Ben Soskis, a consultant who has been working with us as part of our History of Philanthropy project, recently finished a case study on the founding and growth of the Center for Global Development (CGD), a think tank that conducts research on and promotes improvements to rich-world policies that affect the global poor.
We are very impressed with CGD and its accomplishments. Earlier this year, we announced a $3 million grant to CGD. Our writeup includes a review of CGD’s track record, concluding that “it seems reasonable to us to estimate that CGD has produced at least 10 times as much value for the global poor as it has spent, though we consider this more of a rough lower bound than an accurate estimate.”
CGD appears to be an example of a funder-initiated startup: philanthropist Ed Scott was the driving force behind the original high-level concept, and he recruited Nancy Birdsall to be CGD’s leader.
There are a number of similarities between this case study and our recent case study on the Center on Budget and Policy Priorities (CBPP). In particular, both cases involved a funder exploring an extensive personal network, finding a strong leader for the organization they envisioned, committing flexible support up-front to that leader, and then trusting the leader with a lot of autonomy in creating the organization (while retaining a high level of personal involvement throughout the early years of the organization). However, there are a couple of major points of contrast: the crowdedness of the landscape and the amount of money committed.
Amount committed: in the case of CBPP, the founding funder “committed $175,000 in the first year  and $150,000 in the second year, and asked CBPP to find other supporters so it could reduce its support after that point.” In the case of CGD, the founding funder committed $25 million, to be disbursed over five years, in 2001.
Crowdedness of the field: while CBPP appears to have had a unique vision from the start, the original vision for CGD overlapped significantly with the missions of multiple other global-development-oriented think tanks, including the Wolfensohn Center for Development at the Brookings Institution (founded in 2005 and closed in 2010) and the Overseas Development Council (established in 1969 and closed in 2000, a year before CGD started). There are a number of possible explanations that CGD appears to have had unusual success, including the fact that it was started at an opportune time (as general interest in relevant issues were increasing) and the fact that its leader (Nancy Birdsall) eventually developed a unique vision for the institution. Another possible explanation highlighted by Dr. Soskis is the generous amount committed from the start, with few strings attached:
Interviewees returned to this initial pledge on several occasions in highlighting what they believed to be a significant factor in CGD’s rise. The commitment signaled that the new institution would have the resources to survive beyond the short-term, that it would have staying power, a crucial inducement in attracting top talent (especially considering ODC’s demise). As CGD’s Todd Moss explains, “trying to get top class people without having money in the bank can be difficult, because people are not going to leave a good job at the World Bank or a university if they think you might not be able to pay them in two years.”
Dr. Soskis also discusses specific contrasts with other think tanks in the same space that didn’t have comparable funding, and experienced problems such as getting “ ‘sucked into essentially acting like consulting firms’ … bidding on short-term contracts from the UN, multilateral or governmental agencies” rather than working on independent projects that could have outsized impact and pull in new donors.
Between this case study and our review of CGD’s track record, we’ve now assembled a full story – spanning 16 years – of a philanthropist having outsized impact by making a long-term bet on a new institution.