Recently, Sanjaya Baru, the prime minister's former media advisor, sounded the alarm over how many Indian think tanks were now dependent on foreign public and private institutions the World Bank, DFID (UK), Oxfam and many others for financial support. He correctly walked away from the notion that these think tanks were, therefore, "captured" by the foreign institutions.
But a more nuanced worry is in order. Funding does constrain what you will do: this is simply a matter of prudence, not of being "bought". I will give one personal example. I was on the board of an important Indian NGO which deals with trade issues. This NGO was fully sympathetic to myriad writings by me and professors Arvind Panagariya and T N Srinivasan, among others, warning how the demands to include labour standards in trade treaties and institutions were tantamount to "export protectionism" (in the sense of seeking to raise the cost of production abroad to moderate competition). We had forcefully argued that these demands must be rejected as being driven by labour unions in the West, which were wrongly fearful of trade with the developing countries.
Having been funded by foreign agencies which wanted them to work with foreign think tanks, the Indian NGO had organised a seminar on the subject in Washington DC, under joint auspices with Carnegie. It wanted me to play a prominent role, but it had to agree to my being downgraded because Carnegie had embraced the protectionist agenda on labour standards. With foreign funding, both current and prospective, the Indian NGO felt that it had little choice and sought my indulgence. I resigned over the incident from the NGO, only to return later as i saw the difficulty in which foreign funding had placed its able director. He had integrity; he was penitent. But he had to be prudent or his NGO would be financially crippled.