As a Canadian, studying the output of American think tanks has become something of an obsession for me. For better or worse, though mostly for the better, think tanks are a foreign commodity in Canada. Sure, we have organizations like the Fraser Institute and C.D. Howe, which are our Cato Institute and Brookings Institution respectively, but they fill a narrow niche. Broadly speaking, most Canadian think tanks are little more than PO boxes with a landing page.
The austere job market for policy wonks in Canada is downstream of the country’s robust party system. Governing parties don’t need to outsource their policy development and, when they do, ideas can be supplied by ad hoc committees, commissions, and consultants that evaporate into the ether when their work is done. The parties themselves are highly member-driven. Some of my earliest memories were from the stuffy basement of our local Liberal Party headquarters where my parents volunteered. Though I barely understood what was going on, I relished the ritual of staying up past my bedtime to watch election results come in while old Anglican ladies manufactured triangular sandwiches.
American politics is a completely different beast. The framers of the U.S. Constitution had an aversion to partisan politics and so designed a system of checks and balances that grants individual elected officials enormous free agency. While transaction costs and the game theory that pulls electoral democracies towards a two party system—termed Duverger’s law—made parties an inevitability, progressive anti-patronage reforms and the move to primary elections have long since eroded the social base for thick, membership-driven political parties and the efficient party machines which excelled at delivering votes for politicians. .
Modern U.S. think tanks, and the broader nonprofit advocacy world, emerged in their place. Ostensibly nonpartisan organizations such as the Center for American Progress and the American Enterprise Institute serve as holding tanks and convening spaces for Democratic and Republican functionaries while they are in and out of power. Yet because the parties themselves contain internal factions, the establishment’s grip on power is contingent on the makeup of Congress and the stochastic process behind party nominations. Given tight staff budgets, lawmakers outsource their legislative, communications, and networking strategies to whichever policy outfit overlaps with their political philosophy and electoral base. This ideas industry allows movement conservatives to turn to the Heritage Foundation, trade unionists to the Economic Policy Institute, libertarians to the Cato Institute, and so on.
Other countries’ political parties outsource to independent think tanks too, but usually within the context of a formal parliamentary relationship. The Konrad-Adenauer-Stiftung in Germany, for instance, is an independent think tank that functions as the policy organ of the center-right Christian Democratic Union. Crucially, however, over 95% of its funding comes from the German government and they have no direct intraparty competitor. Such think tanks are thus more like adjuncts to the formal party system than genuinely independent policy actors. In contrast to the U.S. policy ecosystem, policy development is therefore far more aligned to party incentives, though at the potential cost of being overly conformist and deferential to the status quo.
Associations Without Members
In recent decades, ideological self-sorting and the consolidation of power under leadership has made Congress look and act more like a parliament. Yet without the complementary institutions that make parliaments work, it’s a tenuous equilibrium at best. The national parties, to the extent they still exist, are largely lifestyle brands attached to fundraising funnels. Unlike in actual parliamentary democracies, lawmakers have no direct obligation to vote with their party. Votes must instead be whipped through horse-trading and indirect sanctions, such as the denial of powerful committee assignments or the withdrawal of support on re-election campaigns.
The nonprofit advocacy world helps grease the wheel of party cohesion by mobilizing activists, lobbyists, pollsters, and grassroots outreach whenever a big vote is afoot. These are what Matthew Yglesias refers to as “the groups.” While the number of such organizations may appear large and unruly, they typically derive core funding from a countable number of upstream foundations or philanthropists.
Funders are drawn from a similar social class on both the left and right, and are close enough to Dunbar’s number within any given area to enable interpersonal forms of coordination i.e. the sorts of communicative action governed by trust, reputation, and conformity to shared norms. Yet given the insulation of funders and advocates from electoral imperatives, there is nothing to prevent them from self-organizing around the sorts of self-defeating policy platforms that make pollsters like David Shor cringe. On the contrary: without the moderating forces of intraparty bargaining within a consolidated party superstructure, ideological clichés become the only viable Schelling point around which to organize collective action.
Endemic political alienation is then a predictable side effect of the United States’ disintermediated power structure. The bulk of voters have weak identification with either major party, and, beyond casting the periodic plebiscite, are largely cut out of democratic participation. While the old school patronage system had its ugly side, voters could at least expect that electing Joe Schmoe to Congress would get their community some money for a new post office or public park. This created programmatic linkages between democratic participation and policy outcomes, reinforcing faith in the system. I suspect the breakdown of those linkages, not just in the U.S. but in countries around the world, created the tinder for populism and “The Revolt of the Public”—writer Martin Gurri’s term for the rise of populism in the information age, given the power of the internet to simultaneously expose corruption and mobilize mass movements. In the end, we didn’t so much dismantle the old patronage system as create an all new one, only through institutions that are far more performative than formative.
The political economy of America’s nonprofit sector is typified by what the political scientist Theda Skocpol has called “associations without members.” Beginning in the 1960s, large foundations like Ford and Rockeller began to fund professional network organizations in law, civil rights, consumer rights, feminism, and environmentalism. Steadily, the model of foundation-funded, D.C.-based advocacy organizations came to be the dominant one on the center-left. Unlike unions, churches, and other mass membership organizations, such nonprofits only speak for their ostensible constituencies vicariously. Opinion polling and technocratic social science thus replaced the voices of ordinary people that mass membership organizations had once served to aggregate and orient towards collective action.
The right eventually followed a similar pattern. The conservative legal movement was originally spawned to counter the liberal legal network and broader “Rights Revolution,” helping to entrench the U.S. power structure around the internecine conflicts of lawyerly elites. The power of the judiciary in American society thus became a forum for advancing ideological projects and social movements. While the left embraced the interest group liberalism of the Great Society era, from civil rights and employment law to the consumer protections movement, the right oriented around the ideological motifs favored by their anti-communist funders.
As if anticipating Robert Conquest’s Second Law that “any organization not explicitly right-wing sooner or later becomes left-wing,” the original funder of the Federalist Society and the Law and Economics movement, the John M. Olin Foundation, was established in 1953 with a mandate to spend down all its assets within a generation of Mr. Olin’s death in order to prevent ideological drift. A similar ideological purity later manifested in the global network of free market think tanks created to promote economic liberalization at home and abroad.
As political scientist Steven Teles has noted, this “helped generate some of the characteristic features of contemporary elite polarization.” On the left, for instance, the unrooted nature of elite advocacy organizations encourages “an embrace of positions on social issues that are not widely supported by the actual people being advocated for.” On the right, meanwhile, “it encouraged an economic policy that was at odds with the actual preferences of conservative voters” in areas like entitlement reform, trade, and immigration—all areas where Republican policy elites historically leaned libertarian.
Advocacy organizations on both sides are trapped in something of a prisoner’s dilemma: even if progressive and conservative funders recognize that they’re burning hoards of money while making our politics less functional, the incentive to defect is too great, as unilateral disarmament would simply cede territory to the other side. Instead, funders on the left and right have, if anything, a deep envy for the other’s total embrace of strategic rationality: progressives are perennially trying to create their own version of the American Legislative Exchange Council, while conservatives pine for the institutional money of progressives so they can stop being so reliant on their own often stingy billionaires.
Despite a growing number of nonprofit organizations, the number of “social welfare organizations and beneficent societies” fell 39 and 62 percent respectively between 2003 and 2023. The archetypical nonprofit is now no longer a church or soup kitchen but rather a vague educational organization. I don’t think this is what de Tocqueville had in mind when he remarked upon the depth of American civil society.
The Anti-Social Impact of Nonprofits
Anecdotally, I suspect the spread of Potemkin civil society is the flip side of America’s overproduction of college-educated knowledge workers: if you’re unable to cut it at McKinsey, a nonprofit job is a good deal, providing lower but stable pay in exchange for social prestige. Of course, as a collective action problem, the advocacy arms race could easily be forestalled by amending nonprofit law or the U.S. tax code. But who would fund that white paper? The endogeneity of U.S. policymaking to organizations dependent on private philanthropy makes reforms aimed at reining in the sector nearly impossible to imagine. As a result, nonprofits and foundations remain deeply undertheorized compared to, say, corporate governance or public administration.
Ultimately, the size and scope of America’s nonprofit sector is powered by generous charitable deductions, an unusually progressive income tax, lax rules and oversight, the depth of U.S. capital markets which create windfalls that must be quickly dispersed to hit payout thresholds, and a large ecosystem of private foundations, trusts, and endowments. In 2016, 1.44% of U.S. GDP was donated to nonprofit organizations, more than any other country and nearly twice as much as New Zealand, the runner up. An incredible 38 of the 54 largest private foundations in the world by endowment value are based in the U.S., while Canada has only one. Simply put, the scale of U.S. private philanthropy is unlike anything in the world.
Separate from its ideological composition, the peculiar power of American philanthropy likely weakens U.S. state capacity, creating intrinsic barriers to the left’s vision of social democracy. Sweden and Norway, for example, have some of the lowest rates of nonprofit employment in Europe, rivaled only by former communist countries. Yet they also have some of the highest rates of social capital. The secret seems to be Scandinavia’s rich history of mutual aid, which culminated in universal, publicly administered social programs that crowded out the need for third-party providers, combined with sector-wide collective bargaining agreements that reduced the need for “advocacy without representation.” It’s a legacy that’s recently begun to reverse under what most leftist sociologists would recognize as the dreaded influence of neoliberalism.
In this light, the conflation of “the neoliberal turn” with Reaganomics is about two decades too late. Instead, the regime change that displaced member-led parties and the countervailing power of robust labor unions first started in the mid-1960s, when large foundations swelled on post-war growth and tax avoidance to fill the void. Collective bargaining and machine politics were summarily replaced with a technocratic “policy state.” And what’s a policy state without policy experts? Thus the modern advocate was born.
Needless to say, the results have been mixed. As Claire Dunning documented in her 2022 book Nonprofit Neighborhoods, the new elect made it their project to solve America’s social problems—hunger, crime, urban poverty, racial exclusion, and so on—through applied social science, administered via grants to a complex of nonprofit providers, evaluators, and technicians. A characteristic example was the “New Careers for the Poor” program that gave those dislocated by urban deindustrialization entry-level roles in the human services sector, including health, education, and welfare administration. Though embraced by Great Society policymakers as a path to upward mobility, it largely consigned the predominantly African American women hired through the program to low-pay dead-end jobs, reinforcing labor-market stratification by race, gender, and credentials.
Neoliberalism is associated with privatization. But delegating services to nonprofits is no less a form of privatization, particularly if they’re paid for by the tax-sheltered surplus value of long-dead capitalists. As Dunning argues, governments and foundations effectively “deputized nonprofits to help individuals in need, and in so doing avoided addressing the structural inequities that necessitated such action in the first place.”
This potted history of America’s nonprofit political economy is essential context for understanding the rise of Donald Trump. In 2016, Trump effectively gamed the broken primary system by mobilizing the nativist wing of the Republican base—a large but suppressed minority—but was subsequently beset by the incongruences between his agenda and the libertarian proclivities of the Beltway conservative movement. By his second term, conservative think tanks had largely reconstituted around a Trump-aligned counter-elite, including through new organizations such as American Moment and the America First Policy Institute.
As a first order of business, the second Trump administration set about deconstructing the left-wing NGO complex from branch to root. With the help of the Department of Government Efficiency (DOGE), large swaths of federal contracts were canceled, academic funding streams were choked off, and whole agencies were shuttered, from USAID to the Department of Education. These moves were less about policy than they were about institutionalized power—an effort to unwind the left’s structural entrenchment in the shadow of the Long Great Society.
Until Trump, it was hard to imagine the polarizing role of nonprofits and Big Philanthropy fading anytime soon. Rather suddenly, the role of the think tank and traditional advocacy organization is truly up in the air. Indeed, given the Trump administration’s embrace of unitary executive theory, consequential policy decisions are now more likely to be made by political appointees charged with translating the President’s agenda into action. Traditional vectors for influence within the regulatory communities that surround core federal agencies—aka “the deep state”—have thus been closed off.
Meanwhile, the maturation of Silicon Valley as a distinct power center in U.S. politics has led start-ups to supplant nonprofits as the social impact model of choice for young idealists. Venture capital funding, with its expectation that most startups will fail, has even begun to resemble a form of philanthropy with West Coast characteristics.
America, being a country of Protestant nonconformists without an established church, has always had an unusually zealous religious economy, with schisms and denominations galore. Rather than disappear with the decline of organized religion, those cultural impulses largely transmuted into the work of secular think tanks and social activist organizations. Even the contrast between old-money nonprofits and venture-backed startups can be recast in terms of the classic Protestant schism over whether to give primacy to charity or vocation. The devolution of U.S. politics into a jungle of warring activists, each claiming to be building the one true “movement,” is a reflection of that same low church Protestant ethic. It’s enough to make me miss those old Anglican ladies and their triangular sandwiches.