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Part 2 of 2. Funding challenges and CaPRI´s private sector model. Read part 1.
Damien King is the Executive Director at the Caribbean Policy Research Institute (CaPRI), as well as one of its founders. CaPRI, based in Jamaica, is an economics focused think tank, a first for the Caribbean region, as well as one of the most prominent think tanks in the region. In this two-part interview Damien shares CaPRI´s approach to research, communications and credibility, their approach to working with the private sector, as well as some reflections on the functions of a think tank and the characteristics that a think tank leader should have.
In this second part of the interview Damien reflects on the funding challenges that led to their engagement with the private sector and how they maintain, and communicate, their independence.
AB: What challenges did you face at the beginning when you established CaPRI?
DK: Funding. To establish credibility, we could not take any money from interested parties. And even now that we have built enough credibility for government ministers to sometimes call us and say “we are thinking of doing something about the problem of financing tertiary education (to pick an example). Can CaPRI do some work on this?,” we don’t allow the government to pay for it (to avoid them becoming an interested party). So we must find the funding independently from who wants the work done.
Funding was the biggest challenge at the beginning, less so now because we have established our reputation and credibility.
There was also an organisational challenge, as we did not have other think tanks in Jamaica to learn from. Being academics initially, we didn’t really know how to run an organisation. We were not coming from business, so they were many organisational challenges and inefficiencies in the beginning.
AB: How did you overcome these challenges?
DK: We overcame the funding difficulties with our private sector model. At present we have four sources of funding:
First, the University of the West Indies. We are not officially part of the it, but their support represents 10% of our budget. They provide resources in-kind (office space), pay a fraction of our salaries, and very often we use academics from there when we outsource some to the research.
Second, grants from international funding agencies. We submit proposals to international (mostly bilateral organisations) and to the extent that those proposals are accepted then we do research that fits within their themes and cycles. This stream represents 50% of our budget.
Third, the Jamaican private sector. Currently, 12 companies donate to us. Their donations are untied and can be used for anything. This stream represents 30% of our budget.
And fourth, from miscellaneous sources. The final 10% is miscellaneous sources and income generating activities that we undertake.
AB: Tell me more about your approach to fundraising from the private sector.
DK: We approach all the big companies in Jamaica and we point out that an improved business climate, societal harmony and improved governance is in their interest. So, an act of enlightened self-interest would motivate them to support CaPRI. Once we got to a critical mass (and now we have a dozen) of companies that support us, it’s easier to make that case. Now that we have enough critical mass, if an organisation does not support CaPRI, it starts to look as if they are free-riding on the rest. And that is my pitch “you need to pull your weight”. One of my main slides in the presentation are the logos of all the big companies that support us. It’s like I am asking them: “Why are you not here?”
AB: What sort of funding do companies provide?
DK: We ask companies to provide a minimum of USD10,000 a year (a few provide more than that). All their donations are for core funding and it is untied. We can do with it what we want. This is very important because it allows us to respond in a timely manner when policy issues arise in Jamaica. Project funding from international partners has to be for a project set up in in advance. With untied funding, when a crisis arises, we can respond quickly, and use these resources to produce the information that the government needs in a short time period. This also explains our impact, we can be timely.
AB: How did you get started with private funding? How do you get that first company to get on board?
DK: One of our board members was also involved in a large and well-established company, and they decided they wanted to support CaPRI´s efforts. They gave us a big chunk of money and that really just became the springboard from where we could go to a second company and say “this company is supporting us, you have the same interests that they do, and you stand to gain from a Jamaican economy and society that is going to do better. So you should give us some money too”. The second company said yes and we just build up from that.
AB: Who gave you access or contacts to that second company?
DK: It was not through contacts. It was just calling and getting an appointment with the CEO.
AB: The only thing you offer to companies is the promise of a better Jamaica?
DK: Yes. We make the point that I made earlier that Jamaica is not suffering from deep structural problems. Jamaica’s problems are easily addressed with policy change, so the return on investing in research and informed policy is potentially very high.
AB: How do you maintain independence from the private sector and how you guard your credibility? (in the current scenario in which private donations can be seen as money with strings attached)
DK: Well, it’s always an issue. For example, a little while ago, the opposition party wanted to introduce legislation to put a tap on fees that commercial banks could charge. So, it became a political issue. As it turns out we had done research two years ago looking precisely at the issue of the perceived high cost of bank fees in Jamaica. Our research concluded that the explanations for it had to do with the size and characteristics of the financial market in Jamaica.
While they were in fact high, they were not high given the characteristics of the market. We decided to dust off that research and promote it again. And we did come under some amount of accusation that because some of our funders are banks we were protecting their interests. We explained our methodology and were transparent about our research process and the matter slowly resolved itself. But it is an issue that is always there, and we try as best as possible to make clear that the funding model has nothing to do with specific bits of research that we do.
We do, however, from time to time annoy our private sector sponsors because our recommendations are not in their particular corporate interest either.
AB: You said before that you don’t accept any government funding to maintain your independence from them? Are there any other groups or funders that you steer away from?
DK: We don´t do consultancies. We don’t allow companies to give us money to do a project in which they have an interest in the outcome. The other thing that we avoid is collaborations with non-neutral groups. There are many NGOs who are pursuing either political, ideological or thematic objectives as a part of their constitutions. For example, one of our themes is the environment, but we are not dedicated to promoting specific environmental objectives over all others. The Jamaica Environment Trust, an NGO which we have great respect for, has the objective of protecting the environment to whatever extent possible. We, on the other hand start with a neutral perspective. We look at the benefits, the costs and the trade-offs and then come to a recommendation.
AB: And how do you ensure and communicate your independence?
DK: We are transparent about our methodology and explain it whenever needed. We also highlight that supporting CaPRI does not give any of our sponsors (funders) prior sight of our research. We consult with stakeholders, but not with the sponsors. Sponsors see the research at the same time as everybody else. Sponsors don’t get to choose our research topics and they don’t get prior knowledge of it.