Fundraising should be fun… but it is also a very serious matter

9 April 2014
SERIES Funding for think tanks part one: domestic funding 16 items

I came across a recent article by Arthur C Brooks, President at the American Enterprise Institute (AEI), via a very interesting and useful site: Inside Philanthropy. In his article for the New York Time, Brooks argues that fundraising for think tanks is fun -or rather, it should be fun.

I think that every think tank director that I haveinterviewed or talked to would agree that fundraising is a key aspect of their job. But how many would agree with Brooks when he says that:

soliciting donations is often the single biggest part of a nonprofit leader’s job.

The Inside Philanthropy article ask why is Brooks such a good fundraiser? It seems to imply that he, as an former academic, would be the least likely candidate to raise the tens of millions he has for the AEI. Maybe, as Brooks explains in his article, the secret is that he has studied philanthropy and has been able to apply what he knows (and what many others have found) to his job.

Think tank directors in developing countries always complain that their domestic millionaires and potential-philanthropists do not care about charity or supporting to research. It is impossible, they say, to get them interested. It is far easier to continue to rely on the funds that their usual funders in the international community make available to them. But for many think tanks in emerging economies and middle income countries, these funds won’t be around much more. Soon, their only sources of income will have to be domestic.

Just as think tanks have been successful in influencing policy they now need to turn this experience towards influencing these potential philanthropists. And to be successful they need a better understanding of philanthropy: who, what, why, etc.

This is what research into philanthropy told Brooks:

In 2003, while working on a book about charitable giving, I stumbled across a strange pattern in my data. Paradoxically, I was finding that donors ended up with more income after making their gifts. This was more than correlation; I found solid evidence that giving stimulated prosperity. I viewed my results as implausible, though, and filed them away. After all, data patterns never “prove” anything, they simply provide evidence for or against a hypothesis.

But when I mentioned my weird findings to a colleague, he told me that they were fairly unsurprising. Psychologists, I learned, have long found that donating and volunteering bring a host of benefits to those who give. In one typical study, researchers from Harvard and the University of British Columbia confirmed that, in terms of quantifying “happiness,” spending money on oneself barely moves the needle, but spending on others causes a significant increase.

So what does this mean for think tank directors? For Brooks it was clear. In his role he wasn’t just asking for money but giving meaning to the lives of the people, families, foundations that support the AEI. He argues:

Donors possess two disconnected commodities: material wealth and sincere convictions. Alone, these commodities are difficult to combine. But fund-raisers facilitate an alchemy of virtue: They empower those with financial resources to convert the dross of their money into the gold of a better society.

Think tanks need to being to use these ideas to up their game in the domestic funding front.

Policy relevance is only one side of the equation

This means that think tanks cannot just ask: ‘what is relevant for policy makers’? Their funders are important, too. They need to find a way of connecting policy and funding, and by doing that involving their funders in the pursuit of their own objectives.

This may sound as an impossible task. Many researchers could complain that this would question their independence. They may argue that it would be a distraction from the already hard and time-consuming jobs of doing research and engaging with politics.

But both these complaints can be challenged.

First, there is no question about the independence of think tanks that rely (even to the extent of 20-30% of their budget) from the contracts (or accountable grants) of a few funders: think tanks are rarely independent. This is something that we must all accept. Across the world they are described -correctly, in my view- as pawns for other more important players: the State or Elites (political, economic or social).

Second, researchers in think tanks are already busy worrying about what they funders are interested in, what they may want them to do next, etc. The challenge here is to look for new funders. Funders that may want something else. That may ‘give’ for other reasons.

And this is the real challenge -or concern. Aid/foreign funding tends to come with lots of string attached but it is less contentious (in most developing countries). Bilateral funding for instance is driven by the funders’ own politics -if climate change becomes a big deal in the UK then DFID research funding will reflect it. And it arrives in-country at arm’s length of domestic politics. It is easily fudgeable (from one specific research project to the researcher’s own agenda) and its impact can be ‘demonstrated’ with anecdotal evidence. The funders, after all, are not there to corroborate.

It doesn’t matter too much, then, that the funders have their own agenda. Their distance from the think tanks’ politics is enough to award a sense of independence that makes the researchers comfortable enough.

But when funding is domestic, the funders have, inevitably, an agenda of their own. They are therefore more engaging and present. Their commitment cannot be easily fudged into whatever the think tank wanted to do -not unless or until the think tanks themselves have gained the kind of reputation that turns them into a necessary institution for their usual funders. Domestic think tanks cannot be fooled about think tanks influence either. They are part of the same political space that the think tanks inhabit. When the judges of the first Think Tank Awards in Peru met to discuss the applications they used their own knowledge of the national policy research scene to make their final judgements.

The challenge of raising domestic funds is not small. And the effort will be significant. But it is my view that unless think tanks in developing countries begin, sooner rather than later, a concerted effort to depend solely (or mostly) on their own societies for their funding they will never be truly sustainable. And their independence, well, just as questionable.

Foreign funders should build this into all their funding to think tanks. Not necessarily making them solely responsible for mobilising domestic funding but ensuring that, through their own aid programmes and in coordination with other funders, their funds leverage domestic funds and the public and private capacity to fund research locally into the future.