The Inner Workings of Think Tanks: Transparify Gives Us a Good Look

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December 11, 2014; Transparify

Several years ago in the U.S., there was significant interest in think tanks. Conservative political victories in Congress in the 1990s were attributed to conservative foundations’ financial support of such entities as the Heritage Foundation, the American Enterprise Institute, the Cato Institute, the Family Research Council, the Hudson Institute, and the National Center for Policy Analysis, just to name a few. Their influence in the political process demonstrated that ideas matter—and that building institutions capable of developing and promoting ideas was a critical tool for shaping the national political discourse. Due to perceptions of the influence of Heritage and other conservative think tanks, liberal groups played some catch-up with the creation of the Center for American Progress in 2003, Demos in 2000, and the New America Foundation in 1999, though in reality, several liberal think tanks were much older: the Institute for Policy Studies (1963), the Joint Center for Political and Economic Studies (1970), the Corporation for Enterprise Development (1979), People for the American Way (1981), and the Economic Policy Institute (1986).

Think tanks are multiplying domestically and internationally. In 2013, James McGann and his team at the Think Tanks and Civil Societies Program at the University of Pennsylvania counted 6,826 think tanks around the world, including 1,828 in the U.S.

A group called Transparify, funded by the Think Tank Fund of the Open Society Foundations, has just issued a report on the funding of 21 major think tanks in the U.S., revealing that for 2013 alone, they spent a cumulative $1 billion, employed 7,333 persons, and controlled $2.65 billion in assets. Because nonprofit think tanks in the U.S. file 990s, it was possible for Transparify to generate data on American think tanks, but it is difficult to imagine that comparable information could have been generated on a sample of 426 think tanks in China or the 122 think tanks in Russia that McGann counted. It should be noted, however, that the Transparify study omits university-based think tanks, because they typically do not file 990s separate from their parent academic institutions. That group includes highly influential—and often politically conservative—think tanks like the Hoover Institution (at Stanford University), the Mercatus Center (George Mason University), and the James Baker III Institute for Public Policy (Rice University). We would guess that university-based think tanks might prove to be a major area of think tank growth. Not surprisingly, Transparify found that RAND was the largest think tank by expenditure level, with expenditures of $275 million in 2013, followed by Brookings ($97 million), Heritage ($82 million), and the Urban Institute ($75 million). The largest liberal think tank in the Transparify list was the Center for American Progress, with $34 million in expenditures. In terms of assets, Brookings topped the list with a capital base of $404 million, followed by the Council on Foreign Relations ($377 million), the Carnegie Endowment for International Peace ($275 million), and RAND ($239 million). The American Enterprise Institute and Heritage, both conservative think tanks, ranked in the top ten with $178 million and $154 million in assets, respectively. None of the prominent liberal think tanks made the top-ten list, given that Brookings, the Urban Institute, and others are typically considered nonpartisan or middle of the road.

Financial resources count, but so do human resources. RAND was far and away the largest based on number of employees (2,028), followed by the National Bureau for Economic Research (653), Brookings (563), and Heritage (516). The Center for American Progress made the top-ten list with 328 employees.

This picture might be changing, however, with the 2013 results unlikely to be replicated in some think tanks’ financials for 2014 or 2015. For example, Heritage’s choice of former South Carolina Senator Jim DeMint as CEO has been greeted with criticism even within conservative ranks, especially since the usually reliable quality of Heritage reports and analysis has suffered, which may cause change in its fundraising numbers. Similarly, there has been a political fight for control of the Cato Institute in recent years concerning the Koch brothers’ desire for control and change at the libertarian think tank. We would also guess that, as in the legislative arena, the states are where the action is, leading to a further proliferation of state-based think tanks.

The question for all of the think tanks is whether they retain the kind of relevance today that they seemed to exercise in the 1990s, when think tanks were credited with enormous power to control the contours of political debate. Some think tanks might function as holding pens for future Democratic or Republican administrations. (For example, the staffing of the Center for American Progress often resembles a Democratic administration-in-waiting.) The key to the power of the think tanks—and the basis for a future Transparify list—is a ranking of think tanks by how many people they have populating offices of U.S. government.—Rick Cohen