How should we fund the PSA?

funding
Author

Chris Chartier

Published

January 11, 2021

Patrick S. Forscher and Hans IJzerman

Note: This post accompanies three surveys, which are embedded as links in the post’s body. For convenience, you can find direct links to them here.

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In our previous post, we argued that the PSA has a grand vision and a budget that cannot easily support it. If the PSA is to fulfill its aspirations, the PSA must increase its funding so that it can support an administrative staff.

In this post, we will assume that the PSA wants to fulfill its grand vision. We will therefore explore ways that the PSA could create the funding streams that are necessary to achieve that vision. We will review four options: 

  1. Grant funding
  2. Charitable giving
  3. Fees-for-service
  4. Membership dues

Most of our energy to date has focused on grant funding and charitable giving. A sustainable funding model will require a mix of all the options so that we can balance their strengths and weaknesses. We can think of the PSA’s funding as a sort of investment portfolio where we devote a percentage of effort to each potential income stream based on the PSA’s financial strategy and risk tolerance.

In the remainder of this post, we will evaluate the strengths and weaknesses of all four funding streams. For each funding stream, we will also review the activities that we have already attempted and what else we can do in that category. 

The post is thorough and therefore long. Here are some big-picture takeaways:

We will argue that the PSA should pursue fees-for-service and membership dues, small-dollar grants, and charitable giving. Large-dollar grants should only be pursued in periods when the PSA can tolerate risky funding strategies. Finally, the PSA will need a bookkeeper and Chief Financial Officer to formalize its finances.

Grant-Writing

Grant-writing involves writing a specific proposal to a formal agency. The agency judges the proposal on its merits and its fit with the agency’s mission and, if the proposal is sufficiently meritorious, issues an award. This is the conventional way that scientists try to fund their work. 

We argue that grant writing is high effort, high risk, potentially high yield, but with high volatility. Grant-writing thus makes for bad planning long-term. 

Strengths

  • Grants can be very big. The big granting institutions have a lot of money. For example, one of the grants we wrote in the past three years was for €10 million. This dictum is not always true -- many grants are for amounts closer to €1,000 -- but when grants pay off big they pay off big.
  • Many scientists have grant-writing expertise. Because grants are the traditional means through which science is funded, grant-writing expertise is easy to find among the scientific community. This makes grant proposals easier to get off the ground than many other funding activities.

Weaknesses

  • Grants usually fund projects, not infrastructures. Funding an infrastructure like the PSA requires an ongoing investment, whereas projects complete within a few years. For this reason, granting agencies view projects as lower-risk funding priorities. Most grant mechanisms are therefore project-focused rather than infrastructure-focused.
  • Grant-writing is high risk. At the US National Institutes for Health, the US’s largest funder, the overall success rate for its most common grant is 23%. This means that, if the PSA relies exclusively on grant funding, we ought to expect 3 out of every 4 grant proposals to not yield any money. It is hard to build a staffing plan for an organization under such risky conditions.
  • Grant-writing is inefficient. Grant-writing requires so much time and energy with such a low probability of paying off that the expected return may not justify the expected time investment. One computational model suggests that these inefficiencies are inherent to any funding scheme structured as a competition between proposals because scientists waste as much or more effort on the proposals as they would gain from the science that the proposals fund.
  • The money is not flexible. The PSA wants to use its money for many things: grants to under-resourced labs, paying staff, funding competitions to make scientific discoveries, and many other things. Grants have strict accounting rules that rule out many or most of these activities.

What have we done already?

  • One proposal to the European Research Council’s Synergy mechanism. This proposal was project-based and very large (€10 million). Some of the money would have gone directly to the PSA, but making the PSA funding work within the constraints of ERC accounting rules was challenging. Writing this grant took years of preparation, including one month of very intense effort by five PSA members. The proposal was rejected.
  • Two proposals to the US National Science Foundation. Both were somewhat large (~$200K) and may have been able to support PSA staff. Both were rejected.
  • Two proposals to the John T Templeton Foundation. Both proposals are project-based and somewhat large (~$200K). One proposal was rejected and one is in limbo due to Covid-19.
  • Two proposals to the European Research Council’s Marie Curie mechanism. Both proposals were project-based and would have supported postdocs (~€120K). Although the postdocs would not have worked directly for the PSA, some of the proposed work would have indirectly benefited the PSA. Both proposals were rejected.
  • One proposal to Université Grenoble Alpes. This proposal was designed to fund grant-writing for both the PSA and UGA. This proposal was funded and has supported a postdoc at a cost of ~€120K. Although the postdoc officially works for UGA, around half their time is donated to the PSA.
  • One proposal to the Association for Psychological Science. This proposal was for $10,000 USD. All the money had to go toward participant recruitment for the PSACR project. This proposal was funded.
  • One proposal to Amazon. This proposal was small ($1,352 USD) and strictly dedicated to paying for server hosting for PSACR. This proposal was funded.
  • One proposal to the Society for Personality and Social Psychology. This proposal was small ($1,000 USD) and could only be used to support participant recruitment for PSA005. This proposal was funded.
  • One proposal to the Society for Improvement of Psychological Science. This proposal was small ($900 USD) and devoted to offsetting the costs of applying for nonprofit status. This proposal was funded. 

The above grants translate to around $12,862,252 in funds sought and $163,252 received. This demonstrates the risk and volatility in grant funding.

In addition to the above activities, PSA leadership has submitted a large number of letters of inquiry and less formal communications seeking funding opportunities. These did not reach the stage of formal proposals.

What else can we do?

The PSA has explored most of the available options related to grant funding. Thus far, it has had the most success writing small, focused grants. These can support specific activities, such as participant recruitment, but cannot easily support staff.

Summary

Grant-writing for large grants is a high-risk, high-reward activity. Grant-writing for small grants usually requires investment of resources, but also cannot easily fund PSA staff. Grant-writing is also the activity into which the PSA has spent most of its funding energy. The PSA may want to focus its grant-writing activities into smaller, project-focused grants.

Charitable giving

Charitable giving involves contacting individuals to solicit money and other resources. Charitable giving is similar to grant-writing in that some entity gives money to the PSA of their own free will. The method differs from grant-writing in that the giver lacks a structured organization that announces funding guidelines and priorities. 

We argue that charitable giving is moderate effort, low risk, low to medium yield, and medium volatility. Charitable giving allows for somewhat better planning long-term than does grant-writing.  

Strengths

  • Allows direct outreach to supportive members of the community. The PSA has generated a lot of support and goodwill. Direct outreach allows members of the community to express this goodwill in the form of direct financial support. 
  • Unconstrained by deadlines. Many other financial streams, such as grants, come on tight deadlines. Solicitations of charitable giving can happen at any time.
  • The money is (usually) flexible. Grant funding comes with strict accounting rules. Charitable giving sometimes comes with strings attached, but less often.

Weaknesses

  • Donation amounts are often small. The cost for staff salary runs in the tens of thousands of dollars. Most gifts run in the tens of dollars.
  • The overhead for these gifts is often large. This limitation is linked to the first. In contrast to grants, where a payment from a granting agency only needs to be processed once, in a donation drive, payments need to be processed as many times as you have donors. Sometimes these payment processes need to go through a third party, such as PayPal. This can create substantial overhead in both labor and finances.

What have we done already?

  • Set up a Patreon. At the time of writing, this Patreon collects €200 per month. We have used this money to help fund special projects, such as the PSA001 Secondary Analysis Challenge, data collection for PSA001, PSA006, and PSACR, and other miscellaneous expenses.
  • Funding drives. We have conducted at least four funding drives in the past three years. These are usually structured around funding a specific project or activity, such as PSACR, and are often announced via the PSA blog. However, we also conducted a funding drive during the first PSA conference, PSACON2020. It is difficult to estimate precisely how much money these drives have generated, but the sum is likely less than $1000.
  • Direct outreach. We have also done direct outreach to specific people who we have thought might be willing and able to donate to the PSA. Usually we have relied on personal networks for these direct solicitations. This process is smoother now that the PSA is an official nonprofit and can therefore accept direct tax-deductible donations.
  • Speaking fee donations. A few members of PSA leadership have donated fees they’ve received to speak about multi-site research. A typical speaking fee is around $200. This source of income generates money, but is hard to scale to the point where it would support full-time staff.
  • Received donations of research assistant time. Once special form of charitable giving is staffing time that is donated from an organization to the PSA. This system allowed the CO-RE Lab, for example, to donate the time of one of its interns to the PSA. This donation enabled, among other things, the creation of the first Study Capacity Report. This system works best when the research assistant or intern can be directly embedded within a PSA supervisory structure.

What else can we do?

The PSA’s new status as a pending nonprofit gives it more options that fit under charitable giving. The option to accept donated time from research assistants is especially attractive -- especially if the donation can be formalized in an official agreement between the PSA and the donating organization. 

The PSA can also do more direct outreach to members, both through the PSA mailing list and at the time of registration with the member website (an option that bears some similarities to “membership fees”, discussed below).

Summary

Charitable giving is highly flexible and has generated some money for the PSA, though often the specific monetary amounts are small. One attractive option for the PSA now that it is a nonprofit is to accept more donations of time from member lab research assistants. This option works best when the agreement is formalized through an official agreement and when the research assistant can be embedded within a PSA supervisory structure.

Fees-for-service

A fee-for-service venture involves directly selling something, rather as a for-profit company would. Some of the proceeds from sales go toward maintaining the fee-for-service venture; the rest go toward supporting other activities within the organization.

One particularly interesting service the PSA can provide is translation. The PSA has extensive experience translating psychological tasks and measures into multiple languages. Moreover, the PSA has experience implementing the translations in software. Finally, if the PSA can help researchers recruit participants from more countries and cultures, that furthers its mission of ensuring that psychological science is more representative of humanity writ large. We will have more to say on this subject below.

Fees-for-service ventures are difficult to classify in terms of their effort, risk, yield, and volatility; much depends on the specific venture under consideration. Nevertheless, we believe they are underexplored and could usefully complement the PSA’s other efforts.

Strengths

  • Can leverage already-existing strengths of the organization. If an organization must already be skilled at a specific task, developing a business around that skill allows the organization to leverage its existing strengths to generate a sustainable income. For example, the PSA must accomplish many things to conduct a multi-site study, including develop a large, global community of scientists and researchers around a common mission, coordinate agreements across many institutions, develop materials that are appropriate across many cultures, translate those materials into many languages, create and maintain large databases about its members, and disseminate knowledge about multi-site studies. Many of these skills can be leveraged into an income-generating enterprise. 
  • Builds a sustainable income stream. Once established, a fee-for-service income stream can sustain itself over long periods of time, buffering against the risks associated with other income streams (for example, a grant running out after three years).
  • The money is flexible. Because the money that comes from a fee-for-service venture is earned rather than donated by a third party, there is no donor who can attach strings to how the money is used. Thus, this money is very flexible and can be used to support staff salaries and any other activities the PSA desires.

Weaknesses

  • Startup risks. Startups require up-front investments and there is no guarantee that a market will materialize. Thus, any investment made into a fee-for-service venture may, in the worst case, be lost.
  • Mission capture. On the other hand, if a fee-for-service venture is very successful, that venture may capture the mission of the non-profit as a whole. Thus, fee-for-service ventures work best when they are well in line with the primary aims of the non-profit.
  • Conflicts of interest. Some fees-for-service ventures may create conflicts of interest for PSA members who work on them, as these ventures may create incentives that conflict with the PSA’s core mission.

What have we done already?

  • A PSA conference. This year, the PSA hosted its first conference, PSACON2020. The PSA charged a $60 registration fee with a generous waiver policy -- the conference was planned on the assumption that ⅔ of the participants would receive waivers. The conference had 62 paying attendees (plus many more who received waivers) and brought in $3,720. This money went towards supporting the salary of the PSA’s junior administrator (and the main organizer of the conference), Savannah Lewis.

What else can we do?

Fees-for-service are a largely untapped opportunity for the PSA. Conducting multi-site studies is difficult and the PSA has developed a broad array of institutional knowledge to complete these studies. Much of this institutional knowledge can be leveraged into marketable services.

The success of PSACON2020 suggests that we could continue this conference in the future. If attendance remains stable or grows, this could become a small but consistent funding stream for the PSA.

A second interesting option is starting a dedicated PSA journal. This option entails some risk, as projects published there cannot be published in journals that are currently very prestigious (such as Nature Human Behaviour); authors on projects therefore take on some personal risk in the decision to instead publish at the PSA journal. It is also unclear whether university libraries would be willing to pay subscription fees for a PSA journal. On the other hand, the success of society journals suggests that once this revenue source is established, it could be a large and reliable one.

One last interesting option is translation. Translation of psychological measures and tasks is difficult, yet the PSA has lots of experience pulling off this task. PSA member Adeyemi Adetula has proposed a PSA-affiliated translation service with a first focus on Africa. This blog contains two surveys, one for people interested in being paid translators and one for people who want measures and tasks translated. If you are interested in this idea as a means of funding the PSA, head over to the blog, read the proposal, and complete one or both of the surveys.

Summary

Fees-for-service involves leveraging the PSA’s strengths to sell a service, generating a new income stream. The PSA has started some limited versions of fee-for-service funding, but this is still a largely untapped opportunity. 

In addition to continuing the success of PSACON, the PSA could explore starting a service to provide translations of psychological tasks and measures. Both these activities are in line with the PSA’s core mission -- the conference because it builds community and supports members, translation because it provides the translated measures and tasks necessary to recruit participants whose native language is not English.

Membership dues

Membership dues are a special case of fee-for-service funding, but the model fits the structure of the PSA so well that it is worth discussing in its own section. The membership dues model involves charging some amount of money to gain access to some or all of the benefits of PSA membership. This is the model followed by scientific societies, which often gate grant funding and conference participation in exchange for annual dues of, say, $247 (APA) or $237 (APS).

Membership dues also have some overlap with some forms of charitable giving. This is because one way to ask for a donation is at the time of registration through the PSA member website. The major difference between this sort of solicitation and a membership fee is whether the default membership is free or paid. Membership dues do have one major, somewhat hidden, advantage over a solicitation at the time of member registration: due to grant accounting rules, many PSA members who have their own grants cannot spend this money on donations. On the other hand, grant money can typically be spent on a membership fee. Instituting membership dues may therefore unlock grant money that is currently inaccessible to the PSA.

Some implementations of membership dues may conflict with a core value of the PSA, namely diversity and inclusion. If dues are required of all members, they risk pushing out prospective PSA members with less resources. There may be implementations of membership dues (such as a dues structure that allows for fee waivers) that can help mitigate this risk. 

We believe that membership dues are low effort, moderate risk, medium yield, and low volatility. They therefore allow for better long-term planning than many other funding streams. However, we also believe that the specific kinds of risks that membership dues incur require feedback from PSA members before we rush into any decisions. We have created a survey to help seek this feedback; we lay out more context for why we see such promise in dues below.

Strengths

  • Many people have pots of money that cannot be given as gifts. Under the Grant-writing section, we noted that grant funds are inflexible. One consequence of this lack of flexibility is that PSA boosters who have grant funds are often not allowed to use them in charitable gifts because the expense cannot be justified to the granting agency. Membership dues provide a way for these people to justify giving money to the PSA to granting agencies, thus unlocking a resource for the PSA that would otherwise go untapped.
  • Leverages the PSA’s best resource, its community. The great strength of the PSA is that it has created a large international community (1400 members and counting) that believes in its mission. Membership dues allow the PSA to leverage this strength to better secure its long-term sustainability.
  • Dues are linked to PSA member benefits. The PSA provides many benefits to members, including a connection with a large international community of colleagues and collaborators, exposure to cutting edge methods, and access to high-impact that can be added to one’s CV. Membership dues would emphasize that the PSA is only able to provide these things by maintaining a large infrastructure.
  • Precedent in scientific societies. The dues funding model is the same one used by scientific societies, so dues-granted membership should be a concept that is familiar to PSA members.
  • Wide variety of potential implementations. Dues can be charged on a yearly basis or could be tied to joining a study (the cost of joining would be an administrative fee). The PSA could also consider a variety of waiver policies.
  • The money is flexible. The money is earned, so it could go toward supporting everything from staff salaries to ad hoc projects.
  • Builds a stable income stream. Once a membership dues program is in place, the income stream from the program should be relatively stable year-to-year.

Weaknesses

  • Risk of lowering membership. Gating membership by adding a joining fee could lower PSA membership, draining the PSA of its most valuable resource. Some policies could help manage this risk -- for example, the membership dues could be suggested rather than required.
  • Risk of driving away members with fewer resources. The PSA has a particular interest in increasing its membership in countries that provide less support for the sciences, such as those in the African continent. Imposing membership dues could put joining the PSA out of reach for these prospective members. Once again, policy could help manage this risk -- for example, the PSA could provide generous waivers, just as it did for PSACON.

What have we done already?

Nothing.

What else can we do?

Membership dues come with some real risks, so we want to carefully investigate this option before we take any hasty action. We also want to ensure that whatever action we take has the broad support of the PSA membership. 

We have prepared a survey to investigate what PSA members think about different models of membership dues. By taking this survey you can help us evaluate the feasibility of using this as an income stream to promote the sustainability of the PSA.

Summary

Membership dues is arguably the funding model that best fits the structure of the PSA. However, some implementations of dues may conflict with the PSA value of diversity and inclusion. Membership dues have great potential as a funding stream, but we should think carefully about whether and how to implement them.

Conclusion

We strongly believe that the PSA has the potential to do enormous good for psychological science, and perhaps the social sciences at large. However, fulfilling this potential will require dedicated funding, and to obtain this funding the PSA may have to look beyond its current focus on grant-writing and charitable giving. Of course, the PSA need not abandon these income streams; it can simply balance these activities with efforts in developing funding streams through, say, fees-for-service ventures and membership dues.

If the PSA does develop a more balanced financial strategy, it will need staff to manage this strategy. This probably means appointing a Chief Financial Officer and a bookkeeper. The Center for Open Science, for example, has staff to manage its financial strategy and its books.

The PSA is at a crossroads. We think it has a real opportunity to grow into a more formal and mature organization that carries the big team science torch for psychology at large.