Fallout: The Financial Crisis

Money getting tighter for thinkers

Marketplace Staff Dec 10, 2008
HTML EMBED:
COPY
Fallout: The Financial Crisis

Money getting tighter for thinkers

Marketplace Staff Dec 10, 2008
HTML EMBED:
COPY

TEXT OF STORY

Steve Chiotakis: Seems like everyone’s affected by this economic crisis. Even Washington think tanks. You know, the ones that try to find answers to problems? Contributions are down and some of these groups are having to scale back. And that could have an impact on future policy initiatives. Ronni Radbill reports.


Ronni Radbill: The fate of Washington’s 340 think tanks isn’t on most peoples’ minds in a struggling economy.

But thinking costs money. As stock values tumble, so do foundation endowments, which help fund many smaller, non-partisan policy shops.

Steve Gunderson, president of the Council on Foundations, says in the last few months, the financial bottom fell out.

Steve Gunderson: We’ve never had a drop of this magnitude this quickly. In two-month period, to literally to see a 30 [percent] to 50 percent evaporation of endowment.

Gunderson estimates endowments have lost well over $200 billion in value over the past year.

Jamie Court, president of the nonprofit Consumer Watchdog, says that’s not good for the general public that wants issues like health care, energy independence, and government reform addressed.

Jamie Court: The think tanks that are going to be hurting, unfortunately, are the ones that are more impartial, non-partisan.

Meanwhile, influential policy shops like the Heritage Foundation, Competitive Enterprise Institute, and Cato are on better financial footing, receiving donations from individuals, foundations, and corporations.

Court: The think tanks that are actually going to do very well in this climate are the ones that are funded by industry. Clearly big companies have a financial incentive to pour maybe even more money into think tanks that think like big corporations.

With a changing political climate, a worldwide financial crisis, and two wars, there’s going to be a lot to think about in Washington.

Jim McGann directs the Think Tanks and Civil Society Program at the University of Pennsylvania. He fears think tanks won’t be able to develop new policy initiatives.

Jim McGann: How prepared are they, given the financial constraints, to do the big and small rethink on a whole range of policy issues — and I think given the constraints, the answer to that is unlikely.

What is likely is that a steep recession could push many of the city’s think tanks into shutting down, just as a new administration is hungry for impartial views from some of the brightest minds in the nation’s capital.

In Washington, I’m Ronni Radbill for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.