We conducted the 2026 State of the Sector Survey over several months, collecting 295 complete responses from 94 countries with support from 24 partner organisations. The OTT Conference in Rabat provided the first opportunity to present these findings to an audience who could relate to the data and respond based on their regional experiences.
The session “Hacking the Data: State of the Sector 2026” featured four panellists who provided regional perspectives often lost in aggregate data: Gabriela Suárez (FARO, Ecuador), Tlegen Kuandykov (CAPS Unlock, Kazakhstan), Stewart Nixon (IDEAS, Malaysia), and Wessam El Beih (IDRC, Middle East and North Africa).
Below are key insights from the session that remained with me after the discussion concluded.
The political environment is a primary obstacle, not a background condition anymore.
Funding remains the leading challenge in this year’s survey, cited by 64% of respondents. However, the most notable trend is the rapid rise in concerns about the political environment, which increased by 8 percentage points as an anticipated future issue. In the EU, political challenges have now surpassed funding as the primary expected obstacle for the next year. It remains to be seen whether this represents a structural shift or a temporary change, and whether think tanks perceive the environment as becoming too politicised for effective engagement.
Tlegen described Kazakhstan as an environment where political risk is ever-present. On the day of the session, a media partner’s website was taken offline, and before the conference, another civil society organisation was hacked on social media. Staff in Kyrgyzstan face fines and imprisonment. Think tanks in the region now substitute terms like “war” with “geopolitical tension” in public communications as a necessary survival strategy.
Gabriela explained that in Ecuador, the government leverages internal security crises, such as organised crime and state-of-emergency declarations, to justify restricting civic space. The data supports this: 21% of think tanks in Latin America and the Caribbean report government hostility as an obstacle, compared to a global average of 8%.
Wessam highlighted that the increasingly difficult political environment is indicative of a global trend toward a “shrinking and contested policy space”.
She noted that, due to these challenges, think tanks can no longer focus exclusively on producing high-quality research. They must now devote significant resources to managing political risks, defending organisational legitimacy, and navigating pressure to align politically to ensure their perspectives are considered.
This has clear implications for how funders deliver support. Research projects will just not be enough to cover the rising indirect costs organisations need to meet to survive!
Wessam further observed that in the Middle East and North Africa, the political environment imposes a “structured ceiling” that limits the amount of research conducted and the elevation of that research to the policy level. As a result, the connection between research and policy in the region remains “premature” and “infantile.”
Stewart reported that some European funders have warned Southeast Asian organisations that current grants may not be renewed, as donors are redirecting international aid budgets to address domestic political pressures, especially the rise of right-wing parties. He also highlighted a broader trend of securitisation, with international budgets increasingly allocated to defence rather than aid.
The speakers noted that political shifts in the Global North pose a direct threat to think tanks in the Global South that rely heavily on foreign funding, and that this geopolitical reality is clearly reflected in the survey’s findings on funding declines.
Reserves: bridging the gap between data and reality
The findings on financial reserves are challenging to present without abstraction, so I will address them directly.
According to the survey, 22% of think tanks have no financial reserves and operate month to month. An additional 18% have less than three months of operating costs, placing 40% of the sector at immediate risk if funding shifts suddenly. At the other end, some organisations hold more than 12 months of reserves. In the Anglosphere, a majority (55%) have over six months of reserves, and 21% report more than a year.
Stewart noted that achieving even three to six months of reserves requires financial discipline that most organisations find difficult to maintain. Six months is considered comfortable, but strategies to reach twelve months often involve understaffing projects, which can lead to staff burnout.
Gabriela observed that most surveyed think tanks in Latin America have some financial reserves, but these are typically limited to three to six months of operating costs. She attributed this to the region’s reliance on international grants, which generally last six to eighteen months. While short-term funding enables a modest financial buffer, operating with such limited reserves leaves think tanks highly vulnerable.
Tlegen described a more challenging situation for independent think tanks in Central Asia, noting that he is unaware of any organisation in the region with meaningful financial reserves. With minimal local philanthropy and strictly project-based international funding, think tanks lack the financial stability needed for long-term planning. As a result, organisations operate in a constant state of survival, dependent on securing their next project grant.
Wessam reframed the issue, arguing that the core problem is not the level of reserves, but the volatility of funding that necessitates them. When income is received in project tranches, donors do not cover indirect costs, and grant cycles are unpredictable, institutional memory erodes. In this environment, organisations focus on survival rather than long-term development.
She referred to the missing element as “invisible infrastructure”: indirect costs, talent development, and governance. These factors, though absent from grant deliverables, are critical to an organisation’s long-term sustainability. The current project-based funding model systematically underfunds these areas. As a result, 54% of the sector, which relies primarily on project grants, faces direct limitations on organisational development.
The discussion further highlighted that donor disbursement methods significantly impact an organisation’s ability to build financial reserves. When donors pay project funds upfront, think tanks can hold the funds and generate reserves through interest. However, if payments are made in instalments or only upon project completion, organisations lose the opportunity to accumulate savings.
AI: widespread adoption, uneven application
Eighty-four per cent of respondents report using AI tools. In the EU, adoption is 92%, while in South Asia, the lowest-adoption region, it stands at 69%. At this stage, asking whether an organisation uses AI is no longer a meaningful differentiator.
The key difference lies in how AI is used. Communications (76%) and research (75%) are the primary areas of adoption, while only 26% use AI for fundraising. Notably, the area where think tanks face the greatest challenges—securing flexible, sustainable income—has the lowest AI adoption.
Wessam and Gabriela highlighted an aspect not fully captured by the data: ethics. In Latin America, panellists noted that think tanks using AI for evidence-based research face unresolved questions about credibility. If a think tank’s value lies in rigorous, independent analysis, integrating probabilistic tools requires careful governance. While most organisations are not avoiding AI, the conversation about ethical governance is not progressing as quickly as adoption.
Stewart offered a perspective from Southeast Asia, noting that concerns extend beyond the tools themselves to the people who use them. He observed that younger researchers increasingly use AI to accelerate output, sometimes at the expense of developing deeper analytical judgment. The sector may face a “proactive learner” deficit, potentially exacerbated by AI adoption. It remains unclear whether this is a generational shift or a broader sector issue, but it warrants attention.
The question of who’s in the data
Near the end of the session, Stewart raised an important issue that often receives insufficient attention: survivor bias.
The organisations represented in our survey are those still in operation. Those that have closed due to factors such as USAID cuts, foreign agent laws, or political crackdowns are not included. As a result, the sector we measure consists only of those that have survived.
This presents a genuine methodological challenge. To observe organisational exits and entries, a longitudinal panel design is required that tracks the same organisations over time. Without this approach, it is unclear whether the finding that 42% of organisations expect income growth reflects actual resilience or simply the absence of less optimistic organisations.
Surviving organisations may grow not due to an expanding funding pool, but because fewer organisations now share available resources. Notably, one in three respondents who anticipate sector contraction still expect their own organisation to grow. This may reflect strategic clarity, selection effects, or both, though the exact balance remains unknown.
What does this mean for the full report?
The full State of the Sector Report will be released in September 2026. The session in Rabat underscored the importance of directing the report’s recommendations specifically to funders.
The argument for portfolio funding rather than project funding, for covering indirect costs, and for investing in leadership and governance—referred to as “invisible infrastructure”—is not new. OTT has advocated for these changes in previous editions of the State of the Sector. What is different in 2026 is the convergence of financial fragility, rising political hostility, and dependence on foreign funding. Organisations reliant on project grants, without reserves, and operating in shrinking civic spaces have limited capacity to withstand financial or political shocks.
The session also highlighted the limitations of aggregate data and the value of disaggregating results by organisational characteristics, such as leadership gender, organisational size and age, funding source, and whether a think tank relies on foreign project grants or domestic funding. These distinctions are important, as the data can vary significantly depending on these factors.
The conference theme was “think tanks and trust.” The data suggests that trust from funders, governments, and the public becomes more difficult to establish when organisations are focused primarily on survival. This is a key argument the full report should emphasise.