Big banks and thinktanks

Mind on the money or money on the mind? (Image from

Thinktanks are often quoted in the media as bastions of impartial, academic research; their reports and findings are relied on to inform and improve public policy. But in the past year at least £1.3m was given by the financial sector to fund the UK’s 18 most powerful thinktanks – raising questions over the sector’s influence on their independence.

The Bureau asked where 18 of the UK’s biggest thinktanks got their money. We learnt that in some cases funds from financial sector donors made up almost a third of a particular thinktank’s income.

All 18 of the thinktanks we contacted produced material that comments on and informs issues in the financial sector. This work is regularly reported by the media. However, little attention is given to the financial backers of this research.

There is some recognition among the sector that this could be a problem. Sam Read, from thinktank the New Economic Foundation, recently argued on the organisation’s website that transparency is vital for the industry.

‘Theoretically a wealthy individual who doesn’t like a government policy could give millions of pounds to a thinktank to promote their agenda,’ he wrote. ‘As well as utilising the thinktank’s professed close links to politicians, they can help to create a debate in the media where they will give the impression that certain policies are backed by independent experts.’

Theoretically a wealthy individual who doesn’t like a government policy could give millions of pounds to a thinktank to promote their agenda.’
Sam Read, New Economics Foundation

Sources of donated income varied between thinktanks. The Adam Smith Institute, for example told us just 6% of its income came from the financial sector, while the Social Market Foundation, who were recently named Think Tank of the Year, said 29% of donations came from financial sector backers.

Donations from the financial sector were offered towards core funding as well as for specific projects.

It is unclear how much influence funding can have on research outcomes.  Centre Forum told us its corporate sponsors ‘don’t have a massive influence but they do offer suggestions on areas of focus’. Centre Forum’s financial donors include Citigroup, the City of London Corporation, Aviva and KPMG.

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Transparency is not at the top of all agendas. Many of the research organisations we contacted refused to disclose their donors. Five of the 18 would not tell us anything about their funding, while seven would only give the figures and not the names of their financial sector backers.

For those that did give us some information on their funders, we explored what research they had done which touched on financial issues.

Thinktanks have often proven notoriously secretive about their funding. Journalist George Monbiot has written on this issue: ‘We know that to understand politics and the peddling of influence, we must follow the money. So it’s remarkable that the question of who funds the thinktanks has so seldom been asked.’

Last month Who Funds You ranked some of the UK’s top thinktanks in terms of their funding transparency.

Enrique Mendizabal is publisher of the blog He said: ‘Thinktanks ought to publish who funds them but I recognise that this is not always desirable. But publishing a list of funders is not enough. This should be done clarifying how the funding is provided: endowments, grants, contracts.’ 

Click here for the Bureau’s database on financial lobbying

Last year a report by Demos made the news by urging restraint on blaming top bankers for the financial crisis.

City Limits: The Progressive Case for Financial Services Reform, published in March 2011, complained there was too much ‘banker bashing’ from senior politicians.

While the report was covered by newspapers, there was no mention of who had funded the report.

But in the report’s acknowledgements, Demos’ then-CEO Kitty Ussher wrote: ‘I am particularly grateful to: the City of London Corporation for its financial support and helpful suggestions.’

The City of London Corporation is one of the British financial sector’s most powerful voices.

What’s more, 13 of Demos’ funders are from the financial sector, including Deloitte, Chartered Institute of Taxation, Corporation of London and Deutsche Bank.

A spokeswoman for Demos told the Bureau: It’s worth noting that we probably received more funding from financial institutions in 2011 due to Kitty Ussher, who is a former treasury minister and well-known flag-waver for the City, being our director.’

But the thinktank denied that its work is influenced by funders: ‘Demos takes funding from a broad range of sources but our reputation is based on our independence and our research and recommendations can never be bought,’ it said. ‘We take project proposals to funders rather than being commissioned to do work.’

New Local Government Network
In some cases thinktanks receive funding for specific projects.

New Local Government Network, another policy unit that responded positively to our enquiries, last December produced a paper called Capital Futures. The report was funded in part by Morgan Stanley. It suggested that local government, rather than borrow from the Public Works Loan Board, should issue its own bonds. Morgan Stanley recently announced that its bond trading revenue rose compared with their performance last year.

The thinktank also produced Retail Therapy, a report funded by the London Stock Exchange. This carries on Capital Futures’ theme stating: ‘Since the government raised the rate at the Public Works Loan Board, it has become cheaper in some circumstances for councils to borrow from the capital markets’. The suggestion was that retail bonds would work well. The London Stock Exchange launched its retail bond market in February 2010.

Related article: How ‘big four’ get inside track by loaning staff to government

Centre for European Reform
EU-focused Centre for European Reform is more open than most about its sponsors. It told the Bureau that 11% of its £1.2m annual turnover came from the financial services industry. These funders include Barclays, Citi, Deutsche Bank AG, JP Morgan and UBS, to name a few.

CER has produced several reports arguing against the financial transaction tax and for looser regulation of the Eurozone.

Such reports have real potential to be influential. The work of CER is reaching the ears of decision makers. In late 2010 the House of Lords EU sub-committee on economic and financial affairs and international trade heard evidence from Katinka Barysch from the Centre for European Reform as part of its inquiry into the future of economic governance in the EU.

Quids in (image via Shutterstock)

Social Market Foundation
This social and economic policy research group told the Bureau that 29% of its income came from financial donors such as banks and lenders, businesses and insurers.

Mastercard sponsored research and a seminar series for the organisation’s report A Confidence Crisis? Restoring Trust in Financial Services. In the report, Mastercard justified its sponsorship, saying: ‘consumer trust and strong economies run in tandem, which is why Mastercard has supported this important project to explore how this link can be strengthened and encourages government to examine this issue in greater detail.’

A section in the report on bankers’ bonuses explores issues surrounding bankers’ pay, concluding that even if consumers are not happy with large bonuses, they have little choice but to accept the situation. The section was written by Michael Skapinker.

Elsewhere the thinktank has criticised the UK banking system, and supported the Vickers inquiry.

Other thinktanks were less happy to share the details of their donors – yet they have produced some persuasive research on elements surrounding the financial sector.

Publishing a list of funders is not enough. This should be done clarifying how the funding is provided: endowments, grants, contracts.’
Enrique Mendizabal,

The Centre for Policy Studies, for example, refused to tell the Bureau where its funding came from. It recently produced a report called Time to Bin the Tobin Tax, which was highly critical of the proposed financial transaction tax.

The centre and its sister organisation, Information Daily, hosted a web seminar on the subject. Participants included Andrew Tyrie, the chairman of the Treasury select committee, alongside Barclays’ head of public affairs and Citibank’s head of government relations.

The thinktank’s report How to cut Corporation Tax, published in February, argued that corporation tax should be cut to 20% in the next Budget.

Thinktanks need external funding to survive – but as some in the sector argue, without transparency it is impossible for the media and public to identify any conflicts of interest within a thinktank’s output. Yet while many of the organisations above responded to our enquiries, there were even more that would not reveal their donors.

(Editor’s note: the Bureau’s funders and disclosures can be seen here.  We received the vast bulk of our money from the David and Elaine Potter Foundation who have pledged £2 million to the Bureau. There is a Trust approved wall between funding and editorial. The former does not influence the latter.)

What’s in a name?
The term ‘thinktank’ is rather nebulous and unregulated, meaning anyone can claim to be a think tank and publish research.

‘There will be plenty of small ones, calling themselves thinktanks, that will, however, be no more than PR fronts for corporations,’ said Enrique Mendizabal.

However, it is the more established thinktanks that tend to have their reports picked up in the press, and have an influence on government policy.