The organisation was founded at the high point of Tony Blair's modernisation of the Labour Party and struggled to attract funding, especially from the trades unions who had originally been expected to be the most sympathetic to its redistributionist platform.
Trades unions, concerned at further exclusion from power either by the electorate or the new Labour Party leadership, took a sharp turn away from too deep an association with the Left at this time and only begun in 2005 and 2006 to develop an increased if cautious interest in left-wing thought as a new generation of activist trades union leaders has emerged.[relevant?]
Former Deputy Labour Leader, Roy Hattersley, who was on the (centre-left) Labour Party's right-wing, but egalitarian, was an early supporter, as was John Edmonds, General Secretary of the GMB Union However, Catalyst was never a political or campaigning organisation and restricted itself to public policy work on redistribution and looking at soft areas like identity politics and public administration that were often neglected on the Left in favour of economics and social policy.
Its founding board of management included: Marjorie Thompson, Mark Seddon, Mike Watts, Nyta Mann, Pat Coyne, Tim Pendry, Hilary Wainwright, and Richard Stone.
It not only survived the modernisation period but re-emerged strengthened in later years with a new generation of academics and intellectuals prepared to develop alternative democratic socialist policies.