A UK charity that portrays itself as a climate leader facilitated a £830,000 donation to the Mercatus Center, a conservative think tank heavily funded by U.S. oil billionaire Charles Koch, DeSmog can reveal.
The London-based Founders Pledge channels donations from entrepreneurs to charities – empowering business leaders “to do immense good”, according to its website.
This includes giving money to climate causes. The Founders Pledge runs a Climate Fund that claims to “find and fund impactful, neglected climate solutions” – having distributed almost $36 million from over 5,000 donors.
Donor Advised Funds (DAFs) like the one sponsored by the Founders Pledge allow wealthy individuals to anonymously distribute money and other assets. Research shows that DAFs are increasingly being used to funnel money to reactionary causes – including in the UK.
The Mercatus Center is a conservative “market oriented” think tank registered as a charity. Mercatus and its sister group the Institute for Humane Studies (IHS), both located at George Mason University, have been funded by American billionaire and oil magnate Charles Koch, co-founder of Koch Industries – the second-largest private company in the U.S.
The network of influence controlled and supported by Charles Koch and his late brother David includes “a web of interconnected, right-wing think tanks and advocacy groups”. The pair have piled millions of dollars into causes promoting climate disinformation, including buying credibility with large investments in academic institutions.
Between 2018 and 2022, George Mason was by far the biggest university in receipt of Charles Koch’s money. The three institutions – George Mason, Mercatus, and the IHS – received $128.6 million from four Koch foundations during the period. The Mercatus Center, which has called climate change “beneficial”, has also received funding from the oil major ExxonMobil.
And yet, the Founders Pledge – which distributes over £100 million annually and operates in the UK, Germany, and U.S. – has been featured in articles highlighting its green credentials and has been labelled as being among the most “high-impact, cost-effective, evidenced-based organisations” to donate through.
Firms operating DAFs have the right to refuse to give to certain causes, though in practice this rarely happens.
The Founders Pledge told DeSmog: “We tackle climate change as the global, long-term challenge it is, focusing on solutions that change trajectories, transform systems, reduce the biggest risks for devastating damage around the world, and that will be effective even if everything goes wrong.
“Among other efforts, we fund efforts to fast-track low-carbon technologies like advanced geothermal and to make new infrastructure as low-carbon as possible and look for ways to reduce future emissions from existing systems.”
The Mercatus Center did not respond to DeSmog’s request for comment.
The Mercatus Center and Charles Koch
DeSmog’s investigation finds that the Founders Pledge was used to donate almost £830,000 to the Mercatus Center in 2022.
Mercatus was originally founded – with grant funding from Charles Koch – by Richard Fink, an executive vice president and board member at Koch Industries who, along with Charles, still sits on the Mercatus board and has previously been described as “a fixture in Koch Industries”.
Brian Hooks, CEO and chair of the Koch-founded Stand Together Trust, also sits on the board alongside Emily Chamlee-Wright, president and CEO of the IHS.
Charles Koch is chairman emeritus of the IHS board, which is largely populated by George Mason professors and representatives from the Charles Koch Foundation and Stand Together. It has been described by Mother Jones as “a haven for climate deniers that receives funding from the Koch family foundations”.
The Koch Foundation has paid the salaries of Mercatus Center professors, which in turn have produced work arguing that “The evidence regarding global warming and human contribution to it is mixed, and as forecasts of anthropogenic warming get more refined, they predict less extreme warming.”
In 2020, the think tank was also accused of promoting “flawed” research to “hobble” environmental research in Australia, and it has previously suggested that climate change could be “beneficial” and make humanity “better off”.
The Institute for Humane Studies declined to offer an on the record comment.
Political Donations
The Founders Pledge received some £111 million in 2023, and distributed £101.4 million to various charitable causes.
Originating in the U.S. in the 1930s, DAFs are increasingly used by the wealthy to donate to political causes – and often those with reactionary beliefs. A 2024 study found that DAFs are more likely to be used for political donations than other funding methods, while they account for more than one-quarter of all contributions received by “anti-government and hate groups”.
Money from prominent DAFs has been used to finance the radical Project 2025 playbook for Donald Trump’s second term, to contribute to the coffers of groups campaigning against women’s and LGBTQ rights, and to prop up climate denial think tanks, all without the original donors having to disclose their identities.
As of 2023, roughly 2 million DAFs in the U.S. distributed $55 billion in grants to charitable organisations, while UK charities received £645 million from DAFs in the same year, according to the National Philanthropic Trust.
Speaking to DeSmog on the opacity of DAFs, Brian Mittendorf, a professor at Ohio State University and co-author of the aforementioned study, said that his research “shows that donor advised funds in the U.S. disproportionately fund politically engaged institutions” and that “one motivation for this could be to limit revelations about who funds political organisations.”
He added that “public disclosures by these organisations make it difficult to identify which fund provided money to which organisations and especially who gave money to those funds in the first place.”
“When private foundations distribute money to a donor advised fund prior to it being sent to the ultimate recipient, the paper trail is lost,” he said.
The Rise of DAFs in the UK
The practice of channelling political donations through DAFs now seems to be more commonplace in the UK.
One DAF supplier – called Prism The Gift Fund – has been used to distribute nearly £1.6 million since 2017 to a suite of right-wing think tanks and lobby groups including Policy Exchange, the Global Warming Policy Foundation, the Legatum Institute (now the Prosperity Institute), the Centre for Social Justice, and Henry Jackson Society.
The ultimate source of the funds are unknown.
Moreover, research into the transparency requirements surrounding DAFs suggest that the UK could even be lagging behind the U.S..
One key area is how grants are recorded. In the U.S., DAF providers are required to list most of the grants they pay out in their annual returns. Speaking to DeSmog, Mittendorf explained that suppliers of DAFs in the U.S. have to disclose who received a donation if it surpasses $5,000.
This differs from the UK, where there is no formal requirement for DAF providers to list their recipients, although some still choose to do so.
In the case of the Founders Pledge, while recipients of larger donations are named in its 2023 accounts, “grants less than £645,000” are recorded as one lump sum, with no way to tell where that money has gone to, in addition to not being able to tell where it has come from.
A spokesperson for the Charity Commission confirmed that, at present, recording requirements are minimal. “As DAFs are managed by the charities they reside in, our guidance for the parent charities/trustees is the same as for any other charity, rather than specifically for DAFs… No charities are required to list all the organisations they provide grants to.”
A spokesperson for another prominent DAF provider, The Charity Service, said that “the issues around transparency and DAFs is an interesting one especially as anonymous giving is one of the perceived benefits of giving through a DAF for many donors.”
Tom Brake, director of the campaign group Unlock Democracy, said: “The increasingly influential role think tanks have in our democracy must go hand-in-hand with greater transparency over who funds them and to what end. DAFs do the exact opposite, shielding those donating to think tanks and other organisations from public scrutiny.”
