York Times, Washington Post, Financial Times, and over 20 other media outlets worldwide. Our initiative has been welcomed by major think tanks and transparency advocacy organizations.

Embargoed advance copies of Transparify’s 2016 report are now available. Interested editors and journalists are invited to contact us via Twitter, or by emailing our team members Dustin Gilbreath (global media enquiries) and Till Bruckner (UK media enquiries only). Members of the media can find more background on think tank transparency and why it matters here and here.

Transparent Donors, Opaque Grantees: High Time for a Nudge

While we are finalizing our ratings, we are here reposting a contribution that Hans Gutbrod previously published with Philanthropy in Focus, a platform by Worldwide Initiatives for Grantmaker Support

In recent years, donors have increasingly embraced transparency and accountability. Transparency seems to be on its way to becoming the new norm for donors. Yet at the same time, many nonprofit grantees are lagging behind. A recent study by Transparify, the initiative I work with, has shown that even among the world’s leading open data advocacy groups, over half are not fully transparent about who funds them. Similarly, despite significant recent improvements in that field, over half of major think tanks worldwide still do not fully disclose their funding online.

The cost of this opacity was brought home powerfully to me when I was working at a donor organization and needed to go to lunch with a colleague on the same corridor just to understand what work his program was doing with some of our grantees. We needed to talk to each other because sharing this basic information through an internal database was cumbersome and the data did not capture intent. As for the relationships of our grantees with other donors – who gave how much, when, and for what purposes – we usually simply did not know.

Grantee opacity causes severe problems for all stakeholders involved. For donors, it precludes effective coordination, leveraging of synergies and avoidance of overlaps. For grantees, working with blindsided funders leads to inefficiencies and cycles of over- and underfunding. For external stakeholders such as local government bodies, it makes it hard to identify who is doing how much of what, and when current funding is likely to run out. Finally, financial opacity undermines the reputation of integrity and credibility of the nonprofit sector as a whole because citizens are left wondering where all that tax-exempt money comes from, and what it gets spent for.

Transparent organizations are part and parcel of a modern democratic society, not an optional add-on; this applies to grantees as well as to their funders. However, in terms of transparency, some very good donors have a remarkable number of not-so-good grantees. How can the sector move forwards?

First, it is important to realize that the most useful location of information on projects is on the grantee’s website, where it’s visible to everyone – donors, potential partners, citizens and any other interested stakeholder. Crucially, compared to a donor database, the grantee’s website is far closer to the interface where the grant money (hopefully) benefits citizens, and thus the best location to render account to beneficiaries.

Second, donors can easily nudge their opaque grantees by making transparency the new default setting. The cost of doing this is negligible to both donors and grantees, as recent experiences in Georgia (Caucasus) have shown. There, two innovative donors, the Eurasia Partnership Foundation in Georgia and the ACCESS Program of the East-West Management Institute have recently added a single line to their grant application forms that asks potential grantees to provide a link to their own financial disclosure webpage. This nudges all applicants to update their websites and disclose information on who funds them, with what amount, for what purpose, to show that they align with the donors’ preference for transparency. Other donors are planning to implement similar changes soon.

There are many excellent arguments in favor of transparency. Some of the most compelling arguments have been put forward by grantees themselves, including by the Center for Global Development, Global Integrity, Natural Resources Governance Institute, Sunlight Foundation, Stimson Center, Transparency International Georgia, and the World Resources Institute. Equally, a compellingly simple gold standard for nonprofit transparency exists in the form of Transparify’s 5-star benchmark.

With a simple nudge – a one-line addition to the application form (see here and here for examples) – donors could advance such transparency. The first innovative donors are beginning to implement this change. We hope this will spread, so that transparency indeed becomes the norm.

Transparify to Re-Assess All Think Tanks in November

Transparify will begin re-rating think tanks worldwide on November 02, 2015. The assessment will cover all 169 think tanks that we have already rated twice for our previous flagship reports, in order to document their progress. Transparify assesses to what degree think tanks disclose who funds their research and advocacy, using a 5-star rating scale.

Transparify will this year for the first time additionally rate dozens of major think tanks in Britain and Australia. In Britain, we expect to be able to document huge progress from a low baseline. In Australia, the baseline was even lower when we last looked, but the trend there is also positive, with several think tanks reporting that they plan to disclose additional information shortly.

Our ratings process follows a strict protocol designed to ensure data reliability. To date, Transparify has released over 300 data points for think tanks and advocacy groups around the world, and has been widely endorsed. The method is replicable, and has been used by a number of external efforts inspired by Transparify's method. 

The full rating results listing all think tanks will be published in our annual flagship report in February 2016. In past years, our rating results have attracted wide media coverage, ranging from a front page story in the New York Times to the main evening television news programme in Namibia.

Over the past years, the field as a whole has taken huge strides towards greater funding transparency. We look forward to welcoming even more think tanks into the ranks of the transparent this time around!

The Transparify Team