Pulling Back the Curtain

Guest blogger Robert Brulle reports on his attempts to uncover the sponsors of think tanks engaged with the issue of climate change. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

Over the past forty years, there has been an enormous expansion of ideologically focused think tanks. These think tanks have become increasingly important in the development and advocacy of public policies on a range of issues. They have also increasingly been funded by undisclosed sources. So it is difficult to judge the validity of their assessments without full disclosure of their funders.

For example, my work has focused on think tanks engaged with the issue of climate change. What we see in this area is a group of think thanks that foster confusion about the science of climate change, and oppose action to address this issue. These think tanks have been bankrolled by funders known for their overall commitments to extreme free-market ideologies. Where funding can be traced, it has come from foundations driven by an encompassing ideological vision that posits government “interference” in markets as inherently illegitimate. Regulations and taxes are demonized, yet both are ingredients of proposals to reduce greenhouse gas emissions.

Despite thorough efforts, I could not find all of the sources of funding for organizations that mount climate-change denial efforts because the law allows secrecy. Many of the actors and organizations that have done so much to block U.S. actions to counter the global warming threat are able to operate in the shadows. Americans hear denial arguments funded on a grand scale by unknown wealthy manipulators.

This is a big problem for democracy. The U.S. constitution guarantees free speech, and the current Supreme Court enforces that right for corporations as well as individuals. In addition, current U.S. rules applying to “nonprofit” organizations make it easy for political activities to be supported on a huge scale in hidden ways. Nonprofit organizations not required to reveal their donors can simply collect funds and pass them to campaigns and think tanks. This hidden-funding system needs to change through the revision of nonprofit reporting laws. Without a free flow of accurate information, democratic politics and government accountability become impossible.

Powerful funders are supporting the campaign to deny scientific findings about global warming and raise public doubts about the roots and remedies of this massive global threat. So in this area, as well as many others, we have unaccountable funding flows to these think tanks from unknown sponsors trying to influence public policy in an enormous way, and that really runs counter to the whole notion of democracy and open debate.

Rating think tanks on their transparency is a first step in the right direction. This web site will allow citizens to see which think tanks are fully transparent about their funding sources, and those that hide behind a veil of secrecy. At the end of the Wizard of Oz, Dorthy’s dog Toto pulls back the curtain on the Wizard, who is manipulating the image of Oz. This exposes the true nature of power. I hope this web site will do the same.

Robert Brulle is Professor of Sociology and Environmental Science at Drexel University. 

Corporate Interests and Think Tanks – An Overview of Current Debates

How and why do corporations fund think tanks? How do think tanks manage potential conflicts of interest? How transparent and traceable is corporate funding to think tanks?

In order to answer these questions, Transparify has located, compiled and reviewed dozens of media stories and research papers. Today, we release the results of our work, an annotated bibliography on “Corporate Interests and Think Tanks”. This is the fourth and last in our series of think tank bibliographies.

Most authors suggest that many corporations fund think tanks out of strategic self-interest. For example,financial industry players in both the US and the UK are thought to systematically support think tanks that produce work that furthers their sponsors’ agendas within a context characterized by intensive lobbying efforts across multiple fronts.

Corporations’ possible influence on energy policy and climate change debates via their funding of think tanks has drawn particular attention. For example, one author claims that “climate change denial” by think tanks has been funded via trusts that enabled their donors to remain anonymous and untraceable despite over one hundred million dollars allegedly passing through such channels. Another retorts that the renewable energy industry too has vested interests, and that it sometimes promotes and defends these interests by… you guessed it… funding policy wonks. A third observer alleges that calls for financial disclosure by think tanks engaged in climate change debates have often been one-eyed as well as one-sided. (Here at Transparify, we simply believe that all think tanks should fully disclose who funds them, regardless of the policy stances that they take.)

Possible conflicts of interest also lurk when think tanks weigh in on questions of war and peace. In a recent guest blog on our website, Gin Armstrong explored such possible conflicts of interest that may have been at play when think tank experts with defence industry ties took to the airwaves in 2013 to discuss US military strikes against Syria. In recent days, she has voiced similar concerns with regard to policy advice being proffered on the ongoing crisis in Ukraine. Mind you, in an industry dependent on public sector contracts that is notorious for its revolving doors, even public funding for think tanks has not been immune against suspicions of self-interested dealings.

Does the tobacco industry really employ think tanks as mercenaries to fight on its behalf? Do car manufacturers really pay think tanks to talk governments into bailing them out with public funds? Indeed, can any think tank still accept funding from any source without immediately coming under suspicion of having been “bought” by some public or private vested interest?

We at Transparify don’t have the answers. For us, this little media review yields one conclusion: the think tank community may soon face a comprehensive crisis of credibility. If current trends continue, even the most sophisticated and methodologically scrupulous policy research outfits will find it hard to get their findings, ideas and policy recommendations taken at face value.

In an environment increasingly characterized by finger pointing, suspicion and paranoia, think tanks committed to intellectual independence and excellence in research need a way to actively signal to policy makers and the media that they deserve their trust and respect.

Transparify’s aim is to provide think tanks with a tool for signalling their credibility: a policy research institution publicly recognized for its exemplary financial transparency can hardly be accused of harbouring “hidden” agendas.

(For your reference, the bibliography discussed above is accessible here.)

Think Tanks and the Right to Information

Guest blogger Michael Karanicolas explores the applicability of the right to information to think tanks. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

The right to information is internationally recognised as a human right which lies at the core of democratic accountability. Since State institutions are funded by public money, it is only natural to expect that the people have a right to know how their resources are being spent. In a democratic society, access to information held by the government is vital to ensuring that the electorate is fully and accurately informed, and can properly engage in the decision-making process. The right to information also fosters trust in government, and promotes efficiency through robust public oversight.

The right to information is not limited to State institutions. International standards hold that the right to information should apply to any private organisations that receive State funding or perform a public function to the extent of that funding or function. It is clear that, where an NGO – a category that includes most think tanks – is substantially funded from a State budget, a duty of transparency should apply.

However, many think tanks and other NGOs are not supported by State funds, and here the question becomes more difficult. Most right to information laws do not apply to NGOs, but there are exceptions. Indonesia’s Public Information Disclosure Act applies to NGOs which receive funding from public donations or from foreign sources, as well as any that receive money from the State budget. South Africa’s Promotion of Access to Information Act, 2000 allows for requests to any private organisation, including NGOs, if the information is required for the exercise or protection of any right. Sierra Leone’s Right to Access Information Act, which was passed in late 2013, includes a similar provision.

Several countries also impose additional transparency requirements on organisations which claim charitable status. This makes sense as charitable status is, in essence, a tax subsidy provided by the State.

Transparency is generally a good thing. However, there are legitimate reasons why NGOs may be wary of these requirements. For one thing, many smaller or developing world organisations lack the resources to respond efficiently to access to information requests, particularly if their records are not digitised. Another issue is that NGOs will sometimes require a certain amount of space to operate. Advocacy strategies, for example, will often need to be kept under wraps in order to ensure their efficacy. Although it is conceptually dangerous to start expanding the legitimate limits of exceptions to the right to information, these ideas require development to be properly applied to the NGO sector. 

But beyond the legal requirements of what NGOs must publish, there are legitimate operational reasons to want to push more information into the public domain. If an NGO seeks to pressure governments or corporations into being more transparent, while simultaneously guarding the secrecy of its own documentation, it runs the risk of being labelled a hypocrite.

Good advocacy means practicing what you preach, even if this may lead to some operational difficulties. Strictly speaking, the right to know does not generally extend to information that is held by NGOs. But if an NGO seeks to be an effective voice for transparency, it may need to lead by example.

Michael Karanicolas is the Legal Officer of the Centre for Law and Democracy, in Halifax, Canada.

Think Tanks Would Benefit from Better IRS Rules for Nonprofit Political Activity

Guest blogger Emily Peterson-Cassin of the Bright Lines Project argues that all nonprofits would benefit from a clearer definition of political activity. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

Since the U.S. Supreme Court’s 2010 Citizens United decision, 501(c)(4) “social welfare” groups that can collect donations without disclosing their donors have proven irresistible to those looking for ways to spend millions on manipulating elections in secret. Through these groups, corporations and individuals were able to raise and spend more than 300 million dollars in the 2012 election cycle, leaving voters in the dark about their identity and unable to evaluate their motives.

To its credit, the IRS has recognized that this influx of dark money is a problem for its current system of classifying nonprofit entities.In November 2013, it proposed new rules for 501(c)(4)s that garnered more than 146,000 public comments – a record. The proposed rules are problematic for a variety of reasons, including that they don’t do enough to stop the dark money flowing into our elections. 

Nevertheless, groups that would be affected by the new rules overwhelmingly want the rulemaking to continue. 67% of organizations commenting or signing on to comments on the rules – the very entities the new rules would most affect –encourage the IRS to move forward in their effort to change the rules governing nonprofits, according to our analysis of the comments.

The existing rules not only have allowed groups to aggressively flout tax rules and pour millions into manipulating elections, but they also have constrained smaller groups dedicated to civic engagement. Too afraid of jeopardizing their nonprofit status, smaller groups have not participated in America’s democracy as fully as they are allowed. The IRS’ new rules seek to fix this imbalance by resolving the ambiguity of the current “facts and circumstances” test. Improving this definition will lead to more clarity for IRS agents as they work to monitor abuses and will help nonprofits engage confidently, knowing with certainty what they can and cannot do.

Currently, 501(c)(3) nonprofits such as think tanks are not allowed to engage in any political activity, and neither the proposed rules nor the Bright Lines Project’s suggested rules would change that.

However, the rules as proposed could jeopardize the daily operations of some 501(c)(3)s by complicating their relationships with (c)(4)s. Unless the same rules apply to all 501’s, organizations that fund or work with (c)(4)s could find that they are engaging in prohibited political activity merely by donating to a (c)(4), or possibly even linking to a (c)(4)’s website. 

That’s why the Bright Lines Project has advocated for clear rules that apply to all nonprofits.  Bright-line rules have the potential to greatly increase the amount of civic participation think tanks can undertake. 

The IRS has a long review process ahead, but should not lose focus on the realities that nonprofits face in navigating the confusion caused by the current rules.  The 67% of organizations that want to continue the rulemaking are resoundingly telling the IRS that they have taken a necessary first step. It’s essential that IRS continue the rulemaking and create a final rule that will help bring dark money into the light.

Emily Peterson-Cassin is the project coordinator of the Bright Lines Project, which was formed nearly five years ago to draft and advocate for clearer tax rules governing nonprofits. The project is housed at Public Citizen in Washington, D.C.

Think Tanks Have Little to Fear from New IRS Rules

Guest blogger David Earley of the Brennan Center argues that think tanks need not worry about proposed new tax rules limiting political activity by nonprofits. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

In the wake of the Supreme Court’s 2010 Citizens United decision, political spending by social welfare groups has exploded.  These entities, organized under section 501(c)(4) of the tax code, spent 256 million dollars in the 2012 federal elections, even though they are supposed to be operated exclusively for social welfare rather than for political purposes. 

Due to legal loopholes, these organizations are not required to disclose their donors.  Consequently, individuals, corporations, and unions can anonymously funnel millions of dollars into elections without fear that their identities will be disclosed to the public. This deprives voters of information that would help them interpret the messages they receive before the election and allow them to make informed decisions at the ballot box.  And without full disclosure, the public cannot monitor for improper relationships between elected officials and their political benefactors, opening the door to corruption.

Recognizing this abuse of the tax code, the IRS recently proposed new rules to regulate political spending by 501(c)(4) organizations.  The rules replace the current, ineffective “facts and circumstances test” with bright-line standards, which benefits both nonprofits and the IRS by clarifying what constitutes political activity.  The IRS is also considering adding rules to significantly limit the amount of political spending that nonprofits can undertake.  Under current informal IRS guidance, nonprofits can spend up to 49% of their budgets on political activity without endangering their tax exempt status; new rules could greatly reduce this amount.  The IRS may also expand the restrictions to other nonprofit entities, such as 501(c)(6) trade associations and 501(c)(5) unions, which also engaged in significant political spending in recent elections.

The new standard for what constitutes political activity should also extend to 501(c)(3) charitable organizations. Because many think tanks are organized under section 501(c)(3), some in these organizations might think this is cause for concern.  However, since political activity by 501(c)(3)s is already prohibited entirely, it is unlikely that the new rules will have a significant impact on them – they already are forbidden from getting politically involved in elections.  So long as the IRS’s new rules properly define what constitutes political activity, 501(c)(3)s have little to fear.

The IRS should be applauded for moving to rein in political spending by nonprofit groups.  As the Brennan Center explained in its comments, “The nonprofit form was created to foster organizations that are devoted to the general welfare of their communities, not to furthering partisan political goals.  The proposed IRS rules are needed to help ensure that the nonprofit form is not abused by those who want to anonymously spend massive sums on elections.”

The proposed rules are not without their flaws.  For example, the proposed rules consider nonpartisan voter registration – an important type of social welfare work that should be exempt – to be political activity.  But these faults are a reason to refine the proposed rules, not to abolish them.  The IRS should implement new rules to protect the integrity of both our elections and the tax code.

David Earley is a Counsel at the Brennan Center for Justice at NYU School of Law, a law and policy institute that seeks to improve American systems of democracy and justice. The Brennan Center describes itself as “part think tank, part public interest law firm, part advocacy group, part communications hub”.

Misconceptions About ‘Dark Money’

Guest blogger Adam Meyerson of The Philanthropy Roundtable makes the case for the right to confidentiality of donors giving to think tanks and other non-profits. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

A long legal tradition protects the rights of Americans to make charitable contributions without publicly disclosing them. This right to confidentiality in charitable giving is grounded in our constitutional freedom of association, and it is one of the most important elements of philanthropic freedom.

In a landmark 1958 Supreme Court judgment, the court held that the state of Alabama could not compel the NAACP to reveal the names and addresses of its members because doing so would expose its supporters “to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility” and thereby restrain “their right to freedom of association.” (see NAACP v. Alabama)

Our tax code similarly protects the confidentiality of individual contributions to public charities. In their 990 tax returns, public charities have to disclose their largest contributors, but this is for purposes of tax administration only. The Internal Revenue Service is strictly forbidden by statute from revealing these names to the public or even, with a very limited number of exceptions, to other government agencies.

Donors do have to disclose publicly their contributions to private grant-making foundations, which in turn have to disclose their grants to public charities. These transparency requirements help to protect against self-dealing and to make sure that foundation grants support genuinely charitable organizations.

Donor-advised funds, America’s most rapidly growing charitable vehicle, receive donations from individuals and then make grants to other public charities on the recommendations of the original donors. Like foundations, the sponsors of donor-advised funds are required to disclose the grants they make to other charities; this helps ensure that the grants are going to charities and not to for-profit or partisan political operations. But consistent with America’s historic confidentiality protection for individual donors to public charities, the sponsors can keep private their own donors as well as those donors’ individual grant recommendations.

This protection is sometimes misunderstood. For instance, conservative critics of the Tides Foundation, a liberal-left donor-advised-fund sponsor, have called it a system “to evade transparency.” Liberal critics of DonorsTrust, a donor-advised-fund sponsor for “organizations that promote liberty,” have labeled it as a “secretive funding network” and “dark-money ATM.” But the right to privacy enjoyed by contributors to donor-advised funds is no different than the right to privacy that governs the overwhelming majority of charitable giving.

There are multiple reasons to give privately. Many anonymous donors want to protect themselves from unwanted solicitations, to protect their children from knowledge of their family’s wealth, or to be able to visit prospective grantees and “kick the tires” without anyone knowing they are a funder. Still others, like the 1950’s NAACP donors, want the freedom to support controversial organizations without fear of reprisal or ostracism.

So-called “dark money” illuminates our free society.  

Adam Meyerson is President of The Philanthropy Roundtable and a board member of the State Policy Network, a capacity building service organization for America's free market, state-focused think tank community. This guest blog is an abridged version of an article that originally appeared on the SPN website.

Arguments for Aid Transparency Equally Apply to Think Tanks

Guest blogger Nicole Valentinuzzi of Publish What You Fund explores common space shared by the aid transparency movement and efforts to make think tank funding more transparent. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

Every year, Publish What You Fund produces an Aid Transparency Index (ATI) to rank the world’s biggest donors according to how transparent they are about the aid they give. The ATI has become the industry standard, assessing the state of aid transparency among the world’s major donors, while encouraging progress and holding them to account.

It is a fantastically useful tool for monitoring the progress made by donors with implementing their own commitments to make aid transparent. The ATI can work as both a carrot and a stick.

For example, in many cases, donors working to improve their aid transparency are keen to have their efforts reflected in the ATI. The deadline for collecting data for last year’s Index was 31st July, so donors had until the end of that month to make one final attempt at improving their ATI ranking – and several of them did, with a flurry of activity and phone calls in the final days of July.

Year-on-year, donors can improve either by making the information they already publish comprehensive for all their activities, or by publishing information items for the first time. This is fundamentally what makes for a good index - incentivizing those being measured to change their behaviour.

The good news in our field is that all the world’s largest donors have signed up to the International Aid Transparency Initiative (IATI), the only internationally-agreed standard for publishing aid data. As part of this commitment, they have said they will publish all their aid information to IATI by the end of 2015. (Our Aid Transparency Index also measures this commitment.)

This and other lessons learned by the aid transparency movement can also be applied to think tank transparency.

 So why do we bother?

Well, put simply, there is too little readily available information about aid, and this undermines the efforts of both sides, those who give and those who receive it. Knowing what is being spent where, by whom, and with what results is the basic foundation for increasing aid effectiveness.

Once all of the world’s largest donors are publishing to IATI, we’ll be able to track the money right down the development chain. Being able to follow the money from a donor all the way to the specific project it funds will make it possible to also track donor funds to individual think tanks in developing countries.

 Aid transparency is important because without it:

• Donor governments don’t know what other donors are spending or planning to spend, leading to the duplication of efforts in some areas and under-funding in others. Without aid transparency, donors cannot coordinate to achieve the maximum impact with their scarce resources.        
• Recipient governments struggle to know how much aid is invested in their country, let alone where and how it is spent.
• Civil society, including NGOs, legislators and citizens, who have the right to know what aid is coming into the country and what it’s being spent on, remain in the dark.

These arguments for aid transparency can equally be applied to think tank transparency, where it is just as important to be able to follow the money.

Nicole Valentinuzzi is the communications manager of Publish What You Fund, a not-for-profit organisation that campaigns for aid transparency. The campaign was originally launched in 2008 by a coalition of governance, aid effectiveness and access to information organisations.

When Think Tanking Hurts the Poor: Egypt and Beyond

Two decades ago, the Egyptian Center for Economic Studies think tank was formed with a ten million dollar endowment by USAID. According to the Washington Post, the think tank, which “gathered captains of industry in a small circle”, then advocated for a privatization program that eventually led to the sell-off of state assets worth 104 billion dollars. Apparently, less than ten percent of that value went into state coffers – the rest was lost to high-level corruption involving senior officials closely tied to the think tank. In total, the Washington Post reported, the losses to the Egyptian taxpayer of that privatization program exceeded the total amount of aid provided by the US to Egypt over the course of six decades.

While it would be facile to pin the blame for this sorry saga on a single think tank, it does highlight that some donor-funded think tanks can punch far above their weight when it comes to influencing political and economic decisions with massive implications for economic development and poverty reduction efforts. 

Throughout the developing world, donor-funded think tanks are now weighing in on domestic political debates on issues as diverse as democratic reforms, foreign affairs, military doctrine, economic governance and social policy. Having worked for a think tank in an emerging economy ourselves, we at Transparify strongly believe that think tanks can play a positive role in enriching national debates and decision-making, especially where there is limited capacity for policy analysis by other players. However, as long as most think tanks remain opaque, it will remain impossible for stakeholders in these debates to separate the wheat from the chaff.

Many think tanks in developing countries are predominantly or even exclusively dependent on foreign donors to carry out their work. Far from requiring these think tanks to be transparent, some donors – notably USAID – on occasions actively abet opacity by their non-profit grantees. Such opacity is not helpful at a time when developing countries are increasingly suspicious of donor-funded think tanks, a suspicion that often extends to all NGOs receiving support from abroad. For example, India is reportedly considering further restricting foreign funding for think tanks and other non-profits.

Policy decisions matter hugely, and developing country think tanks can play an important role in informing and improving them. Donors wishing to improve the quality and integrity of policy-making inside developing countries should do two things. First, donors themselves should disclose which think tanks they fund, with how much, and for what work. Second, they should require think tanks to be fully transparent about all the funding they receive before even considering their applications for grants. Financial transparency is not a panacea, but it is an important step on the road to making policies work better for the poor.

This blog is an abridged version of a longer piece written by Transparify that was originally posted on the website of Publish What You Fund, a not-for-profit organisation that campaigns for aid transparency.

A Rare Look at Italian Think Tanks

Guest blogger Anna Longhini provides a snapshot of the emerging think tank scene in Italy. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

Think tanks remain mysterious entities to most Italians.Conversely, in the Anglo-Saxon world there seems to be a much better understanding of what think tanks are, what they do, why they are relevant, and how they are funded. The first book on think tanks came out in Italy only in 2009; a chapter on Italian think tanks and the political system had been published in 2004. While foreign policy think tanks have a much longer tradition, some are comparatively new and take the form of “personal think tanks” linked to individual political leaders.This latter kind of dependency raises questions about the use of the term ‘think tank’ itself and creates some confusion within public opinion.

The two key players in the Italian foreign policy think tank landscape are the Istituto Affari Internazionali (IAI, since 1965) in Rome and the Istituto per gli Studi di Politica Internazionale (ISPI, since 1934) in Milan. A unique player is the Italian branch of the Aspen Institute, established in Italy in 1984 with a focus on transatlantic relations. Other, smaller think tanks mainly operate in Rome, Milan and Turin. All of these have less well defined activities, their main decisions are in the hands of their directors, and they are comparatively understaffed.

When I first started to research Italian think tanks, I found it hard to find financial information on their websites. When it comes to foreign policy think tanks receiving public money, we do have data on relevant national public funding in 2012 because some think tanks are listed among the so-called “EntiInternazionalistici”. This means they are under the control of the Ministry of Foreign Affairs, and as such are listed in a report released by the ministry that disclosed these relationships as part of a wider open government effort. At the same time, we know that major corporations fund some think tanks, but we do not know to what extent and on what terms. Is such private sector funding just a matter of generating visibility? Or do companies expect something in exchange? These questions remain unanswered.

Behind Italian think tanks there is a world composed of experts. These experts’knowledge on current international issues seems fresh and appealing when compared to that offered by often boring and far-from-reality academic professors. Their profile is rising within Europe, partly through (contested) international rankings, partly through events such as the recent European Think Tanks Summit. But they still remain almost unknown to the Italian public, partly due to historical factors, partly because Italian policymakers do not draw on them for policy advice.

Italian think tanks do not seem to recognize the importance of transparency. At the same time, in my experience, major Italian think tanks are willing to give details on their budgets when interviewed. So their current lack of transparency may be chiefly ascribed to low pressure to become more transparent about their funds and activities.

Anna Longhini is a PhD student at Scuola Normale Superiore in Florence, and a visiting PhD student at Royal Holloway University of London in spring 2014. Her current research interest is comparing foreign policy think tanks in Italy, Germany and the UK.

How We Rate Think Tanks’ Financial Transparency

Transparify rates the extent to which think tanks disclose who funds them, with how much, to do what work. While looking into think tank finances is not a new idea – a variety of other players have done so in the past and some continue to do so today – our initiative differs in two regards.

First, we exclusively look at what information think tanks disclose publicly through their websites. We do not contact institutions asking them to provide us with lists of their funders or similar funding data because we believe that transparency involves being transparent towards all interested stakeholders by default, rather than constituting a favour that an institution may choose to bestow upon request. In our view, if information is not accessible, it is not public. For example, a journalist may not have time to wait for think tank’s clarification of who funded its research on a given issue before her deadline expires and her piece goes to press.

Second, our scope is global. We rate think tanks across dozens of countries, applying the same rating criteria to all. A policy research institution based in a small and poor nation may not enjoy a high profile on the international stage, but within its home country, its findings and recommendations are more likely to remain unchallenged by other researchers and thus may have significant impact on policy formulation. Plus, our findings to date indicate that many well-funded think tanks in rich countries can learn a lot about transparency from some of their smaller peers in Africa, Asia and Latin America. We want to recognize excellence wherever it occurs.

So how does it work? Each think tank is assessed by two or more raters following a standard protocol. Working independently from each other, they award between zero and five stars according to the type and extent of financial information available on the think tank’s website.

Think tanks that score the maximum possible five stars enable stakeholders to see clearly and in detail who funds them, how much each donor contributed, and what projects or activities that money went towards (some great examples are listed here). Think tanks that do not provide any up-to-date information on where they get their money from receive zero stars. Most institutions we have looked at so far fall in between these two extremes.

We pre-tested this methodology in late 2013 and found that the results returned by different raters tend to be highly consistent. In the few cases in which raters do assign different scores, an experienced external adjudicator reviews their findings, revisits the institution’s website, and determines the final score.

Best of all, anyone can visit the website of any think tank we rate and compare the information provided there using our rating tool and criteria – so our findings will be easy to check up on.

By the way, in case you were wondering – we plan to release our final rating results before the end of this month.

How a Fake ‘Think Tank’ Deceived 97% of Journalists

Guest blogger Brendan Fischer recounts how a US public relations firm set up a ‘think tank’ to promote clients’ points of view in the media. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

American low-wage employers like restaurant chains may not want their brands associated with unpopular positions like opposition to the minimum wage, but lucky for them, they’ve got the Employment Policies Institute on their side.

EPI, which describes itself as “a non-profit research organization dedicated to studying public policy issues surrounding employment growth” and is often cited as a “think tank” by the media, has been one of the most prominent voices opposing the minimum wage in recent months. It produces or commissions reports purporting to show that workers don’t need higher pay. Its staff are quoted in the press providing respectable-sounding quotes opposing living wage laws.

But the Employment Policies Institute operates from the same office suite as Berman and Co., a public relations firm owned by Richard Berman that counts the restaurant and retail industries among its clients.

Berman – who is EPI’s President and Executive Director – specializes in helping corporate interests launder their messages through phony front groups. His clients have included the tobacco and fast food industries, and he has formed fronts like the Center for Consumer Freedom to fight against indoor smoking bans and nutrition labeling requirements. After Berman received funding from the Corn Refiners Association, the Center for Consumer Freedom launched a TV, radio, and print campaign defending corn syrup and attacking critics. Berman has talked about being in a "long-term war" with unions, and his shop also runs the "Center for Union Facts," which spends tens of millions on anti-union ad campaigns. 

EPI passes itself off as a “think tank,” but it is really just another weapon in Berman’s arsenal of astroturf, offering low-wage employers like restaurant chains a modicum of distance and a veneer of respectability for messages that just-so-happen to benefit their corporate bottom line.

EPI has just a handful of employees, and the expertise of its staff is grounded in public relations rather than academic research. Journalists, in an effort to create a perception of “balance,” regularly tap EPI’s research director, Michael Saltsman – who doesn’t have an advanced degree in research or economics – when they need a pithy quote to counter positions by academics, policy experts, or politicians. 

Yet, a Center for Media and Democracy analysis showed that journalists rarely identify EPI’s public relations ties. In 97 percent of the stories quoting EPI or Saltsman over the past three years, reporters provided readers with no information about EPI’s relationship with Berman and Co. In most cases, journalists described EPI as a “Washington DC nonprofit.” Occasionally, EPI was called “conservative” or “pro-business.” Only about 3 percent of the time did journalists note EPI’s connections to Berman and Co.

Failing to note EPI’s role as an arm of a public relations shop deceives readers into thinking they are hearing an independent perspective, warping the discourse and keeping the public in the dark.

Brendan Fischer is the General Counsel of the Center for Media and Democracy, a group that investigates and reports on the influence of corporations on public policy.

Are Think Tanks Turning into Lobbyists?

Transparify today releases an annotated bibliography on how think tanks influence policy makers containing dozens of media stories and academic articles on the nexus between policy wonks and policy makers.

Think tanks influence policy in multiple ways. Their staff pen op-eds, appear on television, testify in hearings, cultivate close relationships with politicians, build coalitions on policy issues, and shape public debates. In the US, government representatives by now are reportedly utilizing think tanks’ research outputs more often than they use the Congressional Research Service, but this does not necessarily reflect a global trend. For example, think tanks in India are thought to lack access to government officials, while in China, the degree of access seems to depend on where an institution is located. In Brussels, their lack of influence on debates is reportedly limited by… their boringness. 

Where think tanking ends and lobbying begins is often unclear. Many think tanks would argue that educating politicians is distinct from lobbying them, and do not want to be associated with lobbying. However, think tanks have often been criticized for overstepping the line, with many senior staff in the US reportedly moonlighting as lobbyists even as they work for supposedly independent research institutions. On the far end of the spectrum, there are rumours of some public relations firms setting up fake ‘think tanks’ in order to lend their propaganda a veneer of impartial scholarship. The distinction is not only ethical, but also carries legal implications, as a lobbying outfits most certainly are not charitable organizations and therefore do not qualify for tax free status. In at least one case in the UK, the country’s Charity Commission concluded that a registered think tank was in fact a lobbying front and shut it down. 

Where should the line be drawn? What the legal and regulatory issues are at stake? Is freedom of speech in peril once regulators start stepping in? If you want to share your views, post a comment below or contact us to submit a guest blog on the subject.

For your reference, our latest bibliography is here.

The Double Opacity of Think Tanks

Guest blogger Thomas Medvetz asks whether the growing role of think tanks as providers of policy expertise may have serious drawbacks. Transparify does not edit the content of guest blogs; the views expressed in this blog are those of the author alone, and may not reflect the views of Transparify.

What role do think tanks play in advanced democratic societies? Among observers of contemporary politics, few questions have generated a more polarized set of responses. On the one side are the many journalists, scholars, and other commentators who have described think tanks in celebratory terms—often by portraying them as emissaries of scientific reason in political affairs. On this view, think tanks should be applauded for their role in offering sound advice to policy-makers, and more broadly, for spanning the divide between intellectual and political institutions.

Of course, not everyone agrees with this assessment. Over the last four decades, a large body of critical research and writing has depicted think tanks not as advocates of science or reason, but as weapons in a political struggle dominated by moneyed sponsors. Those who have advanced this view have argued that think tanks operate as the organizational machinery of elites, a cluster of “mercenary” groups engaged in “deep lobbying” practices on behalf of their sponsors. If think tanks project the image of intellectualism, these critics argue, then it is only as a veneer for a new kind of political claims-making that tends to reinforce and mask inequalities of power.

Stepping back from this polarized debate, we can see that it is based on a false choice: either think tanks are “truly” intellectual organizations, or they are “really” agents of anti-intellectualism, and possibly anti-democratic in character. Yet neither hypothesis must be true in any general sense. There is nothing built into the form of a think tank that determines what kind of social, political, or intellectual role it will play. In fact, the organizations that currently exist under this moniker are so varied in their aims, affiliations, and intellectual products that they are better thought of as a nebulous array of groups, not as members of a distinct category. (On this note, it is enough to point out that more than three decades of academic research on the topic has failed to yield even a clear or agreed-upon definition of a think tank.)

Only by recasting the discussion, then, can we shed new light on the question of the think tank’s social role. Rather than search in vain for a fixed think tank “essence,” we are better off examining the institutional ecology in which they are embedded along with all those who seek to contribute knowledge and ideas to policy debate. What are the “rules” of this system? What determines who wins or loses in the competition to supply “relevant” policy-oriented knowledge? The prominence of think tanks in this competition has led to growing calls for greater financial transparency among them—including those of Transparify and the recent statements by Senator Elizabeth Warren. These are welcome calls because they speak to one of the central questions about the workings of the knowledge-policy nexus in the U.S.: does money direct the production of ideas, or are the idea-producers free to direct their own thought?

Nevertheless, it is important to recognize that the focus on financial transparency is incomplete in two ways. First, money is not the only form of power that can undermine a think tank’s ability or desire to promote rigorous scientific knowledge. Another impediment is the growing professional power of “policy experts”—the new breed of specialists in rhetoric and advice, of which think tanks are the main incubators. To the degree that policy experts have developed a professional identity of their own, distinct from other intellectuals, it is an identity based on skill and savvy in “selling” arguments to politicians, journalists, and funders. To excel in the world of think tanks, after all, typically means supplying “useful” rhetoric and advice to politicians and journalists—by adhering to the distinctive rhythms, languages, norms, and boundaries of policy battles; anticipating which issues will become “hot” months in advance; and always being ready with a quotable “sound bite.” Even in the absence of financial constraint, then, the need to serve one’s clients can push scientific rigor to the backseat.

This point leads to the second reason why calls for financial transparency among think tanks are good—but not good enough. Financial transparency relates to the production of intellectual goods by think tanks. But we should also seek greater transparency regarding their consumption. Ezra Klein’s recent Bloomberg View article, “The Real Reason Nobody Reads Academics”—written in response to the outcry over Nicolas Kristof’s February 15 New York Times column on the public irrelevance of American professors—speaks to this concern. Klein argues that the “real problem” with the relationship between scholars and journalists “is that the primary system for disseminating academic research”—especially academic journals—“doesn’t work for anyone but academics.”

Klein’s piece is a useful entry into what I hope will become a more robust dialog about the criteria journalists and politicians use to decide which forms of knowledge are “relevant” to political debate, and which are irrelevant. However, in placing the blame squarely on the system of academic publishing, he overlooks what is actually the more significant recent development shaping the relationship between scholars and journalists: the growth of a cottage industry in professional “policy expertise” centered in the world of think tanks.

Shifting the focus to think tanks and their rapid-fire production of talking points, policy memoranda, and punditry raises a new set of questions:

• Has the growth of think tanks led to an over-valorization of “timely” proclamations, irrespective of their scientific validity, and of polished sound bites and legislative testimony, regardless of how rigorous their claims may be?
• How do journalists and politicians assess the value of the policy-oriented knowledge available to them?
• Has convenience displaced credibility in this process?

More broadly, in a public sphere saturated with knowledge-producers of various kinds, who is the dominant “policy expert” in America today? Is it the bearer of scientific knowledge, or the expert whose forte is lending the stamp of scientific credence to policy ideas that originate in the minds of political and economic decision-makers?

Thomas Medvetz is Assistant Professor of Sociology at the University of California, San Diego. He has published widely on think tanks and is the author of the 2012 book “Think Tanks in America”.