How “Charitable” is the Institute of Public Affairs?

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Look out! by Shaun Davis

HOW IS THE IPA CONSIDERED CHARITABLE?

“A charitable purpose is what a charity has been set up to achieve. It is the overarching object or goal of the charity – some people may refer to it as a ‘mission’. There are 12 charitable purposes listed in the Charities Act 2013 (Cth), and charities may have more than one charitable purpose.”

It’s not entirely clear what the “charitable” purpose of the IPA might be, beyond acting as a life support mechanism for the far right outliers of the Liberal Party (originally Keynsian in outlook, it has been neo-liberal since the 1970s).  https://en.wikipedia.org/wiki/Institute_of_Public_Affairs.

It has long been beholden to big business: nowadays it appears to be a subsidiary of Hancock Prospecting. But if they are a charity then how can they be such upfront political campaigners?

CHARITIES MAY CAMPAIGN, WITH CONDITIONS

It is often said that charities either cannot, or should not, engage in politics. But they may campaign under certain conditions. Certainly the IPA campaigns.

A charity can campaign if it is satisfied that:

  • what it is doing is advancing its charitable purpose
  • its governing document (e.g. its constitution or rules) does not prevent the activity
  • it does not have a purpose of advancing a particular political party or candidate or campaigning against a particular party or candidate
  • it does not have a purpose of engaging in or promoting activities that are unlawful, and
  • it does not have a purpose of engaging in or promoting activities that are contrary to public policy (i.e., the rule of law, our constitutional system, the safety of the public or national security).”

https://www.acnc.gov.au/ACNC/Reg/Charities_elections_and_advocacy_.aspx

The IPA arguably gives the very strong appearance, very much front and centre, of hewing to the purpose of advancing one political party and campaigning against another. And some of its work, e.g., in support of the tobacco industry, and against workplace safety law, are very much contrary to public safety.

DONATIONS TO THE IPA ARE TAX DEDUCTIBLE

The IPA has plenty of money, in part because donations to it are tax deductible. Professor Clive Hamilton explains:

In 1987 the IPA restructured itself as a company limited by guarantee, which means that its directors are not liable for any debts it might incur.

The restructure enabled it to apply to become an Approved Research Institute (ARI) and thus be eligible for endorsement as a deductible gift recipient (DGR). In other words, donors to the Institute would be able to claim a tax deduction for their donations.

DGR status is the most valuable asset of an organisation like the IPA because without it virtually no-one would donate.

HOW THE IPA GOT DGR STATUS

Their right to DGR status seems dubiously acquired and hard to justify. It came about thus (italics mine):

  • The IPA applied to the Secretary of what is now the Federal Department of Innovation, Industry, Science and Research for recognition as an “approved Research Institute”, giving various undertakings.
  • Most importantly, it had to undertake to use all tax-deductible donations exclusively for scientific research, more particularly, “scientific research which is, or may prove to be, of value to Australia”**. In this context, the authorities have ruled that “scientific research” includes social scientific research.
  • It must also ensure that all disbursements … are evaluated and approved by “a suitably qualified research committee” of at least five members, the majority of whom are appropriately qualified in the field of research that is to be undertaken or have appropriate experience in reviewing research, and who should be nominated on the basis of their “proven ability to direct a research program”. As far as I can tell, the IPA has not made public the membership of its research committee.
  • The rules state explicitly that tax-deductible funds may not be used for “the organisation of conferences, congresses and symposia and the publication of information (other than the results of the ARI’s own research work, undertaken through this program).”
  • All of which raises the question of whether donations to the IPA for which the donor has claimed a tax deduction are being used in compliance with the law.

**how does this square with the ‘research’ – in reality, highly tendentious and partisan political material – that they produce, particularly in relation to, e.g., plain tobacco packaging, and especially, climate change denial?

https://independentaustralia.net/environment/environment-display/the-ipa-and-waubra-foundations-charitable-tax-status-rorts,6649

HIDING BEHIND ‘FRONTS’

The IPA has been the driving force behind the establishment of a number of new non-profit front groups, including

It’s hard to see how this is ‘research’ benefitting Australian society, or how it promotes the ‘safety of the public’.

THE MONEY TRAIL

Where do they get their money from? who benefits from this stream of one-sided propaganda masquerading as ‘research’?

The IPA [used to rely] heavily on funding from a small number of conservative corporations. Funders disclosed by the IPA to journalists and media organisations over the years include:

  • BHP-Billiton
  • Western Mining Corporation;
  • Monsanto
  • Telstra,
  • Clough Engineering,
  • News Limited;
  • Philip Morris
  • British American Tobacco
  • Caltex
  • Esso Australia
  • Shell and Woodside Petroleum
  • Fifteen major companies in the electricity industry
  • Gunns
  • Murray Irrigation Ltd
  • The Australian Government:  paid $50,000 to the Institute of Public Affairs to review the accountability of NGOs

However, financial support for the IPA diminished from 1995-96. Even Rio Tinto, the conservative mining company, abandoned the IPA because of its strident advocacy against Aboriginal self-determination. [5].

From 1995-96 when the IA received $1.4 million, income fell to just over $669,000 in 2001-2002 (figures adjusted for inflation).

https://www.sourcewatch.org/index.php?title=Institute_of_Public_Affairs

THEN CAME GINA RINEHART

Rinehart donated $2.3 million to the IPA in 2016 and another $2.2 million in 2017. [But] Rinehart has been a major force within the IPA – and presumably a major donor – for far longer than that.

In 2013, the institute presented her with a special “free enterprise leader award” and in 2016 it bestowed on her an honorary life membership, in recognition of her “commitment … to the work to the Institute of Public Affairs over many years”.

The institute’s annual reports tell us its total revenues were $4.96 million in 2015–16 and $6.1 million in 2016-17. Thus Rinehart’s money, given through her company, Hancock Prospecting, made up almost half the IPA’s income in one year and well over a third in the other. She has, in effect, a controlling interest.

https://www.thesaturdaypaper.com.au/news/politics/2018/07/28/rineharts-secret-millions-the-ipa/15327000006616

BEYOND IRONY

All of which makes their submission to the Board of Taxation, re the Draft Charities Bill, 2003, all the more ironic. https://cdn.tspace.gov.au/uploads/sites/70/2015/07/Institute_of_Public_Affairs.pdf

In it they call for:

  • The ATO to introduce a process to review charities receiving tax deductibility and other tax benefits; at present, there is almost no scrutiny of charities, no performance requirements for their taxpayer support
  • Charities with a total income above a minimal threshold should be incorporated under the Corporations Law and should be required to produce and lodge financial statements which comply with those required under Corporations Law
  • A review of the workability of the definition of a charity and the ways and means by which the charty status is decided
  • A new statutory definition of charity: charities should be narrowly defined with a strong emphasis on direct relief action

It would be interesting to see this level of scrutiny applied to the IPA itself.

WHO ARE THE MOUTHPIECES?

These are the names to look out for, who can be found spruiking the IPA line in the public square, including on the ABC. Which is odd, since so much of their material is so unbalanced.

IPA Staff, fellows and board members

Name Title Appointed Date ended Time served Comments
Janet Albrechtsen Director incumbent Opinion writer for The Australian and a former director of the Australian Broadcasting Corporation
Chris Berg Adjunct Fellow incumbent Columnist
James Bolt Digital Communications Manager incumbent Son of Andrew Bolt, an Australian conservative political commentator
Father James Grant Adjunct Fellow incumbent Catholic Priest and founder of Chaplains Without Borders, and Catholics in Business
John Lloyd Director of the Work Reform and Productivity Unit 2014 Australian Public Service Commissioner and the former Australian Building and Construction Commissioner
James Paterson Deputy Executive Director 2014 2016 Australian Senator representing Victoria for the Liberal Party
David Penington Former Vice-Chancellor of University of Melbourne
Jason Potts Adjunct Fellow incumbent Economist
Tony Smith Research Assistant 1989 1990 0–1 years Liberal Party Member for Casey, Speaker of the House of Representatives since August 2015
Tom Switzer Adjunct Fellow Historian; Executive Director of the Centre for Independent Studies; former Senior Adviser to then Liberal Leader Brendan Nelson (2009)
Tim Wilson Policy Director 2007 2013 5–6 years Liberal member for Goldstein; former Australian Human Rights Commissioner
Morris Williams Research Assistant 1947 1972 24–25 years Liberal member for Box Hill and Doncaster

Donors, members and associates

Name Relationship to IPA Comments
Gina Rinehart Donor;

Lifetime Member

Chairperson of Hancock Prospecting
David Leyonhjelm Member Australian Senator representing New South Wales for the Liberal Democratic Party
Bob Day Member Former Australian Senator representing South Australia for the Family First Party
John Elliott Voting Member Australian businessman; former president of the Liberal Party; former president of Carlton Football Club; former executive of Elders Limited
Kevan Gosper Voting Member Former Vice President of the International Olympic Committee; former chair and CEO of Royal Dutch Shell in Australia

NOT REALLY A CHARITY

If it looks like a charity, talks like a charity, and acts like a charity, then clearly it is a charity. The IPA neither looks, talks nor acts like a charity, or even a proper ‘research institute’. It’s a lobby group. They do not deserve their Direct Gift Recipient (DGR) charitable status. And remember:

DGR status is the most valuable asset of an organisation like the IPA because without it virtually no-one would donate.

Time for some of that close scrutiny which they advocate for the likes of GetUp and ACOSS to be applied to them.

About the author

Veteran gay writer and speaker, Doug was one of the founders of the UKs pioneering GLBTI newspaper Gay News (1972) , and of the second, Gay Week, and is a former Features Editor of Him International. He presented news and current affairs on JOY 94.9 FM Melbourne for more than ten years. "Doug is revered, feared and reviled in equal quantities, at times dividing people with his journalistic wrath. Yet there is no doubt this grandpa-esque bear keeps everyone abreast of anything and everything LGBT across the globe." (Daniel Witthaus, "Beyond Priscilla", Clouds of Magellan, Melbourne, 2014)