The Heartland Institute celebrates its twentieth anniversary at our benefit dinner in Chicago on September 23. (See pages 6 and 7 for details.) It’s a remarkable milestone for an organization that started with practically no money, devoted to promoting some very unpopular ideas.
It’ll Never Work!
Scott Hodge first pitched his idea of creating a free-market think tank in Chicago at a meeting of the “Loop Libertarian League,” a monthly dinner and discussion group hosted by David Padden at Chicago’s Union League Club. Diane and I were there as guests of Robert Jackson.
Hodge reported he had visited with Bob Poole, founder of the Reason Foundation, and was convinced the time was right for a new kind of research and advocacy organization: a state-based public policy think tank. He persuaded Padden to give him the floor to pitch the idea to the group.
At one point during the ensuing discussion, I said in so many words, “it’ll never work!” Diane and I had recently launched Nomos Press, a nonprofit organization devoted to publishing a quarterly libertarian magazine. We had been singularly unsuccessful in raising money for it and said the new venture would probably fail as well. Privately, we didn’t want to compete with the new venture for a limited pool of funds.
Hodge’s Loss, My Gain
Despite my cynicism, Padden took up the cause. He called 20 of his members to see if he could get a dozen of them to pledge $100 a month, and they did. (The monthly pledge model implicitly recognized the slim odds of success for the new organization.) Jim Johnston, an economist at Amoco at the time and already a long-time libertarian activist, made a $5,000 contribution. For a long time, it stood as our largest single gift.
Hodge faced a dilemma. His girlfriend was leaving town to attend college in Minneapolis. Should Scott follow her and continue his own college education there, or stay in Chicago to launch a new think tank? He chose love over career and left. (A couple years later both Scott and his girlfriend returned to Chicago and worked at Heartland. Scott left to join The Heritage Foundation; he is now president of the Tax Foundation.) Padden called me to see if I was interested in running the very organization I had criticized. I jumped at the chance.
I was attending the University of Chicago part time, working as a janitor full time, and editing and publishing Nomos during evenings and on weekends. Any job that didn’t involve mopping floors looked like a good career move to me. I insisted, though, that I not be paid less than what I was making as a janitor. Padden hired me despite my inexperience and obvious lack of negotiating skills.
There at the Beginning
Attorney Mark Ferdinand helped write the new organization’s bylaws, got us incorporated, won our tax-exempt status, and offered us free (and later subsidized) office space at Ferdinand & Shapiro. Mark also hired Diane as a legal secretary. She quickly became Heartland’s most dedicated volunteer, switching from doing legal work to Heartland work at the end of each day (and, it can now be admitted, sometimes a little earlier).
Patrick Peterson became Heartland’s development director, a position he held until 1993. Pat was everything I was not: Tall, extroverted, and a natural salesman. We made a great team, and it’s no exaggeration to say the organization would not have survived without him. I’m ashamed, in retrospect, by how little Pat was paid given how tirelessly he worked for Heartland. Pat now lives in California with his wife Mary and son Andrew.
We eventually outgrew Ferdinand & Shapiro’s extra offices and moved across the street to far less prestigious space at 59 East Van Buren, and then to 634 South Wabash, a building so decrepit we had to knock on the door some mornings to have the homeless person who lived in the staircase unlock the door to let us in. We moved to suburban Palatine for four years, then returned to downtown Chicago, and to our current offices, in 1998.
The McDonald’s of Think Tanks
Our origins may have been humble, but we had big dreams from the start. In 1987 we opened an office in Milwaukee, followed by offices in Detroit (1990) and Cleveland, St. Louis, and Kansas City (1991). My goal was to become “the McDonald’s of the think tank world” with franchises in every state.
The effort produced many successes, thanks to the vision and generosity of donors such as Franklin Buchta in Milwaukee, Bernie Baltic in Cleveland, and Dick Larry at the Sarah Scaife Foundation. For several years we were seemingly unstoppable, hosting several events each week, releasing policy studies once a month or more, and putting our authors in front of Rotary Clubs and Chambers of Commerce and on radio and television shows throughout the Midwest.
The franchise model had much to recommend it, but it suffered from three things: Lack of capital meant a few bad fundraising months could close down an office; foundations didn’t like the model’s lack of academic shine and so didn’t respond to our funding appeals; and free-standing state-based think tanks, many of them modeled after The Heartland Institute, were starting to compete with our offices for funding.
Of course, the plan also suffered from having a twenty-something president who spent too little time fundraising. I often ponder whether, with the right leadership and a few more donors, that business model would have worked, or even if I could make it work today.
A Public Policy Revolution
In 1993 we gave up on the franchise model. Guided by people like Jay and Ethelmae Humphreys, we used Total Quality Management to virtually reinvent the organization. The goal, expressed in the title of a planning memo I wrote at the time, was “to cause a public policy revolution.” The plan was to “transform The Heartland Institute into a customer-driven clearinghouse for free-market research.”
We decided to treat the nation’s 7,500 state legislators as customers to be served and satisfied, not opponents to be criticized or lectured to. We would produce publications engineered to meet their needs, rather than the policy studies and books that come naturally to academics and their enablers in think tanks.
Through focus group meetings we learned newspapers were the primary sources of information for state legislators. So we cut back on the number of policy studies and books we produced and started publishing monthly public policy newspapers instead. The fourth newspaper, Budget & Tax News, was started just last year.
The result was tremendous. Elected officials love the newspapers. According to our latest national survey of randomly selected state legislators, three out of four (76 percent) read at least one of our newspapers “always” or “sometimes,” and more than half (57 percent) say one of our newspapers influenced their opinion or led to a change in public policy. Nearly half (45 percent) regard us a “valuable resource or aid.”
What’s Next?
My friend Lee Walker often says, “Joe Bast is (or Joe and Diane Bast are) The Heartland Institute.” What he means is that if I (or Diane and I) ever left Heartland, the organization would cease to operate. Others have said and thought the same thing. Honestly, that may be the case today, but I am working hard to make sure it is not the case in a year or two.
Heartland is too big and too important for one or two people to be intimately involved in all the products it creates and all the decisions that need to be made. We have people on staff with the talent and experience to take Heartland to the next level.
So long as there are Democrats and Republicans, there will be work for someone like me. But if Heartland is still doing in 10 years what it is doing today, it will mean I stuck around too long.
