What happens when foreign donors leave (and they will)? Domestic funders wanted

17 November 2014
SERIES Funding for think tanks part one: domestic funding 16 items

In India, domestic philanthropists are picking up the bill. A recent article by  for The Economic Times: Indian philanthropic money into think-tanks silencing foreign funding question paints an interesting and exiting future for think tank in India. The title of the article gives away its motivation. A couple of months ago, The New York Times published a series of articles challenging the allegedly undue influence of foreign funders on US-based think tanks. The issue is of particular importance for developing and emerging economies where economic and social policy research (even political research) is heavily funded by foreign governments, multilateral agencies, NGOs, and foundations. This debate is not new in India where the support provided to think tanks by the Think Tank Initiative (TTI) was received with both open arms and some concern -though it should be noted that the TTI offers a model that could be copied domestically.

But foreign funders pose other challenges, too:

  • They tend to set their own agendas, forcing think tanks to negotiate (sometimes unsuccessfully) with them to find a middle ground between what is important for their countries and what is a priority to the funders.
  • They are, for the most part, unaware or only vaguely aware of local politics and cannot therefore easily judge their grantees contribution to their societies; tourist funders demand excessive monitoring and evaluation from think tanks. Anyone who follows the blogs or email posts of Aid ‘research uptake’ funders and consultants will be aware of their obsession with ‘understanding politics’ in the countries where they intervene; that they have to try so hard is a sign that they do not understand.
  • They are unreliable, too. Their funding decisions are based on political, financial and technical factors that come together thousands of miles away in the boardrooms or offices of governments, corporations or foundations far removed from the political and financial cycles that affect think tanks.
  • They won’t be there in the long run. It is inevitable that foreign funders will leave. In most emerging economies, foreign funding is likely to start to dry out. This is already happening across Latin America where donors perceive that resources for research are not lacking -the problem is the willingness to pick up a bill that has been paid, for too long, by the aid industry. At the same time, governments are increasingly sceptical about the ‘good intentions’ of foreign funders. You do not have to be the US to question the intrusion of foreign governments in your politics. This is happening in India, Indonesia, Ecuador, and other countries, too.

In India, according to Karunakaran, some domestic philanthropists have stepped into the space left by exiting aid agencies. Motivated by a number of factors, they express a very progressive and enlightened concern:

Nitin Pai reveals that Rohini (of Infosys), as the angeldonor to the institution, made it clear that she disagreed with him on many contentious developmental issues but would still like to support him. Has her money changed the thinking process at Takshashila? No, he says. He wouldn’t have taken the money if the intent was to influence his thinking. “I cannot influence how people think; wouldn’t want to either,” explains Rohini. “But it’s important to have people of authenticity and integrity speaking up on issues, in a non-polarising way.” The idea is to trigger healthy debates, to have multiplicity of voices, of all hues and biases.

However, turning to domestic philanthropists for funding presents a number of new challenges for think tanks in developing countries.

Challenges of domestic funding

It is not easy to approach domestic funders. When I have talked to friends in the financial sector in Peru about whether they’d be interested in supporting Peruvian think tanks their first question often is: what are they? The ‘best known’ ones are not known at all outside the policy and donor communities to which they belong. At the awards ceremony for the Premio PODER, several of the private sector guests told me that although the think tanks being celebrated were working on issues of clear interest and relevance to them, they had never heard of them (at least had not come across them on a regular basis). Here were people with the money and the willingness to fund them but who had never been approached.

  • Which takes us to a first challenge: They do not know you. For many think tanks, used to a long and nuanced relationship with traditional research funders (mostly foreign), approaching new domestic funders involves a long-term effort to introducing themselves and their work to an entirely new audience. In some cases, this means that people who are at the top of their academic careers, who hold Phds from some of the best universities in the world, or who have even held important posts in government, now have to ‘sell’ themselves to often much younger and less experienced people who may or may not fully appreciate what they have been doing so far.
  • They do not talk like you: The second challenge refers to the language and the deeper concepts and ideas that they use. Think tanks are unlikely to entice new domestic funders with academic and technical jargon. Their potential patrons won’t be amazed nor amused by the constant name dropping of people they have never heard of.  They may be more likely to relate to mentions of authors of pop-economics or pop-science books than the emeritus professor of this or that. More to the point, they will want think tanks to get to the point. What is the big idea? How does this look like? What will the change be like? How will we know it has happened?  Think tanks need to learn entirely new ways of talking if they want to get their hands on this new money.
  • They have another definition of value for money: The World Bank or the Ford Foundation or IDRC may be OK with the idea of funding a think tank to write a book on access to education in peri-urban areas, for instance. They may even offer a very nice amount of money up-front for the researcher to go away for 6 months or a year to do the research and put together a book complete with theory, data sets, cases, and some policy recommendations. They would expect an event to launch the book and at least some media appearances. But a private foundation or an individual philanthropist will take a different approach. They will probably not offer all the money up-front; instead they will want to see that the think tank is able to leverage its own funds or funds from other funders. They may also not be willing to pay researchers fees comparable to those paid in the private sector; they would expect them to work for a lot less, at least in the beginning. And they would never agree to them going away for 6 months or more to do research without frequent updates, blog posts, events, media appearances and other communications that would give raise the project’s visibility. now all this does not cost much more money but it involved entirely different ways of working.
  • And what is your big idea? What is the product, the service, the solution to the problem you are trying to address. “More research is needed” may work for traditional funders but it is unlikely to work for a private philanthropist. He or she will want to know what is the take away argument or message. They will want to know what they can share with their colleagues. What is the effect that the research they have funded will have on real people? Few think tanks pay enough attention to developing big ideas or policy solutions to political, social or economic problems. Instead they opt to develop research portfolios on a range of research and policy interests. This is unlikely to work well with corporate funders or private philanthropists.
  • Finally, they won’t be too keen on helping to develop your capacity. Unlike Aid funders, domestic funders won’t be keen to support think tanks unless they can deliver on their promises. They will assume that if the think tank asks for funds it is because it is capable of using them effectively. It would not understand how is it that a think tank is able to promise better comms while at the same time ask for help to improve their comms capacity. Good governance and management systems will have to be in place before asking for and receiving funds from domestic philanthropists or corporates. It won’t be enough to say: “we are working on it.”

And there are many other challenges. All in all, this is an entirely new world for many of the most established and recognised think tanks. But it is a world that they need to get much closer to.

In doing so they will need to develop new fundraising and communication skills. They will have to embrace new research approaches, too. Think tanks will have to focus much more on ideas and arguments and less on project portfolios. They will have to invest a bit more upfront. And they will have to, at least at first, review their fees. The aid industry has, in many places to a worrying degree, inflated the cost of research to levels that are simply impossible to sustain with domestic funding and at local market rates.

In the long run, the benefits should be worth the adjustment, though. Domestic funders:

  • Will be less demanding of excessive planning, monitoring and evaluation
  • Particularly, they will be less demanding of evidence of influence -since they will, by the nature of their own involvement, know
  • Will be more accommodating of domestic agendas, less worried about the latest global aid hype and high level panel in need for research inputs. They will be more interested in think tanks that are relevant to local needs than to globally set agendas
  • And they will not go away. In the long run, foreign funders will go; but domestic funders won’t. They will always be there.