[This article is part of a series of reflections from trainers of several capacity building activities within the OTT Consulting project: Strengthening the sustainability of ILAIPP and its members.]
If there is no core funding, think tanks rely on projects to keep going. This often is difficult work. Yet, what approaches can think tanks follow to develop a portfolio of services (i.e. a range of activities that contribute to funding the organization)? Although context will differ, I would suggest that there are four considerations when developing a portfolio of services. Ideally, services should be unique, repeatable & externally driven, profitable, and have people that are willing to pay. What this means will differ from country to country and context to context, and even over time.
Here, however, some considerations based on my own experience from some time ago, when I developed such a portfolio.
1. Ideally, the service should be unique.
It should rely on a strength that is hard to copy or emulate. In business-speak, what is the unfair advantage that a think tank can develop, to protect itself from competition and keep high revenue margins that help to fund core costs? If your think tank does not have any such advantages now, it can still develop in that direction and build such advantages over one or two years. For the Caucasus Research Resource Centers, where I worked across Armenia, Azerbaijan and Georgia, with occasional research in Central Asia, the focus was on survey methodology. We focused on becoming good at that, on all of its dimensions, including questionnaire development, accurate translations, meticulous pretests and reliable sampling methodology. This required quality control at all steps, and a culture of teamwork, plus the ability to deliver engaging presentations.
2. Services should be repeatable
Research gets easier if you can do it over and over again, and improve every time. By contrast, conceptualizing new research is time-intensive and exhausting. As in the film industry, sequels in research greatly reduce risk. They also reduce marketing effort, as the audience already is familiar with the product. In the very best case, the repetition is externally driven by regular events. For us, such events were elections. They typically take place on the national and municipal level, sometimes also including presidential elections. When doing research around elections, you do not need to drum up any interest. The public is engaged, entirely by itself, again saving on marketing costs.
3. Services need to be profitable
Bigger budgets almost always have bigger margins. Often, the administrative and coordination load for a $5,000 project is almost the same as that for a $50,000 project – and even if it turns out to be less, it is rarely 10% of the bigger project. We learnt this the hard way when initially we convinced United Nations agencies to fund research fellowships, which we administered. We found ourselves sandwiched in the middle, responsible for the quality of the projects, but not happy with what the fellows were delivering. Considering the effort, we lost money on these projects. The donor was happy to continue, but we abandoned the idea.
By contrast, we did much better when we focused on face-to-face surveys, as well as on extensive media-monitoring in the run-up to elections. These tend to be big-ticket items, on which donors are willing to spend if the results are of very high quality.
With regards to profitability, focus groups for us fell somewhere in the middle. These can require significant management time for analysis and to provide compelling analytical summaries, and some of the most experienced team members need to devote a significant amount of time. Thus, we earned most of our income via surveys.
4. There have to be donors (international, local, philanthropic, corporate) who are willing to pay
In our experience, what worked in Georgia did not necessarily work in Armenia, and certainly did not in the authoritarian context of Azerbaijan. Nor is the donor money just “there”. In many cases, you need to develop the relationship over time so that funding gets redirected towards the services that you can offer. As fundraisers say, it is a relationship, not a transaction. What goes along with this is that quality and crisis management are essential. Things will go badly wrong in your research projects, from time to time. If you are good at responding, a crisis may strengthen the relationship to your donors. Conversely, if you get it wrong, they may not come back. It is important to prepare, to think about crisis management (I have a chapter on this in a handbook), and to take the long view.
These four factors – unique, repeatable, profitable, people willing to pay – by themselves do not yet describe a strategy, but they can help to develop one. The earlier you develop the strategy the better. You cannot suddenly be unique, just from an act of will. However, you can develop in that direction as part of a thoughtful strategy. In this, it makes sense to learn from other examples. I provided some examples from my own experience, but there are many others on the On Think Tanks blog, including IEA Ghana hosting regular presidential debates (definitely unique and repeatable, most likely profitable), to name just one example.
Look at what other think tanks are doing. The most important text to read most likely is 12 Steps on Policy Change, by Ruth Levine and Lawrence McDonald, since this provides a roadmap towards having an impact. Raymond Struyk’s book on Improving Think Tank Management also is a very good guide to internal quality control. Moreover, a site that I put together, www.findpolicy.org, should make it easier to figure out what kinds of services think tanks around the world are offering. In combination, these resources should help think tanks to chart the best possible strategy for their own contexts, when developing a portfolio of services.
Have an example to share? Please use the comment section below.