American Enterprise Institute Budget Surges to $10 Million - Think Tank Infrastructure Expansion

By 1977, the American Enterprise Institute’s budget had surged to approximately $10 million, representing more than a 12-fold increase from its 1970 budget of $800,000. This dramatic expansion transformed AEI from a modest research organization into a major policy influence machine, demonstrating the massive corporate investment in conservative intellectual infrastructure following the Powell Memo.

The growth was fueled primarily by the Howard Pew Freedom Trust and the newly rejuvenated John M. Olin Foundation, whose staff had been influenced by neoconservative thinking. By 1980, AEI would grow to a budget of $8 million with a staff of 125, up from just $1 million and 10 staff members at the start of the decade.

In 1977, former President Gerald Ford joined AEI as a “distinguished fellow,” bringing several of his administration officials with him including Robert Bork, Arthur Burns, and David Gergen. This revolving door between government and think tanks established a pattern where former officials could continue shaping policy from supposedly independent research institutions while maintaining corporate funding.

The expansion of AEI paralleled similar growth at Heritage Foundation and other Powell Memo institutions, creating a coordinated network of think tanks that could generate policy proposals, provide expert testimony, and offer intellectual legitimacy to corporate political priorities. Reagan would later cite AEI in 1988, saying “No think tank has been more influential than the American Enterprise Institute.”

This budget expansion demonstrated how corporate money was systematically building parallel policy infrastructure outside democratic accountability, creating what would become a sophisticated policy laundering operation where corporate interests could be repackaged as scholarly research and independent expertise.