Domestic Think Tank Funding: what can foreign donors do?

Domestic Think Tank Funding: what can foreign donors do?

Enrique Mendizabal
Founder, Director, On Think Tanks

This article focuses on what current foreign funders could do. Foreign funding for Think Tanks is a common occurrence in developing countries. Whereas The New York Times considered it a scandal that US Think Tanks were receiving funding from foreign sources to influence the American government, Aid agencies and foundations continue to fund Think Tanks in Latin America, Asia, and Africa without raising as much as an eyebrow.

However, foreign funding for Think Tanks, which has been a godsend for some, poses significant risks to Think Tanks.

Funding decisions at bilateral agencies are the consequence of political processes that take place well beyond the sphere of influence of the funds’ recipients. For example, Indian think tanks have no say over how much money is allocated to them, this is decided by  a political process that is beyond their control.

Funds come attached to conditions; whether we like it or not. This does not mean that all Think Tanks will have to re-focus their work, but some will be left wondering if, maybe, they should. In any case, everywhere in the world, the agenda of Think Tanks are often influenced (or at the very least informed) by their funders’ own interest and it is no different in developing countries. The trouble with foreign funders, however, is that they are foreign to the politics in which the Think Tanks operate and can therefore have an interference effect which can back-fire on Think Tanks’ reputations.

But most importantly, foreign funding is risky because it is likely to diminish as countries develop and this can leave Think Tanks in a vulnerable situation. So what can foreign funders do to help Think Tanks re-balance their funding sources away from foreign sources and closer to home?

• Raising the visibility of Think Tanks and their value by promoting initiatives such as national annual think tank awards -increasingly including the private sector as participants, judges and, hopefully, as sponsors of these efforts.
• Working with future generations of philanthropists. For instance, setting up groups of young patrons to bring together people in their 30s to act as an informal group of patrons (contributing very little money) for the Think Tanks they support with the aim of ‘teaching’ them how to support research institutions. In the future they will be more willing to fund them. Individual Think Tanks could also take on this model. 
• Work with future generations of Think Tank leaders to help them to think this through early on in their careers. This is behind the School of Thinktankers that On Think Tanks and Canning House have launched. The school will take a group of young future Think Tank leaders from Latin America (as a pilot) to London to be inspired by the Think Tank and policy research community there. 
• Use foreign funding to leverage domestic funding. This may take more money but this is money that is already there. Initiatives like the Think Tank Initiative or the Think Tank Fund could organise dinners or conferences at which Bill Gates, George Soros, and other philanthropists meet their local counterparts and encourage them to fund their own research and research institutions. They could ask them to pledge, there and then, money to research and Think Tanks in their own countries. 
• Another way of leveraging funding is to condition funding to Think Tanks’ capacity to raise domestic funds. It could start with small amounts (10%) and grow, year on year, until it eventually takes over. Multi-year initiatives should follow this approach to give Think Tanks time to plan ahead and encourage them to develop a clear strategy to achieve this. 
• Reward ‘graduation’. Foreign funders could reward Think Tanks that no longer need them with a ‘parting bonus’. A one-off and up-front payment to build their reserves as a way of addressing the new risks that new funding sources may bring. This bonus could be on the condition that they would not return to the foreign donor. 
• Fund research on funding models to make it easier to donate. It was interesting to find out that funding mechanisms that were quite common in the UK, for instance, were not known by Peruvian ministries or philanthropists. Something as simple as setting-up a large umbrella programme that would be charged with funding smaller projects instead of trying to fund smaller projects directly.

Think Tanks have a responsibility too. It is all too easy to benefit from relatively easy-to-secure foreign funds. Foreign funders are also much more generous than their domestic counterparts. Rather than wait and hope for a second or third tranche of funds, organisations should look for domestic alternatives and encourage their foreign funders to support them in this process.

Note from the Author: On Think Tanks has given the topic of think tank funding a great deal of attention. If you are interested in learning more about it you can read its Topic Page on Funding. But most of the articles written focus on what think tanks can do to raise funds and, more recently, what think tanks can do to generate domestic funds.