Previous
This article was written by Grupo FARO as part of the publication of the 2024 On Think Tanks State of the Sector Report. Explore the report and resources here.
Access to funding for think tanks in Latin America and the Caribbean (LAC) is a complex issue that affects not only their individual operations but can also have consequences for the development of the entire sector.
Many think tanks rely on a combination of public and private funding, including donations from foundations, corporations, and governments. In theory, it is most beneficial for think tanks to have diverse funding sources to ensure their operations while also maintaining the independence and objectivity of their work. Think tanks that depend heavily on private or government funds may feel pressured to adjust their priorities to align with their donors’ agendas, which can compromise their objectivity.
Think tanks may receive funding that covers the core operational costs of an organisation (core funding) or funding that focuses primarily on specific projects or temporary initiatives. Core funding allows organisations to have a solid financial base, ensuring they can maintain daily operations, pay salaries, and cover overhead expenses, thereby contributing to their long-term sustainability. With funding that is not tied to specific projects, organisations can use these resources more flexibly, allowing them to adapt to new opportunities or challenges without being limited to a predefined framework.
Download the On Think Tanks State of Sector Report 2024
According to the Think tank state of the sector 2024 survey, in the LAC region, only 20.7% of responding think tanks primarily have core funding, while 48.3% have funding focused on projects. This type of funding does not allow organisations to focus more on their core mission and strategic long-term activities, forcing them to concentrate on meeting the demands of funded projects.
This project-centred funding also hinders organisations from investing in their institutional development, improving internal capacities and infrastructure, and covering their indirect costs, which affects the overall quality and effectiveness of the organisations. 46.4% of the think tanks that responded to the survey indicated that it is very difficult or difficult to cover their indirect costs. Only 10.7% of the think tanks reported that it is easy to cover these costs, and none stated that it is very easy.
This project-centred funding is also evident in short-term financing; 32.8% of think tanks receive funding for up to one year, while 44.8% receive it for one to two years. Only 6.9% of the think tanks in the region receive funding for four years or more. The dependence on short-term funding creates economic instability, complicating long-term strategic planning and potentially affecting the continuity of think tanks’ work. The financial uncertainty caused by short-term funding can also hinder the attraction and retention of qualified personnel and lead to reduced visibility and recognition for these organisations in the community, among other things.
While some think tanks worldwide align entirely with a political party, a business sector, or a specific agenda, it is ideal for most organisations to find funding sources that do not seek to influence the topics addressed or the outcomes of analyses and research.
It is important to note that 52.5% of think tanks cited international development organisations as one of their main sources of funding, while 32.8% indicated private enterprise as a primary source. However, responses regarding the origin of funds yield somewhat contradictory results. 43.4% of think tanks report that their funding primarily comes from national sources, 30% indicate that their funding is evenly distributed between national and international sources, and only 26.3% respond that most of their resources come from international sources.
In the think tank sector, competition for funding is intense, especially in an unstable economic context, such as that of most countries in the region. 35.1% of think tanks believe that the funding landscape for think tanks in their respective countries will be very unfavourable in the next 12 months, while 42.1% consider it to be neutral.
This situation, on one hand, leads some think tanks to innovate their funding models, seeking income through consulting services, publications, or events, allowing them to diversify their funding sources. However, the lack of sufficient and stable resources complicates the ongoing operations of think tanks, hinders their ability to adapt to rapid changes in the political and social context, and generally puts at risk their capacity to contribute to society with their work.
Finally, to conclude this blog on think tank funding, it is essential to mention the growing call for transparency in funding. Transparency in funding sources helps build public trust, as when think tanks disclose their donors and sources of income, citizens can assess the independence and credibility of their research. Conversely, a lack of clarity in funding may lead to suspicions that certain economic or political interests influence the work of think tanks, potentially compromising the integrity of their work and affecting public perception of these organisations. Therefore, we support the call for think tanks to adopt transparency standards that include publishing financial reports detailing funding sources and expenditures, thereby fostering a culture of accountability in society, enabling them to operate with greater confidence and legitimacy in the public sphere.
