AMERICAN ENTERPRISE INSTITUTE Freedom. Opportunity. Enterprise.

2014 Annual Report The American Enterprise Institute is a community of scholars and supporters committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise. AEI pursues these unchanging ideals through independent thinking, open debate, reasoned argument, and the highest standards of fact-based research. Without regard for politics or prevailing fashion, we dedicate our work to a more prosperous, safer, and more democratic nation and world.

Located in Washington, DC, AEI is one of America’s oldest and most influential think tanks. Our more than 60 full-time scholars are leaders in their fields. Through their research and writings, public events, and government testimony, they stress empiricism over opinion, fact over folly, and reason over rhetoric. AEI is a 501(c)(3) nonprofit organization and is supported by donations from individuals, foundations, and corporations. For more information about AEI, visit our website, www.aei.org. Message from the Chairman and President

President Arthur C. Brooks and Chairman Tully M. Friedman

AEI exists to defend and strengthen freedom, individ- Chen Guangcheng, and Microsoft founder Bill Gates ual opportunity, and free enterprise—not because are helping AEI build a broad coalition of supporters these ideals are ends in themselves, but because who recognize that free enterprise and human liberty they help us all to live productive and happy lives. are moral imperatives. We have many more exciting Indeed, these ideals—secured by America’s global partnerships planned for the year ahead. leadership—are America’s gift to the world. As AEI reaches more people around the globe, Within AEI’s own community of scholars, staff, we are also deepening our ties to our core commun- and supporters, we find the power of those ideals ity. With the help of our Government Relations and at work. Consider Thanh Nguyen, a 16-year veteran Communications teams, AEI scholars continue to employee of AEI who fled Vietnam’s communist rule in lead the Washington policy community in terms of 1979 and found safe harbor in the United States. As a congressional testimonies and op-ed publication in the production coordinator at AEI, Thanh put his three nation’s most prominent newspapers. In tandem, our children through college, never missing a day of work. Campus Programs staff is engaging college students— Now recently retired, he anticipates spending more our future leaders—through programming on campus- time with his children—all professionals in Northern es nationwide and at our Washington headquarters. Virginia—and five grandchildren and fishing from his On that note, our trustees’ and donors’ remarkable boat in the Chesapeake Bay. Thanh earned his success, support for AEI’s Campaign for Free Enterprise and and we are proud to have been a part of it. American Progress has allowed AEI to secure a new Thanh’s story and millions just like it underscore headquarters in Washington, DC, which we are the importance of AEI’s work. Across the Institute’s honored to name the Daniel A. D’Aniello Building. research areas, our staff and scholars dedicate their Upon moving to this renovated historic building in time and talents to a mission that is positive, non- late 2015, AEI will have a physical infrastructure— partisan, and people-focused: fighting to help people including a modern events space, classrooms, and like Thanh enjoy the blessings of liberty, individual state-of-the-art radio and TV studios—that powerfully opportunity, and free enterprise. enhances our ideas-driven work. AEI is pursuing that mission more vigorously As we launch new initiatives, host world- than ever before. In early 2014, AEI launched our renowned leaders, and prepare to move to our Program on Human Flourishing, a major, multiyear magnificent new facility, the “deep magic” of AEI— initiative that combines work on poverty, economic independent, empirical, and courageous scholarship— mobility, and human liberty with major events and is stronger than ever. There is a reason why: your outreach to nontraditional constituencies. moral, financial, and intellectual support has Kicking off the program in February, His Holiness positioned AEI as the nation’s leading force for the Dalai Lama headlined a major public symposium individual opportunity and human liberty. Thank at AEI on the intersection of free enterprise and human you for joining us in our fight for people who flourishing. This collaboration garnered international deserve the chance to earn their success. attention for AEI’s mission and work. Similar collaborations from figures like Indian Tully M. Friedman Arthur C. Brooks spiritual guru Sri Sri Ravi Shankar, Chinese dissident Chairman President

Message 1 The Year in Review AEI’S IMPACT IN 2014

JANUARY FEBRUARY Senator Marco Rubio (R-FL) delivers Senators Lamar Alexander (R-TN) and Tim Scott (R-SC) Leon Aron pens op-eds for the Washington remarks at an AEI event on Capitol Hill headline an AEI event on January 28, at which they release a Post and —as well as an AEI marking the 50th anniversary of the War joint proposal to convert federal education funding into education research paper—and appears on C-SPAN’s on Poverty. During the speech, the senator scholarships for low-income students. The event takes place during Washington Journal in the run-up to the unveils a proposal that would shift greater National School Choice Week, during which AEI research fellow Winter Olympics in Sochi, which he control of federal antipoverty programs to Michael McShane hosts a major conference examining how describes as “an intensely personal— the states. Rubio tells reporters that AEI school choice can stimulate the creation of new, high-quality schools. and extremely expensive—endeavor is the “primary organization” he turns to for Russian President Vladimir Putin.” for policy advice. On the day of President Obama’s State of the Union address, former presidential speechwriter Marc Thiessen offers a behind- the-scenes look at the speechwriting process during a special AEI event. Speechwriters from the Reagan, Clinton, and Obama administrations participate.

2 AEI Annual Report His Holiness the Dalai Lama visits AEI for a two-day symposium Daniel A. D’Aniello, vice chairman of AEI’s Ahead of President Obama’s fiscal year on the intersection of free enterprise and human flourishing. During Board of Trustees, pledges $20 million to 2015 budget submission, the Marilyn his stay, the Buddhist spiritual leader meets with college students AEI in support of its mission to promote Ware Center for Security Studies hosts and participates in a public conference with psychologist Jonathan individual liberty, equal opportunity, and Acting Deputy Secretary of Defense Haidt, economist Glenn Hubbard, and hedge fund manager Dan free enterprise. His gift will help AEI move Christine Fox for a discussion of US Loeb. News outlets including , , the to its new headquarters near Dupont Circle defense budgetary priorities in 2015 Wall Street Journal, and Vanity Fair profile the event. in Washington, DC. AEI’s new space will be and beyond. In an interview with named the Daniel A. D’Aniello Building. Mackenzie Eaglen, Fox addresses the consequences of diminished defense Robert Doar testifies before the Senate resources amid rising global instability. Budget Committee and offers recommen- dations to transition more Americans from welfare to the workforce. That same week, he publishes an op-ed in highlighting the success of programs that help at-risk men develop work skills and secure steady employment.

Year in Review 3 MARCH AEI scholars Danielle Pletka, Leon Aron, Four years after the Affordable Care Act (ACA) was signed into AEI hosts a conference on territorial and Gary Schmitt host a conference call law, Karlyn Bowman and Jennifer Marsico release an extensive taxation and the repatriation of foreign for journalists and Hill staff following polling report on health care. While their analysis reveals sustained profits, at which Jason Furman, chair- Russia’s annexation of Crimea. Pletka opposition to the ACA (just 2 in 10 Americans believe the law will man of President Obama’s Council of appears on CBS’s Face the Nation to make their situation better), it also finds that Americans trust Economic Advisers, delivers the keynote discuss the crisis, and Aron pens op-eds Democrats more than they trust Republicans to handle health care. address. Later that week, Alan Viard for Foreign Policy, CNN.com, and POLITICO Later that week, Scott Gottlieb publishes a Forbes piece (garnering releases a coauthored report that outlines that shed light on Russian President more than 260 comments online) documenting the rise in options for reforming the corporate tax Vladimir Putin’s motives. health insurance premium costs among young adults. system, with a particular focus on foreign income allocation.

APRIL Charles Murray and Ayaan Hirsi Ali are During the daily White House press briefing, Mark Perry’s Kevin Hassett, Stan Veuger, Martin disinvited from speaking engagements research on the gender wage gap in the Obama administration Feldstein, James Pethokoukis, Jonah at Azusa Pacific University and Brandeis is cited by reporters from , USA Today, Goldberg, and others respond to Thomas University, respectively. Both publish the Wall Street Journal, and . CNN, CBS News, and Piketty’s bestselling book, Capital in the op-eds in the Wall Street Journal condemn- multiple talk radio outlets reference Perry’s research after the Twenty-First Century, arguing that the ing ideological intolerance and draw press briefing. Perry and Andrew Biggs also publish a major French economist’s analysis overlooks widespread attention to the absence of Wall Street Journal op-ed disproving the administration’s claim the growing role of the entitlement state diverse opinions on college campuses. that a significant gender wage gap persists in today’s economy. in offsetting income inequality. Speaking at a conference alongside Piketty, Hassett explains how “capitalism has unambigu- ously reduced global inequality.”

4 AEI Annual Report MAY economics profes- Lynne Cheney releases her latest book, Senator Rob Portman (R-OH) delivers remarks at AEI on sor and Nobel laureate Eugene Fama James Madison: A Life Reconsidered. conservative solutions to eliminate domestic poverty. The follow- receives the Award at AEI’s Her husband, AEI trustee and former ing week, Nicholas Eberstadt convenes a panel of domestic Annual Dinner. Fama, who sits on AEI’s Vice President Dick Cheney, interviews policy scholars to consider the successes and failures of the modern Council of Academic Advisers, is inter- her at an AEI event in front of several welfare state in conjunction with the release of his new essay, viewed by Wall Street Journal editorial media crews and hundreds of attendees. The Great Society at Fifty. page editor Paul Gigot about his theory The book quickly appears on the New of asset pricing. York Times national bestseller list.

JUNE Sadanand Dhume, a columnist for Wall AEI hosts a major conference with leading policymakers and Islamic State of Iraq and Syria (ISIS) Street Journal Asia, offers timely analysis intellectuals who comment on the conservative domestic policy militants topple Mosul and Tikrit, declaring on India’s May parliamentary election and agenda outlined in the YG Network’s new publication, Room to the creation of a caliphate. AEI hosts a the rise of incoming Prime Minister Grow. Of the 13 essays in that publication, 7 are authored by AEI public discussion with Senator John Narendra Modi, a leading figure in the scholars. Conference participants include Senate Minority Leader McCain (R-AZ) and General Jack Keane conservative wing of India’s right-leaning Mitch McConnell (R-KY), then-House Majority Leader (ret.) on the deteriorating security Bharatiya Janata Party. Dhume also Eric Cantor (R-VA), Editor , and conditions in Iraq. , Paul appears on a variety of radio programs— New York Times columnist Ross Douthat. Fox News, CNN, NBC, Wolfowitz, Fred Kagan, and others weigh including NPR’s Weekend Edition—to and the Washington Post, among other outlets, cover the event. in on the crisis in Iraq through dozens of comment on India’s economic and political television interviews and op-eds that call trajectory in the years ahead. for decisive action from the White House.

Year in Review 5 JULY Christina Hoff Sommers’s new video Danielle Pletka appears on CBS’s Face the Nation to discuss the Arthur Brooks, who became a contribut- series, the “Factual Feminist,” draws Israel-Hamas crisis, remarking that Hamas is using attacks on Israel ing opinion writer for the New York Times more than 400,000 views in the first to regain its popularity, up its stock in the region, and, more impor- in March, describes the relationship three months since launching. Sommers tantly, do the bidding of Iran. Pletka also takes to AEI’s blog and between human desire, materialism, also appears on PBS NewsHour, CNN, appears in an AEI “Top Three” video on the crisis, which has been and happiness in his July 20 essay, and Fox Business Network to discuss viewed more than 23,000 times on YouTube. “Love People, Not Pleasure.” The essay contemporary feminism and the young is the most emailed and tweeted New men’s education achievement gap. York Times piece on the day of and day after its publication.

AUGUST SEPTEMBER Congressman Paul Ryan (R-WI) unveils Frederick M. Hess and Michael Q. McShane’s edited volume, AEI’s Values & Capitalism program his new antipoverty proposal before a Teacher Quality 2.0: Toward a New Era in Education Reform welcomes 249 evangelical writers, pastors, capacity crowd at AEI headquarters. His (Harvard Education Press) is released and its ideas discussed college students, think tank professionals, plan to reform public assistance programs during an engaging AEI Google Hangout discussion. Commenters and business leaders to AEI for series of for low-income Americans encourages state discuss the intersection of teacher-quality policy and innovation discussions on how Christians can seek the and local policy innovation and calls for and explore roadblocks and possibilities. August also marks the flourishing of their cities and communities. rigorous program evaluations. Following expansion of AEI’s Education team, with Kevin James joining Twenty-nine keynote speakers, panelists, Ryan’s speech, a panel of poverty and as a research fellow in the Center on Higher Education reform. and moderators cover topics including economic mobility experts (moderated by Katharine Stevens becomes the Institute's first research fellow the meaning of social justice, redemptive AEI’s Robert Doar) offer their analysis of in early childhood education one month later, joining the team in uses of power, and the pursuit of true and his proposal. mid-September. lasting happiness.

6 AEI Annual Report Former Vice President Richard B. Cheney delivers remarks at Speaker John Boehner (R-OH) delivers his AEI’s Director of Russian Studies Leon AEI on what the United States must do to defeat ISIS and restore five-point policy vision to reset America’s Aron hosts Mikhail Khodorkovsky at US power around the globe. The following day at AEI, House economy at AEI. He discusses how the AEI for a private lunch that includes Armed Services Committee Chairman Buck McKeon lays out emerging energy boom in the United States Russia experts, academics, journalists, the specifics of his own strategy for combatting ISIS. AEI scholars offers a once-in-a-generation opportunity for and representatives from Capitol Hill. take a prominent role in the news cycle, offering commentary and our country to reset its economic foundation The event is Khodorkovsky’s first private insight on the growing threat from ISIS. by addressing the debt, reforming the tax luncheon on his first “official” visit to DC code, fixing the legal system, reining in since his release from a Russian jail in excessive regulations, and strengthening the December 2013. country’s education system to empower Americans and renew our country’s future.

OCTOBER NOVEMBER Louisiana Governor Bobby Jindal visits Arthur Brooks speaks to more than 200 US Ambassador to the United Nations (UN) Samantha Power AEI to present his plan to rebuild America’s members of the Doe Fund’s work reentry speaks to a packed room at AEI on UN peacekeeping and the military strength and reaffirm the United program, Ready, Willing, & Able. The critical role the United States has to play in ensuring that peace- States as a force for freedom and stability program provides work, training, and hous- keeping can meet the demands of 21st-century conflicts. around the world. ing to individuals seeking to break cycles of homelessness, substance abuse, and Jim Talent joins AEI as a senior fellow and the director of the Acumen Founder and CEO Jacqueline incarceration. Brooks shares his thoughts Marilyn Ware Center for Security Studies' National Security 2020 Novogratz visits AEI to discuss harnessing on happiness, earned success, and the Project. He joins a team of AEI defense experts working on the the power of markets to fight global poverty. privilege of giving back and has the formulation and promulgation of a new paradigm for defense The event is broadcast live on C-SPAN, opportunity to speak to program partici- policy, planning, and budgeting. and half of all in-person attendees are new pants one-on-one following the lecture. to AEI.

Year in Review 7 AEI RESEARCH The Intellectual Framework for a Better Future

New Research Centers Address Emerging Policy Challenges

AEI’s more than 60 resident scholars and fellows are leaders in the policy community, offering research and analysis on a full range of issues, including economics, education, energy and environmental policy, foreign and defense policy, health policy, politics and public opinion, and society and culture. Over the past two years, AEI has launched a number of research centers to identify and address ongoing threats and unforeseen challenges in the domestic, foreign, and defense policy arenas. These centers are helping AEI deepen our research focus on select issues, positioning the Institute to define the terms of debate in Washington.

CHALLENGE A New Frontier in Modern Warfare

Although cyberwarfare lacks a physical battleground, the threats to America’s military and intelligence assets, public infrastructure, and intellectual property are tangible and significant. This new frontier in modern warfare raises an array of complicated issues encom- passing privacy, federal trade law, and defense policy.

RESPONSE CICT hosted a major event on the future of cybersecurity, convening retired AEI’s Center for Internet, Communications, Generals Michael Hayden and Keith Alexander, House Intelligence Committee Chairman Mike Rogers, FTC Commissioner Maureen Ohlhausen, and FCC and Technology Policy Chairman Tom Wheeler, June 12, 2014.

Directed by Jeffrey Eisenach, AEI’s Center for Internet, Communications, and Technology Policy is filling a • Is the federal government obligated to notable void in the policy community by providing defend American corporate interests from analysis and research on a range of often-neglected foreign cyberattacks? Might corporations issues—including spectrum and broadband regulation, have to repay the government for such intellectual property rights, and cybersecurity. Visiting services? scholar Shane Tews is leading a new initiative to develop and advance a comprehensive policy agenda • Should American corporations report that answers emerging cybersecurity questions, such as cyberattacks to authorities, even if that exposes their internal operations to scrutiny • Can American corporations work in tandem from other federal agencies? to prevent cyberattacks, or does this kind of cooperation represent a form of collusion?

8 AEI Annual Report “You know, this institute has been at the center of the debate about American

foreign policy for decades, and the work AEI Anticipates Outgrowth of Terrorism on your scholars produce on a daily basis has Arabian Peninsula

been a great help to me throughout my AEI excels at anticipating shifts in the policy three years in the United States Senate.” landscape and expanding our work to meet new challenges. There is no better example of our —Marco Rubio at AEI, November 2013 anticipatory work than AEI’s Critical Threats Project, led by . The Critical Threats Project identified Yemen as a new battle- ground in the War on Terror and expanded its CHALLENGE research on the nation in fall 2009—a decision Amid Spreading Global Unrest, Isolationist that proved insightful. Research fellow Katherine Sentiment Builds at Home Zimmerman briefed members of Congress, military leaders, and law enforcement about the A growing chorus of isolationist policymakers is threat in winter 2009, after the Yemeni terrorist calling for America to continue its retreat from organization al Qaeda in the Arabian Peninsula the global stage—despite a deteriorating global (AQAP) plotted to destroy a Northwest Airlines security environment. jet over Detroit. AEI’s extensive analysis on AQAP, Yemen, and emerging hotspots in the RESPONSE Middle East and North Africa continues to aid AEI’s Marilyn Ware Center for decision makers today. Security Studies

To learn more, visit www.criticalthreats.org. AEI’s Marilyn Ware Center for Security Studies understands that American leadership is a moral imperative. Established in 2012, the center has launched two new initiatives to restore confidence in America as a guarantor of security and stability throughout the world. Top priorities of the center’s special projects include

• Engaging policymakers, candidates, and potential senior cabinet officials. AEI’s National Security Study Project: 2014–16 is informing current and future leaders about AEI’s Fred Kagan and Rep. Buck McKeon (R-CA) discuss the emerging security threats and the growing US approach to ISIS, September 11, 2014. demands on US military power. In addition to these priorities, the center is also • Shifting public opinion in favor of describing the force requirements for the US military American leadership. Led by former US in the coming years and rethinking how our nation senators Jon Kyl and Joseph Lieberman, the can best protect core and future military capabilities American Internationalism Project is build- through much-needed reforms in areas such as ing bipartisan consensus behind a policy military technology, overhead and infrastructure, agenda that recognizes America’s indispensa- and health care and retirement reform in a period of ble role in the world. budgetary retrenchment.

AEI Research 9 Charles Miller, former chair of the Spellings Commission on the Future of Higher Education, praised cant debt to finance their children’s education, or watch a recent report by Andrew Kelly on their children languish in low-paying, low-skill jobs. helping students bridge the pipeline between K–12 and higher education RESPONSE as a “superb piece of work.” AEI’s Center on Higher Education Reform

AEI’s Center on Higher Education Reform recognizes CHALLENGE that current policy is failing families, students, and Rising Tuition Prices Threaten the taxpayers. Led by Andrew Kelly, the center is suggest- American Dream ing supply-side reforms to encourage and reward innovative providers that deliver affordable, high- Since 1982, the cost of a public, four-year college edu- quality instruction. The center’s focus on the college cation has quadrupled (even adjusting for inflation), accreditation process has drawn significant attention saddling the average borrower with nearly $30,000 in from policymakers and spurred new legislative student loan debt. These conditions leave many Ameri- proposals to eliminate regulatory barriers and revolu- can families with an unpleasant choice: amass signifi- tionize the higher education sphere.

CHALLENGE Housing Finance Market Shows • National Mortgage Risk Index—measures Troubling Signs homebuyers’ mortgage default risk across the nation using large data sets and objective Fully half of all home loans issued today have a down statistics. payment of 5 percent or less, indicating that easy lend- ing continues even after the Great Recession. Mean- • Collateral Risk Index—monitors the differ- while, home prices continue to rise faster than incomes, ence between the market price of a home (in averaging 6.75 percent for home prices while median select cities nationwide) and its intrinsic value. household income was unchanged year over year. This is creating unsustainable home prices in some areas of • Wealth Building Home Mortgage— the country, particularly low-income areas of California. designed to serve the twin goals of providing A minor correction in the housing market could leave a broad range of homebuyers—including millions of Americans’ mortgages underwater. low-income, minority, and first-time buyers— a more reliable and effective means of building RESPONSE wealth than is currently available under AEI’s International Center on Housing Risk existing mortgage programs, while maintain- ing buying power similar to a 30-year loan. Led by Edward Pinto and Stephen Oliner, AEI’s The Wealth Building Home Loan has received International Center on Housing Risk is providing rave reviews. policymakers, lenders, and borrowers with unprece- dented information about risks in the housing and These products are helping build a more stable mortgage market and is developing a much less risky housing market by identifying potential bubbles, path to home ownership than the standard 30-year drawing scrutiny to government-backed lending, mortgage. With contributions from AEI financial and providing market-based solutions. In doing services scholars Paul Kupiec, Alex Pollock, and Peter so, the center is protecting homeowners and tax- Wallison, the center's signature products include: payers alike.

10 AEI Annual Report IDEAS INTO ACTION A Case Study with Michael Strain

Solving America’s Unemployment Crisis essay, “A Jobs Agenda for the Right,” offers a portfo- lio of market-oriented ideas to return Americans to As a think tank that takes action, AEI exists to gener- the workforce, such as: ate positive, tangible improvements to policy that preserve and strengthen freedom, opportunity, and • Offering relocation vouchers to help free enterprise. Illustrating that mission in action is Americans move to parts of the nation Michael Strain, whose work on long-term unemploy- with low unemployment. ment is having a noticeable impact on the policy- making process. Here’s how AEI is turning Strain’s • Lowering the minimum wage for the long- ideas into action. term unemployed and supplementing their income with an expanded version of the Addressing the Issue earned income tax credit.

More than five years have passed since the height of • Scaling back unnecessary occupational the Great Recession, yet America’s jobs crisis is far licensing to help entrepreneurial Americans from over. Especially worrisome are the Americans enter the workforce more easily. who have been out of the workforce for more than 26 weeks and therefore classify as long-term Defining the Debate unemployed. Based on the US Department of Labor’s October report, nearly three million Americans fit After releasing his National Affairs essay, Strain was that description. Strain’s Winter 2014 National Affairs interviewed by CNBC, NPR, and the Washington

Ideas into Action 11 “Having scholars like Michael Strain connect with policymakers on both sides of the political aisle has been a huge benefit to AEI’s quest to inject sound policy research into the national debates.” —AEI’s director of government relations, John Cusey

“With his new jobs agenda, Strain wins my vote for most important conservative Reshaping the Policy Landscape reformer, and the one who could have In February, Reps. Tony Cardenas (D-CA) and the biggest beneficial impact on the Mick Mulvaney (R-SC) introduced the American well-being of Americans struggling to Worker Mobility Act, which would provide climb the economic ladder.” long-term unemployed Americans with a relocation —Reihan Salam, Online subsidy if they moved to a region with an unem- ployment rate at least 2 percent lower than their Post about his recommendations. Strain’s essay also current residence. Without adding to the budget, received widespread praise from thought leaders the subsidy would represent an advance payment such as New York Times columnist David Brooks on benefits that the long-term unemployed were and politically diverse news outlets such as New scheduled to receive. York Magazine, , and National Review. Shortly thereafter, the Washington Post selected Strain to write a twice-monthly opinion column on domestic policy.

Engaging Leaders on Capitol Hill

After publishing his National Affairs piece, Strain:

• Headlined an AEI-sponsored Capitol Hill event, drawing more than 50 House and Senate staffers.

• Met privately with members of the House Committee on Education and the Workforce. AEI’s digital team turned Strain’s influential National Affairs • Briefed House and Senate legislative piece into an engaging and accessible infographic. The graphic, posted online with a copy of the article, has directors, House communications been viewed more than 25,000 times. directors, and select House and Senate chiefs of staff.

12 AEI Annual Report AEI COMMUNICATIONS

Building a Broad Coalition behind Freedom, Opportunity, and Free Enterprise

AEI’s Visibility Continues to Rise our growing presence on social media sites Twitter, Facebook, and Google+ helps AEI deliver our work AEI recognizes that great scholarship demands to followers nationwide. powerful communications strategy and capabilities. Even as more scholars are appearing in print, Our aggressive investments in that sphere are AEI remains a prominent voice on the nation’s producing tangible results every day. top broadcast media, with scholars doing more A recent focus on expanding our scholars’ impact than 2,800 television and radio interviews in 2014. in the nation’s leading newspapers has culminated AEI scholars are regularly featured on the nation’s in significant gains, with AEI scholars penning more most influential television programs, including than 3,100 op-eds in 2014—up more than 70 percent NBC’s , CBS’s Face the Nation, and from the previous year. And we are not sacrificing CNN’s State of the Union, appearing 10 times on quality for quantity. AEI scholars are frequently in the marquee Sunday morning news programs in 2014. nation’s top newspapers, appearing more than 75 times Within AEI, we are producing creative video in 2014 in the New York Times, Wall Street Journal, content to solidify our reputation as a leading and Washington Post alone. Our blog, AEIdeas, is source of policy analysis. Our “AEI Top Three” also a leading destination for analysis that straddles video series offers viewers a brief video overview the intersection of policy, politics, and news. And of key policy issues, ranging from the Israel-Gaza

AEI Communications 13 “AEI is at a key moment in its history. The organization has become an increasingly relevant source of ideas and policy proposals for Republicans as the party seeks to move its focus away from debt and spending and toward more politically popular policies that directly address the nation's top challenges, such as poverty and mobility.” — Zachary A. Goldfarb, Washington Post, February 2014

conflict to the downing of Malaysia Airlines Flight 17 Aron’s outsized influence on the debate even prompted to the surge in immigrants across America’s southern state-owned Russian newspaper Izvestia to list him border. AEI scholars have embraced this medium as one of the “sharpest critics of Russia”—a label he as a powerful tool for contributing to the policy takes as a compliment. conversation and are generating new ideas for weekly videos.

Communications Case Studies

AEI harnesses a full range of media platforms— Michael Rubin, Resident Scholar including books and op-eds, broadcast television and radio, and online videos—to amplify scholars’ work Since releasing his February 2014 book Dancing to national and even global audiences. The following with the Devil: The Perils of Engaging Rogue Regimes snapshots highlight AEI’s varied approach to shaping (to appear in paperback in Spring 2015), Michael the nation’s policy debates. Rubin has conducted more than 100 radio and television interviews—on Fox News, MSNBC, Bill Bennett’s Morning in America, and other outlets—to describe the hazards of diplomacy with adversarial nations. The Wall Street Journal summarized Rubin’s overarching thesis in a favor- Leon Aron able book review, stating “engaging with rogue Director of Russian Studies regimes often exacts heavier costs than not and, Russia’s March 2014 annexation of Crimea thrust worse, can make war with them more likely.” Leon Aron into the spotlight, with national and international news outlets seeking his analysis of Russian foreign policy. In that month alone, Aron: Arthur Brooks, • Appeared on 23 radio and television President programs; Beth and Ravenel Curry Scholar in Free Enterprise

• Penned five op-eds and blog posts; and Fusing economics, psychology, social science research, and theology, Arthur Brooks explored the • Filmed two AEI Top Three videos for AEI’s relationship between free enterprise and human YouTube page. flourishing during a major October 2013 public address. AEI filmed Brooks’s remarks and uploaded

14 AEI Annual Report 2014 BY THE NUMBERS

Background Conversations with journalists, 704 110 bookers, and producers

Public Events held at AEI’s headquarters, many of them involving high-level policymakers, top business leaders, and notable scholars, and attracting nearly 10,000 attendees over the course of the year. Students in AEI’s Student Network 2,374 Blog posts from AEIdeas 3,537

AEI scholars appeared 10 times on marquee Sunday morning shows 88 Television Radio AEI events held on campuses 1,350Interviews 1,503 Interviews around the country

AEI has 33 scholars that contribute regularly to 25 different outlets including: New York Times, Washington Post, Wall Street Journal Asia, Foreign Policy, The Hill, Forbes, National 3,166 Journal, US News and World Report, Real Clear, National

Total op-eds Interest, Bloomberg View, , National Journal, Investor’s Business Daily, National Review, Washington Examiner, USA Today, , and TIME.com

2,081 videos FACEBOOK 79 and TWITTER 4.8 million followers of AEI Views Op-eds Published and Arthur Brooks the video to our YouTube page on December 13— by AEI scholars in the New York Times, the same day that his op-ed, “A Formula for Washington Post, and 222,000 on AEI’s YouTube channel Wall Street Journal and 33,000 subscribers Happiness,” ran in the New York Times. The video has since drawn more than 400,000 views. Numbers above represent the period from January 1, 2014 to November 1, 2014.

James Capretta, Visiting Fellow Nicholas Eberstadt, Through more than 40 television and radio inter- Henry Wendt Chair in Political Economy views in 2014, James Capretta has highlighted the diversity of conservative alternatives to Obamacare Published in June, Nicholas Eberstadt’s influential and described his own set of reforms, which National essay, The Great Society at Fifty, offers a balanced Review editor Rich Lowry, New York Times columnist look, 50 years later, at the successes and failures Ross Douthat, and Washington Post columnist of President Lyndon Johnson’s Great Society refer to as “Capretta-Care.” The pledge. Eberstadt praises the Great Society for YG Network, a conservative policy advocacy group eliminating legalized racial discrimination but with strong ties to House leadership, also selected attributes the ongoing decline in marriage and Capretta to author the health care component of its workforce participation to its expanded welfare domestic policy agenda. In it, he describes how to programs. Syndicated columnist dedi- replace bureaucratic mandates with new reforms cated an entire column to Eberstadt’s essay, which that cover preexisting conditions, increase competi- also drew coverage from Forbes, USA Today, and tion, and place downward pressure on health the Wall Street Journal. care spending.

AEI Communications 15 Members of AEI’s Leadership Network gather for the inaugural Leadership Summit at AEI’s headquarters, October 23–25, 2014

AEI OUTREACH Leading Leaders in Washington and Beyond

Government Relations ing taxes, economics, and health care, are planned for 2015. Members of Congress and other senior policymakers know that they can turn to AEI at a moment’s notice Coalitions for empirical, nonpartisan policy analysis. That repu- tation helps explain why AEI scholars were asked Today’s battles over public-sector pension reform, to testify 86 times during the 113th Congress— school choice, and Medicaid spending demonstrate more than scholars from any other policy organiza- how the fight for free enterprise is taking place at tion. But AEI’s Government Relations department the state and even local levels of government. While also plays an integral role in building and nurtur- AEI focuses on policy issues primarily at the national ing scholar relationships on Capitol Hill, helping level, our external affairs team is building an alliance ensure that our work reaches leaders and produces of state and local leaders in business, nonprofits, concrete results. and community organizations who are positioned In 2014, AEI’s Government Relations depart- to make the moral case for free enterprise in their ment launched a bipartisan educational program communities. Members of AEI’s new Leadership for one of its most influential constituencies: high- Network have access to a variety of AEI resources, level congressional staffers. Through AEI’s Marilyn including an online curriculum on policy and Ware Center for Security Studies, our Program on messaging, as well as regular conference calls with Strategic Decision-Making convened a series of AEI scholars. participatory discussions, war games, and crisis In October, we hosted nearly 50 members for simulations focusing on foreign and defense policy. our inaugural Leadership Summit, a three-day Led by Gary Schmitt and Thomas Donnelly, the educational summit featuring scholars such as program provided staffers with a nuanced under- Karlyn Bowman, Robert Doar, Charles Murray, standing of key security challenges, as well as the and Frederick Hess, among many others. Feedback tools and thinking to respond effectively. Future from the event was overwhelmingly positive, programs on relevant domestic policy issues, includ- with 92 percent of attendees indicating that after

16 AEI Annual Report In the wake of the 2014 midterm elections, AEI is poised to play a historic educational role. For the first time in the Institute's history, AEI helped lead three different policy orientations for new members of Congress—both Republicans and Democrats. attending the event, they are now Think Tank Congressional Testimony in the 113th Congress more likely to promote free enter- January 1, 2014–November 1, 2014 prise in their communities.

American Enterprise Institute 86

Major Events Brookings Institution 57

Heritage Foundation 48 AEI by the Numbers, 113th Congress AEI also offers policymakers a plat- Center for Strategic and International Studies 38 Private form to unveil major legislation Center for American Progress 26 859 Meetings and weigh in on specific policy Cato Institute 23 86 Testimonies issues. In 2014, 64 policymakers Peterson Institute 15 from both sides of the aisle— Carnegie Endowment 12 206 Hill Events including Sen. Mitch McConnell Source: AEI (R-KY), Sen. Marco Rubio (R-FL), Rep. Chris Van Hollen (D-MD), Gov. Chris Christie (R-NJ), Gov. Mike Pence (R-IN), Rep. internship program, Summer Honors Program (for- Paul Ryan (R-WI), Chairman of the Council of merly known as the Summer Institute), and research Economic Advisers Jason Furman, and former assistant positions with AEI scholars. And even more Chairman of the Federal Reserve Alan Greenspan— broadly, we are building deep, substantive relation- spoke at AEI events. ships with a generation of young leaders—among them, future policymakers, business executives, and AEI on Campus journalists—who look to AEI as the nation’s leading source of policy innovation. AEI’s campus programs are growing rapidly and offer unique opportunities for college students seeking to Charles Murray’s Advice for Young People participate in a more robust competition of ideas on their campuses. Our goal is to build a broad coalition Charles Murray has an important message for of students and faculty allies—from all ideological younger generations: curmudgeons abound in backgrounds—who recognize that the free enterprise the workplace and make frequent judgments system gives us all the best shot at living the best life. about their young employees’ dress, grammar, That positive, mission-driven message is resonating and work ethic. Murray’s latest book, The with students. Curmudgeon’s Guide to Getting Ahead, is designed In a little over a year, we have grown our to help recent graduates navigate office minefields student network to more than 3,500 members and embark on a successful career—and more from 430 campuses. Much of that growth is importantly, a happy life. attributable to our new, campus-based executive One of the most popular AEI scholars among councils, which now exist at 76 schools. A select college audiences, Murray visited 13 campuses group of handpicked student leaders, our execu- during the 2013–14 academic year to discuss tive council members host campus events and The Curmudgeon’s Guide to Getting Ahead, his 2013 policy seminars with AEI scholars; organize monograph , and his discussion groups focused on AEI scholarship; 2012 bestseller Coming Apart. He also taught a and network with other student leaders, AEI weeklong course on human flourishing to AEI’s scholars, entrepreneurs, and business leaders Summer Institute students and addressed AEI’s from around the nation. class of spring interns. One of his most fervent By developing a stronger campus presence, AEI pleas was, “Excise the word ‘like’ from [your] is better positioned to identify top candidates for our vocabulary.”

AEI Outreach 17 Top photo: Arthur Brooks speaks to 2014 AEI Summer Institute and Institute for Responsible Citizenship students as part of the “Leading Leaders” speaker series. Bottom far left: speaks to the 2014 AEI Summer Institute students. Bottom center-left: (left to right) Pranay Udutha, Michael McShane, Kayla Nguyen, and Noah McCullough at the 2014 AEI on Campus DC Area Intern Reception. Bottom center-right: AEI Trustee (and “Leading Leaders” guest speaker) Raymond Gilmartin talks with Paul Kolotka, 2014 Summer Institute student and AEI Executive Council member at the University of Alabama. Bottom far right: The 2014 Summer Institute class visits a House Ways and Means Committee Meeting.

AEI Summer Institute Brown University student Jason Ginsberg described the program as “an opportunity for enormous expo- AEI’s Summer Institute (to be renamed the AEI sure, widening my perspective on an array of current Summer Honors Program in 2015) offers an inside issues. The new speakers, readings, and discussions look at the policymaking process and political land- that we had every day allowed me the opportunity to scape for select college students and recent graduates. better refine my own ideas and develop new under- Expanded to a six-week program, our 2014 program standings of the world around me.” featured intensive seminars on a range of issues, including military decision making, fiscal policy reform, and the building blocks of human flourishing, Recent Campus Programs Highlights all of which were taught by AEI scholars such as Thomas Donnelly, Frederick Kagan, Charles Murray, • Boston College’s Executive Council held Gary Schmitt, and Michael Strain. AEI scholars an event with Arthur Brooks on happi- Michael Barone, Karlyn Bowman, Nicholas Eberstadt, ness and the free enterprise system, and , as well as Weekly Standard drawing more than 200 students. editor William Kristol and AEI trustee and former • debated Washington Merck CEO Raymond Gilmartin, among others, also Post columnist Eugene Robinson on the spoke to students on specific issues in politics, policy, role of government before 500 Miami and business. University students. Hundreds of competitive students applied for just 25 openings, allowing us to convene a remarkable • Marc Thiessen and Phillip Lohaus mod- group of students from top colleges. Among the par- erated an online discussion on the Syrian civil war with 85 student participants. ticipants were interns for Sen. Mark Kirk (R-IL) and Gov. Steve Beshear (D-KY), two editors-in-chief of • AEI’s Executive Council Fall Leadership campus newspapers, a member of a Coast Guard Conference convened 76 members of Auxiliary Unit, and the chairman of the Yale our campus-based Executive Councils Conservative Party. Upon the close of the program, for two days of policy briefings and strat- egy sessions at AEI headquarters.

18 AEI Annual Report Top left: Bill Gates is interviewed by Arthur Brooks during a public event at AEI. The wide-ranging dis- cussion covers topics such as global philanthropy and AEI EVENTS capitalism, US foreign aid, and the Common Core. Gates expresses concern that an increase in the federal minimum wage could harm the labor market. Engaging Diverse Audiences Top center and right: During his two-day symposium at AEI, His Holiness the Dalai Lama discusses the with New Ideas intersection of free enterprise and human flourishing with a variety of luminaries, including psychologist Jonathan Haidt, economist Glenn Hubbard, and hedge fund manager Dan Loeb. Each year, AEI hosts more than 200 events at our headquar-

Middle left: Sen. Kelly Ayotte (R-NH) visits AEI to dis- ters, on Capitol Hill, and in select cities nationwide, featuring cuss what the United States is doing to address the existential threat of a missile attack on the homeland, AEI scholars, public intellectuals, policymakers, journalists, and what can it do to bolster those efforts. She is joined in conversation by former Senator Jon Kyl and and business leaders. In 2014, AEI convened a series of pub- leading figures in the defense industry to address this lic events with nontraditional speakers, helping us broaden pressing national security concern. our reach to audiences that were previously unfamiliar with Middle center: Sri Sri Ravi Shankar, a leading Hindu spiritual figure, talks to Arthur Brooks about his Art of our ideas and persuade them that the free enterprise system Living Foundation and the importance of compassion in the free enterprise system. More than 300 atten- creates the greatest opportunity for all people. dees fill AEI’s conference center to hear Sri Sri explain why humanism is a prerequisite to capitalism. This effort is making an impression on even the event Middle left: Campbell Brown, founder of the participants themselves. Indeed, His Holiness the Dalai Lama Partnership for Educational Justice and former CNN news anchor, presents remarks at AEI about her declared, “Today, I developed more respect for capitalism,” efforts to reform teacher tenure laws in New York. after headlining a February event at AEI headquarters, Bottom: Chinese activist Chen Guangcheng speaks publicly in English for the first time at an AEI event sending a powerful message to the audience watching both marking the 25th anniversary of the Tiananmen Square massacre. A self-educated lawyer, Chen in person and online. describes the fundamental human desire for liberty and criticized the Chinese government’s disregard for basic human rights.

AEI Events 19 Integrating Research, Communications, and Outreach through AEI’s Program on Human Flourishing

AEI recognizes that the free enterprise system does not New Scholars Bolster AEI’s Human simply make us more prosperous—it also makes us Flourishing Work better people. In early 2014, AEI launched the Program on Human Flourishing, a new initiative that combines Robert Doar, Morgridge Fellow in Poverty Studies original research with our communications and outreach The former commissioner of New York City’s Human functions to champion the moral case for free enterprise. Resources Administration, Doar administered 12 public assistance programs for the largest social services agency Strengthening the Pathway to in the nation and oversaw a 25 percent reduction in Human Flourishing New York’s welfare caseload. At AEI, he is focusing on improving health, education, and employment out- Transformation: Nurturing Institutions at comes for children and young adults. the Core of Society Bradford Wilcox is focusing on the economics of family Kevin Corinth, Research Fellow formation and suggesting tax reforms that encourage Corinth joined AEI in June after completing his PhD marriage among low- and moderate-income Americans. in economics from the University of Chicago. At AEI, he is studying public-sector and behavioral Material Relief: Building a Safety Net That Works economics with a particular concentration on home- Through AEI’s new research focus on antipoverty policy, lessness and education. Robert Doar and Kevin Corinth are investigating how targeted federal policy can help more Americans transi- Kevin James, Research Fellow, Center on Higher tion into the workforce and earn their success. Education Reform Prior to joining AEI in August, James was a legislative Opportunity: Helping More Americans Earn aide working on education issues for Rep. Tom Petri Their Success (R-WI), a senior member of the House Education Education policy scholars Frederick Hess, Andrew Kelly, and Workforce Committee. James’s research interests Michael McShane, Kevin James, and Katharine Stevens include higher education financing, quality assurance, are developing full-scale reforms at the K–12, postsec- and access issues for traditionally underrepresented ondary, and pre-K levels, helping make schools more populations. accountable to students and more responsive to the demands of the labor market that students will enter. Katharine Stevens, Research Fellow in Early Childhood Education and Development New Products to Guide the Policy Stevens joined AEI in September, bringing expertise in Conversation state and district teacher policy, teacher quality, strategic workforce management, administrative law, and educa- AEI is filming and disseminating a series of videos with tion equity, particularly in urban schools. Stevens has scholars, thinkers, and practitioners who offer fresh, more than 20 years of on-the-ground and research and unique visions in key policy areas. Installments in AEI’s policy experience in urban education reform, focused “Vision Talks” have featured Arthur Brooks, Bloom- on bettering public schools for low-income students berg View columnist Megan McArdle, Robert Doar, through improving teacher quality and human capital Frederick Hess, DC Chancellor of Public Schools Kaya management systems. Henderson, and Marquette University’s Howard Fuller.

20 AEI Annual Report AEI CAMPAIGN For Free Enterprise and American Progress

AEI’s Campaign for Free Enterprise and American Progress is supporting the acquisition and renova- tion of our new headquarters building in Washington, DC, making possible new research programs and communications enhancements and helping to underwrite the Institute’s long-term financial stability. Thanks to the generous investments of our individual, corporate, and foundation donors, we have to date obtained pledges of nearly $87 million toward our $100 million goal. Our community’s remarkable generosity positions AEI to continue our leadership role in the public policy debate for decades to come.

Daniel A. D’Aniello, vice chairman of AEI’s Board key policy topics and expand our research focus to of Trustees and chairman and cofounder of the emerging issues. AEI’s soon-to-launch Open Source Carlyle Group, made an anchor investment in AEI’s Policy Center will offer dynamic models to evaluate campaign in February with his $20 million pledge new tax proposals and modifications to existing in support of AEI’s mission to promote individual revenue measures. Moreover, several campaign liberty, equal opportunity, and free enterprise. We contributors have endowed new chairs, including are honored to name our new headquarters, located the Beth and Ravenel Curry Chair in Free Enterprise on Massachusetts Avenue’s “Think Tank Row,” the and the State Farm James Q. Wilson Chair in Daniel A. D’Aniello Building. American Politics and Culture, which are occupied AEI’s campaign is helping us develop the infra- by Arthur Brooks and Kevin Hassett, respectively. structure to amplify AEI’s world-class research and We look forward to moving into the Daniel A. enhance our engagement with new and existing follow- D’Aniello Building in late 2015 and continuing ers. Our new home will boast television and radio stu- our fight for free enterprise in a physical space dios and a video production suite that will help AEI that enhances our ideas-driven mission. For more produce and deliver our work to global audiences. information about AEI’s Campaign for Free In addition to tangible infrastructure, AEI’s Enterprise and American Progress, please visit campaign enables us to deepen our scholarship on http://campaign.aei.org.

AEI Campaign 21 THE AEI COMMUNITY A National Coalition Dedicated to Freedom, Opportunity, and Free Enterprise

With fewer than 1,500 individual, foundation, and corporate donors, AEI’s community is disproportionately small compared to our influence and impact on the policy landscape. Indeed, this fact underscores our supporters’ commitment to AEI’s positive, inclusive mission to defend and strengthen the free enterprise system. Our investors—who make all of our work possible—have a broad range of opportunities to engage with AEI in forums across the nation and participate in an ideas-driven mission to improve public policy in America.

AEI Board of Trustees—San Francisco AEI’s Board of Trustees is composed of 28 leaders in finance, industry, academia, and public policy from around the nation and is chaired by Tully Friedman, San Francisco resident and AEI trustee since 1987.

Los Angeles Roundtable Hosted by AEI’s Los Angeles Council members, our annual Los Angeles Roundtable featured a panel discussion on domestic policy and the November midterm elections with Ramesh Ponnuru, Robert Doar, Michael Strain, and Jonah Goldberg. National Council public member(s) Enterprise Club member(s) Regional Council AEI Enterprise Club—Austin Trustee(s) AEI’s Enterprise Club is an invitation-only group of 30–40-year-old young professionals in Development events and visits in 2014 business, finance, law, and public policy with more than 225 members and chapters in 12 cities across the nation. One of our most robust chapters, AEI’s Austin-based Enterprise Club counts 30 members and hosted events in 2014 with Michael Auslin, John Bolton, Michael McShane, Charles Murray, Ramesh Ponnuru, and Michael Rubin.

22 AEI Annual Report AEI National Council—Chicago AEI’s National Council is a coalition of supporters who AEI30—New York share a deep commitment to strengthening the free AEI30 is a new forum for rising leaders in enterprise system. Serving as unofficial AEI ambassa- Regional Council Events—St. Louis, New York City with a demonstrated interest dors, National Council members help introduce AEI to Nashville, and Indianapolis in public policy. An invitation-only group their friends and colleagues around the nation. Since AEI scholars are on the road nearly every week to open to those under age 30, AEI30 2012, the National Council has nearly tripled in size meet with our supporters nationwide, participating in officially launched in September with an to more than 140 public members, of whom 23 are more than 150 donor-focused events in 2014. Among event featuring KKR’s Marc Lipschultz. Chicago-area residents. those events, Derek Scissors headlined a luncheon in St. Louis to speak on Asian economic issues, Scott Gottlieb discussed the Obamacare rollout with AEI’s Nashville supporters, and Michael McShane spoke on school choice at an AEI reception in Indianapolis.

AEI Alumni Program—Washington, DC AEI’s new Alumni Program is for engaged supporters who have previously worked or interned at AEI. Members attended a reception in July at AEI headquarters with Arthur Brooks and scholars Karlyn Bowman, Christina Hoff Sommers, and Alan Viard (a former AEI intern under AEI scholar Herbert Stein).

AEI World Forum—Sea Island, GA AEI’s World Forum, our marquee event held each year in March, convenes dozens of congressional leaders, governors, and executive branch officials, as well as major opinion leaders and top executives from the world’s corporations and financial firms. Attendees participate in a robust idea exchange on global Regional Councils—Tampa and Jacksonville economics, foreign and defense policy, culture, AEI’s growing regional councils, now active in 14 cities nationwide, are helping AEI and politics during the weekend gathering at deepen our engagement with supporters nationwide. Our chapters in Tampa and Sea Island, Georgia. Jacksonville—cities with rich ties to the AEI community—are two of our most vibrant regional councils, counting more than 60 members between them. Arthur Brooks, Jonah Goldberg, Kevin Hassett, and Danielle Pletka were among the AEI scholars who participated in 2014 events in Tampa and Jacksonville.

AEI Community 23 Board of Trustees GEORGE L. PRIEST ELIOT A. COHEN Yale Law School Paul H. Nitze School of Advanced TULLY M. FRIEDMAN, Chairman International Studies Chairman and CEO KEVIN B. ROLLINS Johns Hopkins University Friedman Fleischer & Lowe LLC Senior Adviser TPG Capital EUGENE F. FAMA DANIEL A. D'ANIELLO, Vice Chairman Robert R. McCormick Distinguished Chairman and Cofounder MATTHEW K. ROSE Service Professor of Finance The Carlyle Group Chairman and CEO Booth School of Business BNSF Railway Company University of Chicago CLIFFORD S. ASNESS EDWARD B. RUST JR. Managing and Founding Principal MARTIN FELDSTEIN AQR Capital Management Chairman and CEO State Farm Insurance Companies George F. Baker Professor of Economics Harvard University GORDON M. BINDER Managing Director D. GIDEON SEARLE AARON L. FRIEDBERG Coastview Capital LLC Managing Partner The Serafin Group LLC Professor of Politics and International Affairs ARTHUR C. BROOKS President and Beth and MEL SEMBLER Ravenel Curry Chair in Free Enterprise, Founder and Chairman ROBERT P. GEORGE American Enterprise Institute The Sembler Company McCormick Professor of Jurisprudence Director, James Madison Program THE HONORABLE RICHARD B. CHENEY WILSON H. TAYLOR in American Ideals and Institutions Chairman Emeritus Princeton University Cigna Corporation PETER H. COORS Vice Chairman of the Board ERIC A. HANUSHEK WILLIAM H. WALTON Molson Coors Brewing Company Paul and Jean Hanna Senior Fellow Managing Member Hoover Institution Rockpoint Group LLC HARLAN CROW Stanford University Chairman and CEO MARILYN WARE Crow Holdings Ware Family Office R. GLENN HUBBARD Dean and Russell L. Carson Professor RAVENEL B. CURRY III of Finance and Economics Chief Investment Officer Columbia Business School Eagle Capital Management LLC Emeritus Trustees WALTER RUSSELL MEAD JOHN V. FARACI RICHARD B. MADDEN James Clarke Chace Professor of Chairman ROBERT H. MALOTT International Paper Company Foreign Affairs and the Humanities PAUL F. OREFFICE Bard College CHRISTOPHER B. GALVIN HENRY WENDT Chairman JOHN L. PALMER Harrison Street Capital LLC University Professor and Dean Emeritus Maxwell School of Citizenship Officers RAYMOND V. GILMARTIN and Public Affairs Harvard Business School ARTHUR C. BROOKS Syracuse University President HARVEY GOLUB MARK PAULY Retired Chairman and CEO, DAVID GERSON Bendheim Professor, Professor of American Express Company; Executive Vice President Health Care Management Chairman, Miller Buckfire Wharton School at the University JASON BERTSCH of Pennsylvania ROBERT F. GREENHILL Senior Vice President, Development Founder and Chairman SAM PELTZMAN Greenhill & Co. Inc. DANIELLE PLETKA Ralph and Dorothy Keller Distinguished Senior Vice President, Foreign and Service Professor of Economics FRANK J. HANNA Defense Policy Studies Booth School of Business Hanna Capital, LLC University of Chicago TOBY STOCK SETH A. KLARMAN Vice President, Development and Academic Programs JEREMY A. RABKIN President and CEO Professor of Law The Baupost Group LLC George Mason University School of Law BRUCE KOVNER Council of Academic Advisers HARVEY S. ROSEN Chairman John L. Weinberg Professor of Economics Caxton Alternative Management LP GEORGE L. PRIEST, CHAIRMAN and Business Policy Edward J. Phelps Professor of Law Princeton University MARC S. LIPSCHULTZ and Economics Partner Yale Law School Kohlberg Kravis Roberts RICHARD J. ZECKHAUSER ALAN J. AUERBACH Frank Plumpton Ramsey Professor JOHN A. LUKE JR. Robert D. Burch Professor of of Political Economy Chairman and CEO Economics and Law Kennedy School of Government MeadWestvaco Corporation University of California, Berkeley Harvard University Research Staff THOMAS DONNELLY ANDREW P. KELLY GARY J. SCHMITT Codirector, Marilyn Ware Director, Center on Higher Codirector, Marilyn Ware Center Center for Security Studies; Education Reform; Jacobs for Security Studies; Director, JOSEPH ANTOS Resident Fellow Associate; Resident Scholar Program on American Wilson H. Taylor Scholar Citizenship; Resident Scholar in Health Care and Retirement MACKENZIE EAGLEN PAUL H. KUPIEC Policy; Resident Scholar Resident Fellow Resident Scholar MARK SCHNEIDER Visiting Scholar LEON ARON NICHOLAS EBERSTADT JON KYL Director, Russian Studies; Henry Wendt Scholar in Visiting Fellow DAVID SCHOENBROD Resident Scholar Political Economy Visiting Scholar DESMOND LACHMAN PAUL ATKINS JEFFREY EISENACH Resident Fellow DEREK SCISSORS Visiting Scholar Director, Center for Internet, Resident Scholar Communications, and Technology ADAM LERRICK MICHAEL AUSLIN Policy; Visiting Scholar Visiting Scholar SITA SLAVOV Resident Scholar Visiting Scholar JON ENTINE PHILLIP LOHAUS CLAUDE BARFIELD Visiting Fellow Research Fellow VINCENT SMITH Resident Scholar Director, Agriculture Studies; R. RICHARD GEDDES JOHN H. MAKIN Visiting Scholar MICHAEL BARONE Visiting Scholar Resident Scholar Resident Fellow CHRISTINA HOFF SOMMERS JAMES K. GLASSMAN APARNA MATHUR Resident Scholar ROGER BATE Visiting Fellow Jacobs Associate; Resident Scholar Visiting Scholar KATHARINE B. STEVENS JONAH GOLDBERG MICHAEL MAZZA Research Fellow RICHARD BENNETT Fellow Jacobs Associate; Research Fellow Visiting Fellow THOMAS P. STOSSEL ASPEN GORRY J. MATTHEW MCINNIS Visiting Scholar Resident Fellow WALTER BERNS Visiting Scholar Resident Scholar, Emeritus MICHAEL R. STRAIN SCOTT GOTTLIEB, MD MICHAEL Q. MCSHANE Deputy Director, Economic Policy Research Fellow ANDREW G. BIGGS Resident Fellow Studies; Resident Scholar Resident Scholar PHIL GRAMM THOMAS P. MILLER PHILLIP SWAGEL Resident Fellow EDWARD BLUM Visiting Scholar Visiting Scholar Visiting Fellow WILLIAM C. GREENWALT CHARLES MURRAY JIM TALENT W. H. Brady Scholar DAN BLUMENTHAL Visiting Fellow Director, Marilyn Ware Center’s Director, Asian Studies; National Security 2020 Project; Resident Fellow MARY HABECK ROGER F. NORIEGA Senior Fellow Visiting Scholar Fellow JOHN R. BOLTON SHANE TEWS STEPHEN D. OLINER Senior Fellow KEVIN A. HASSETT Visiting Fellow Director, Economic Policy Codirector of AEI’s International Studies; State Farm James Q. Center on Housing Finance; MARC A. THIESSEN KARLYN BOWMAN Resident Scholar Research Coordinator; Wilson Chair in American Politics Fellow Senior Fellow and Culture NORMAN J. ORNSTEIN STAN A. VEUGER Resident Scholar ALEX BRILL ROBERT B. HELMS Resident Scholar Resident Scholar Research Fellow MARK J. PERRY ALAN D. VIARD Scholar Resident Scholar JAMES C. CAPRETTA FREDERICK M. HESS Director, Education Policy Visiting Fellow Studies; Resident Scholar JAMES PETHOKOUKIS PETER J. WALLISON Editor, AEIdeas Blog; Arthur F. Burns Fellow in TIMOTHY P. CARNEY R. GLENN HUBBARD DeWitt Wallace Fellow Financial Policy Studies; Visiting Fellow Visiting Scholar Resident Fellow TOMAS PHILIPSON LYNNE V. CHENEY WILLIAM INGLEE Visiting Scholar W. BRADFORD WILCOX Senior Fellow Visiting Fellow Visiting Scholar EDWARD PINTO EDWARD CONARD KEVIN JAMES Codirector, AEI’s International Visiting Scholar Research Fellow Center on Housing Finance; Scholar Resident Fellow KEVIN CORINTH MATTHEW H. JENSEN JOHN YOO Research Fellow Managing Director, Open ALEX J. POLLOCK Visiting Scholar Source Policy Center Resident Fellow MIKE DANIELS ROGER ZAKHEIM Visiting Fellow FREDERICK W. KAGAN RAMESH PONNURU Visiting Fellow Director, AEI Critical Threats Visiting Fellow SADANAND DHUME Project; Christopher DeMuth KATHERINE ZIMMERMAN Resident Fellow Chair; Resident Scholar MICHAEL RUBIN Research Fellow Resident Scholar ROBERT DOAR LEON R. KASS, MD BENJAMIN ZYCHER Morgridge Fellow in Poverty Madden-Jewett Chair; SALLY SATEL, MD John G. Searle Chair; Studies; Resident Fellow Resident Scholar Resident Scholar Resident Scholar AEI’s National Council

AEI is deeply grateful for the leadership of our National Council. Its members are leaders in business and philanthropy who have publicly committed to the mission and success of the Institute. They are ambassadors for AEI, providing insight and strategic advice as we enhance our scholarly programs and build out our commu- nity of investors. Please contact Toby Stock, managing director of development (202.862.5834; [email protected]), if you have any questions about the AEI National Council.

BILL ACHTMEYER ALTHEA DAVIDSON C. BOYDEN GRAY Chairman and Managing Partner Founding Partner The Parthenon Group ANTHONY J. DE NICOLA Boyden Gray & Associates Co-President JAY ADAIR Welsh, Carson, Anderson, & Stowe JOYCE AND JUDSON GREEN

ERWIN AULIS KIMBERLY O. DENNIS MARTIN J. GROSS President President and Founder JOHN D. BAKER Searle Freedom Trust Sandalwood Associates Inc. THILO BEST Principal JAMES H. DONOVAN HEATHER AND PAUL G. HAAGA Bayshore Retirement Partners Managing Director Goldman Sachs KIP HAGOPIAN BAYARD BOYLE JR. STEVEN T. HALVERSON Chairman ROBERT A. ECKERT Boyle Investment Group Mattel Inc. JON D. HAMMES Hammes Company CURTIS F. BRADBURY JR. LEWIS M. EISENBERG Chief Operating Officer Kohlberg Kravis Roberts YVONNE S. AND KENNETH H. Stephens HANNAN MARTIN C. ELTRICH Colonial Navigation Co. Inc. MELISSA AND GEOFFREY Partner BRADSHAW-MACK AEA Investors DAVID G. HERRO

ANGELA AND DOUGLAS BRALY CHRISITAN A. FELIPE THOMAS HILLMAN The Braly Group LLC WILLIAM A. FICKLING JR. HELEN AND ED HINTZ KEN BROAD Mulberry Street Investment Hintz Capital Management Company LP MARK CARLIN JANET A. AND Executive Vice President SEAN M. FIELER ROBERT B. HOFFMAN Lockton Insurance Brokers Inc. General Partner Double V Trust Funds Equinox Partners LP JAMES D. CARREKER JOHN W. HOLMAN III JDC Holdings SPENCER C. FLEISCHER Managing Director RUSSELL L. CARSON EDWARD FORST Eagle Capital Management LLC General Partner President and Chief Executive Officer Welsh, Carson, Anderson & Stowe Cushman & Wakefield, Inc KATHY AND AL HUBBARD

ROBERT H. CASTELLINI MICHAEL J. FOURTICQ SR. STANLEY S. HUBBARD Chairman Hancock Park Associates Chairman and Chief Executive Officer Castellini Company Hubbard Broadcasting Inc. ELIZABETH AND TROY FOWLER JOHN K. CASTLE Board of Directors SUSAN AND TOD HULLIN Chairman and Chief Executive Officer Triad Foundation Castle Harlan Inc. JOHN K. HURLEY Managing Partner MARILYN AND SAM FOX NANCY AND GARY CHARTRAND Cavalry Asset Management Founder Harbour Group MARY AND ARMEANE CHOKSI PAUL J. ISAAC Arbiter Partners JOHANNA AND ARTHUR CINADER STELLA AND JOEL FREEDMAN RICHARD M. JAFFEE PETER B. CLARK MARIA AND BRENT FREI MARTIN COHEN JOSH FRIEDMAN SHELLY AND MICHAEL KASSEN Executive Chairman RICHARD A. KAYNE Cohen & Steers MARTIN GARCIA Chief Executive Officer JOHN CONNORS JOHN S. GATES JR. Kayne Anderson Capital Advisors Inc. Partner Ignition Partners MARK D. GIBSON MICHAEL L. KEISER Executive Managing Director Cofounder JOE CRAFT AND KELLY KNIGHT HFF LP Recycled Paper Greetings Inc

SUSAN CROWN AND WILLIAM KUNKLER RONALD J. GIDWITZ RANDY P. KENDRICK Principal F. JOSEPH DAUGHERTY, MD GCG Partners JOHN KINGSTON YVETTE AND LOU KLOBUCHAR CARRIE AND JOHN MORGRIDGE PETER S. RUMMELL Morgridge Foundation Chief Executive Officer DAVID H. KOCH Rummell Company LLC SUE KOFFEL MARY AND ROBERT MURLEY NATHAN E. SAINT-AMAND, MD J. CHRISTOPHER KOJIMA ALEX NAVAB Managing Director Kohlberg Kravis Roberts MUNEER SATTER Goldman, Sachs & Co. Founder CHARLENE AND PATRICK K. NEAL Satter Investment Management LLC AMY KORENVAES Neal Communities President Harlan and Amy Korenvaes JUNE AND PAUL SCHORR Family Foundation ROBERT H. NIEHAUS GCP Capital Partners LLC JAMES M. SENEFF HARLAN B. KORENVAES Executive Chairman Korenvaes Capital Management PETER NOLAN CNL Financial Group, Inc.

KARIN AND JOHN KUKRAL DAN O’KEEFE ROGER T. SERVISON Fidelity Investments KEN LANGONE RICHARD R. ONG BILL LAVERACK Managing Director JEFFREY L. SILVERMAN Laverack Capital Partners Eagle Capital Management LLC Chairman and Cofounder Agman Partners HOWARD H. LEACH KELLIE AND DAN PETERS President Lovett & Ruth Peters Foundation SCOTT SIPPRELLE Leach Capital LLC Westland Ventures SYLVIE LÉGÈRE AND TODD RICKETTS STEVEN PRICE Chairman and Chief Executive Officer HARRY SLOAN ROY W. LENNOX Townsquare Media Inc. Chairman and Chief Executive Officer Founder Global Eagle Acquisition Company Arrowhawk Capital Partners MAYARI PRITZKER President TAD SMITH RICHARD H. LENNY Robert and Mayari Pritzker LINDA AND BILL STAVROPOULOS Family Foundation ALEC LITOWITZ ROBERT K. STEEL ANDY PUZDER DANIEL S. LOEB SHELDON M. STONE Chief Executive Officer KELLI AND ALLEN QUESTROM Third Point LLC SUSAN AND DONALD STURM JAMES C. RAHN Sturm Financial Group D. SCOTT LUTTRELL President Chairman and Chief Executive Officer Kern Family Foundation MICHAEL SULLIVAN LCM Group Inc. Point72 Asset Management ANNE AND ROB RAYMOND BARRY L. MACLEAN President and Chief Executive Officer GENE SYKES MacLean-Fogg Company GEOFFREY S. REHNERT Co-Chief Executive Officer ROB TAYLOR MICHAEL E. MARTINO Audax Group Cofounder RYAN TAYLOR Mason Capital Management DAVID K. REYES CARL THOMA IVOR MASSEY JR. M. JUDE REYES Managing Partner Triad LC Thoma Bravo LLC J. JOE RICKETTS M. HOLT MASSEY DICK UIHLEIN RICHARD J. RIORDAN ROBERT MCCORMACK CEO Uline DAVID N. ROBERTS HARRY T. MCMAHON Executive Vice Chairman Senior Managing Director CAROL AND JOHN WALTER Bank of America Merrill Lynch Angelo, Gordon, & Co. HEATHER AND RAY WASHBURNE LINDA MCMAHON THOMAS S. ROBERTS Charter Holdings Principal and Former CEO, Managing Director World Wrestling Entertainment Summit Partners BUD WATTS JOANIE AND DON MCNAMARA RICHARD K. ROEDER GARY L. WILSON KENNETH B. MEHLMAN Partner Manhattan Pacific Partners Member and Global Head Vance Street Capital LLC of Public Affairs JEFF WYLER Kohlberg Kravis Roberts ROBERT ROSENKRANZ Chief Executive Officer Jeff Wyler Automotive Family DANIEL N. MEZZALINGUA Chairman Acquisitions Analyst Delphi Financial Group FTO SCOTT ZAJAC JEANNE M. AND JOHN W. ROWE GREG MILLER Larry H. & Gail Miller Family Foundation ROBERT ROWLING 2014 FINANCES

AEI’s unaudited financial performance for the 2014 Expenses for the year totaled $35.5 million— fiscal year ending on June 30 is provided in accor- 78 percent of these expenses were for programs, dance with GAAP accounting conventions. 12 percent for management and administration, The Institute raised $16.8 million from indiv- and 10 percent for fundraising. AEI allocates iduals, $13.9 million from foundations, and $7.6 communication expenses to programs; communi- million from corporations. The sum of these cation expenses are shown below prior to such fundraising activities, along with conference and allocation. miscellaneous revenue of $2.5 million, brought AEI's commitment to freedom, opportunity, the Institute’s annual operating revenues to $40.8 and free enterprise is shared by our community of million. Investment gains totaling $19.7 million donors. We are immensely grateful for their sup- and Capital Campaign commitments totaling port of our public policy research and innovative $19.5 million are excluded from the operating outreach initiatives. AEI’s work is made possible revenue shown below. entirely by their generous investments.

2014 AEI Operating Revenue 2014 AEI Expenses ($40.8 million) ($35.5 million)

Foundations Management Economic Policy Studies 34% 4% 19% Administration 8%

Fundraising Social and Political Studies Corporations Individuals 10% 17% 19% 41% Campus Outreach 6% Conferences and Conferences Other Revenue 7% Foreign and Defense 6% Communications Policy Studies 14% 15%

Fiscal year activity is for the period July 1, 2013, through June 30, 2014.

28 AEI Annual Report

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Photography by Aaron Clamage, Peter Holden, Patrick G. Ryan, and Jay Westcott.