Think Tanks – they are referred to in the news all the time: “The XYZ Policy Institute, a think tank, in a recent research whitepaper has concluded that by 2043 99% of Americans will have diabetes.”* What exactly is a think tank? How do they make money? Should we trust their research?
What is a Think Tank?
Think tanks have been described as “universities without students.” According to the University of Pennsylvania’s “Think Tanks and Civil Societies Program” which researches think tanks:
- Think tanks are tax-exempt organizations that bridge the gap between academia and public policy makers.
- Think tanks engage in public policy research and analysis across any number of issues: economics, taxation, healthcare, energy, the environment, international affairs, politics, etc.
- They generate policy-oriented research, analysis, and advice on domestic and international issues that enable policymakers and the public to make informed decisions about public policy issues.
- Think tanks may be affiliated with political parties, governments, interest groups, or private corporations or constituted as independent nongovernmental organizations (NGOs).
- The goal of many of them is to serve the public interest as an independent voice that translates applied and basic research into a language and form that is understandable, reliable, and accessible for policymakers and the public.
According to The Economist:
A good think-tank helps the policymaking process by publishing reports that are as rigorous as academic research and as accessible as journalism. (Bad ones have a knack of doing just the opposite.) They flourished in the 20th century for two reasons. Governments were expanding everywhere, meaning there was lots of demand for policy expertise. And the arrival of 24-hour news created an insatiable appetite for informed interviewees.
There are a lot of think tanks! As of 2017, according to the University of Pennsylvania, there were 7,815 think tanks globally. The U.S. has about 1,800. 400 are located in D.C. The number of think tanks has greatly increased; there were about 45 think tanks in the U.S. after WWII.
Some of the major think tanks:
- The Heritage Foundation (conservative policy)
- Brookings Institution (progressive policy)
- The Kaiser Family Foundation (focuses on healthcare)
- Human Rights Watch (focuses on international human rights)
- Council on Foreign Relations (international affairs)
- Cato Institute (libertarian)
- American Enterprise Institute (conservative/neo-conservative policies)
- Center for American Progress (progressive policies)
- National Bureau of Economic Research (economic policies)
- Pew Research Center (focuses on social issues)
- The RAND Corporation (wide ranging issues, often scientific and technical)
How do Think Tanks Make Money?
They are primarily funded by private donations. Some receive government support or grants from charitable foundations. Universities sometime make grants to think tanks. Some were endowed by their founder (e.g. The Commonwealth Fund, Public Policy Institute of California). Some think tanks have revenues of tens of millions of dollars per year and staffs of hundreds of employees.
Why would someone give to a think tank? Think tanks are supported by individuals and institutions that support their areas of research and often their world-view. For example, an oil company likely would give support to a different think tank that does work on the environment than an alternative energy company. For instance, as reported by Business Insider, Wal-Mart and the Walton family typically donate to conservative think tanks but gave to a progressive think tank in support of Obamacare with the thought that the requirement to provide health insurance would drive up costs for their small-business competitors.
Is Think Tank Research Reliable?
As there are many types of think tanks with a great variety of funders it is not appropriate to paint their research with one broad brush stroke. Many think tanks produce very high quality, important research reports that are objective, while others have narrow, partisan agendas and provide biased reports in service to their funders. As think tanks are not required to identify their donors, it can be difficult to know in whose service they might be.
Policymakers are very dependent on think tanks and according to National Affairs magazine, think tanks can “serve as governments-in-waiting for the party out of power, providing professional perches for former officials who hope to be back in office when their party next takes control of the White House or Congress.” Many (most) Reagan administration policies were based on Heritage Foundation policy suggestions. Likewise, The Heritage Foundation claimed that one-year into Trump’s presidency 64% of their policy recommendations had been adopted by the administration.
Think tanks in the mid-20th century were generally less partisan than in the 21st century. Again from the National Affairs: “Each of these new think tanks must somehow distinguish itself from the others. And as such distinctions become increasingly narrow, institutions have found that they can stand out by adopting a more strident ideological bent — a practice that has led to think tanks’ increasing politicization.”
Bottom line: think tanks provide a valuable service in terms of research and policy recommendations. However, it is important to recognize that many (if not most) think tanks are partisan and to treat their research and recommendations with skepticism.
*I made up this statistic and think tank.