As I wrote in my previous post, my first job in the development industry (or should I say public policy industry?) was in CIPPEC (Argentina) raising funds from individuals. Our team had one person dedicated to corporate fundraising, another one for international cooperation and me, fundraising from individuals.
As its founding director, Nicolas Ducote, said in an interview, since its inception, CIPPEC’s funding model was designed to obtain funds from a small number of individuals (what we called “free funds”). The plan was to get more than 50% of the income from sources that would allow free allocation of resources so as to strengthen the institution, sustain its structure, and define its priorities independently. Only when the crisis in 2001 and 2002 exploded, CIPPEC went through a period of scarcity of individual donations (mainly out of fear and uncertainty on how Argentina would turn out, what would happen, if investing in public policy was worth it, etc.). This, added to currency devaluation, made the think tank think about the need for more foreign funding. So 2002 was the first year that CIPPEC invested part of its resources to employ someone to search for funding from the international cooperation sector, 2 years after its foundation.
A fourth source of funding has become the State, which eventually accounted for about 25% of the income and which allowed more and better influence.
So, I have always had in mind the importance of institutional strengthening and independence of think tanks and particularly the role of domestic funding. Unfortunately the debate in this sector tends to be centred on what international donors should behave like instead of discussing how to nurture local ones. The role of local funders is something that Enrique Mendizabal has argued for several times in this blog.
I too would like to see the debate shift to making domestic funds available, encouraging domestic wealthy individuals and companies to get involved in its country development, strategically involving them not only by providing funds but by being part of a higher change, etc. Why, when countries are experiencing a considerable economic growth such as Brazil is doing now, organisations don’t think of developing domestic funding? Intrigued by this, I started talking to different organisations in Brazil; I was pleasantly surprised to hear that there, the situation was rather encouraging. There is a kind of balance between international cooperation and domestic funding.
For the cluster model (centres associated to Universities) the situation is easier because they usually receive funds from the government and their alumni. Also, part of the fees paid by students goes to the research departments. Public think tanks like IPEA are completely funded by public funds. But what about independent think tanks? What is their funding models like? And moreover, how do these different models affect their influence?
Clara Richards: What areas of research are more likely to receive funding in Brazil?
Sandra Polonia Rios: Both foreign funds and domestic funds have been more oriented to environmental causes and social topics, such as poverty fighting. So what usually happens is that often institutions tend to orient their research to these areas in order to receive more funds, they end up adapting their content in order to get resources. However, for some of us, that we work in trade policy it is impossible to do this move and therefore we need to find other fundraising strategies.
CR: What are the key sources of funding? I realise that compared to think tanks in other developing countries, in Brazil organisations have a considerable income from the private sector, is that accurate?
SPR: You are right that think tanks receive fund from Brazilian companies but the amount is not very relevant, it doesn’t cover the main expenses, the fixed costs. Therefore, organisations are not able to develop independent research by just receiving private funds. Regarding individuals in Brazil, they usually contribute to social or environmental causes; they want to donate to organisations that have concrete outputs instead to those that produce research. People want to see where their money goes to; therefore they don’t trust funding research because they can’t see short term results. It is a little bit different with more ideological think tanks (for example those related to former presidents) who might have people interested in funding certain type of research.
I’m sorry to disappoint you but I think international funds are still the main source of income. Funds from government are available in a minor degree. First because the government already has its own think tank, IPEA, so a lot of the public resources go there. Second, if they fund think tanks they usually fund centres that are related to universities, like Fudacao Getulio Vargas. Think tanks linked to universities are more prone to receive funds not only from government but from international agencies because they are already well established. They are linked to traditional universities, they have access to infrastructure, they benefit from the institutional background and they are surrounded by students who are willing to do research and who pay fees that ultimately also fund the centres. However, there are some disadvantages, they are very bureaucratic. For some project that can be harmful, some international organisations tried to work with them but they find the processes tedious and long.
The think tanks that find more difficulty in getting funds are the independent ones. They don’t generally get much core funding. They usually survive by projects, which are either funded by international cooperation or Brazilian companies. And the difficulty when they get money from companies is that usually it ends up being a consultancy activity instead of a research activity.
CR: What do you think is the main obstacle for companies or individuals to fund think tanks?
SPR: One issue is that think tanks don’t produce visible outputs. If a company has to choose between funding the construction of a school, a library or a theatre, they will choose that over research. They want to see what the money is being used for. Nevertheless, more than that in Brazil it is a problem of vision and culture; it is not in people’s mind set to fund long term initiatives, research that can structurally change the country. Individuals or even entrepreneurs are not used of being part of this kind of activities. What they do is contribute to associations or institutions that do advocacy with projects that they are interested in.
CR: In what way do funds (either international or domestic) affect the independence of the research agenda?
SPR: Of course, those that have access to core funding have more freedom to define an agenda; those that don’t are usually going to follow someone else’s. The latter (and unfortunately, the majority) try to find resources for specific projects. The only organisation that I would say shapes a pretty broad research agenda – with its ups and downs – is IPEA. This think tank, although it is public, has maintained a relative freedom and independence from the incumbent administration. Moreover, while it was founded by the Minister of Planning during the dictatorship, he personally guaranteed the degree of freedom that the researchers should have. He is known to have helped many people from the left who worked in IPEA during this period of time. What helped to establish this organisation is that in those years the State was concerned with and put more effort on long term planning, therefore the idea of having an institution that could think of economic planning convinced the military regime. IPEA attracts many researchers that are interested in public topics so although it is a public institution, its staff is very diverse and independent in the way of thinking. As you can imagine, given the resources and power such institution has, they are more able to develop a research agenda than any other institution in Brazil.
CR: Do you think the quality of research varies depending on the source of funding?
SPR: I wouldn’t say that the quality in terms of content varies, but for sure the areas of research are modified. In terms of method, it is affected in the sense that the research could be deeper and more precise. What usually happens is that depending on the donor, we need to define the level of precision that we can do. When we had core funding the topics and the depth of the research was defined by us but you can’t do that when someone is commissioning your work and only want to cover generalities.
CR: Do you think that organisations that receive domestic funds have a better chance of influencing policies?
SPR: When you have funds from the government it’s easier to influence actions, ideas and decisions because you work directly with them you have a chance of interacting and making recommendations directly. While it also helps to leverage your network. Having money from companies increases the chances in the sense that the links with stakeholders is wider; but it also increases the risks in the sense that you might have to respond to specific interests.
Overall I would say that domestic funds help a lot, not only for the money itself but because of the engagement that means working with people from your own country. Hopefully domestic funds will flow more in the upcoming years.
If we refer to universities, which some are linked to ideological areas, they depend on who is in government to receive funds, some universities get benefited with certain governments and therefore they are more likely to influence decisions. It is not so much the origin of the funds that affects influence but it has more to do with the combination of the way of thinking and the ideology of the government linked to different universities.
CR: Given the rise of the Brazilian economy, do you see philanthropy growing in the same way?
SPR: I can see philanthropy growing but linked to social activities, such as education and poverty fighting but not research in the public policy areas. I don’t see much engagement from leaders or companies. Companies in general have this particular problem of funding independent think tanks; they don’t want to give money to organisations that produce public policy recommendation that are not aligned to their interests. For example, if there is a project in green growth and the recommendations are not in line with what the companies in the area would like to see then they will not support the initiative. But I think that’s a common problem everywhere.
However, I’m quite optimistic in the development of think tanks, with all the difficulties we have with funding, I see a movement and the creation of new think tanks, there is a lot f more interaction between them, and we’ve been seeing that the policymakers are getting more interested in think tanks. It is difficult to have a minister involved but second level bureaucrats are getting involved. The media also uses think tanks as a source of information however a difficulty to engage with them is that they are generally focused in short term topics and it is difficult for think tanks to engage when working on long term topics. But in general they consider think tanks as a relevant source ok knowledge and they are very receptive.