Study: Philanthropy may play an even bigger role in funding science than we thought

When it comes to funding science, the conventional wisdom has traditionally gone something like this: government agencies support large-scale research along well-established scientific paths, while smaller but more nimble philanthropic funding fuels early-stage research and riskier moonshots.

But a recent, larger-than-ever analysis aimed at generating a better understanding of scientific philanthropy suggests that this narrative is probably no longer accurate, if it ever was. In a new study made possible largely by electronic tax forms, a team of researchers at Northeastern University in Boston found that philanthropic funding for science may be much more significant than previously thought. In fact, adding up to about $30 billion a year, this may actually be on par with major segments of government funding.

We looked at the research paper Mapping Philanthropic Support for Science, is currently in preprint, and spoke with the lead author to get an overview of the team’s key findings and what they might mean for science philanthropy. Beyond the dollar amount, the study illuminates other notable patterns within science philanthropy that can provide useful insights for everyone involved—funders, grant seekers, even policymakers.

To reach its conclusions, the research team analyzed more than 3.6 million machine-readable IRS 990 tax forms for the decade between 2010 and 2019 from nearly 700,000 nonprofit organizations. They focused on information on more than 10 million grants awarded by foundations and other nonprofits, ultimately identifying about 70,000 science funders. In the later years of the decade, philanthropic funding reached about $30 billion a year—exceeding the annual funding of the National Science Foundation (NSF) and rivaling that of the National Institutes of Health (NIH). We have known for some time that the relative amount of federal funding for science is falling to that of private funding, including corporate support for applied science. But this study shows that the vital role of philanthropy as a source of science dollars—including for basic research—is hard to underestimate.

Although the details of federal funding are publicly available, philanthropic giving — coming from thousands and thousands of donors — is not as easily quantified, said Louis Schechtman, lead author of the paper. But Schechtman said the IRS’s computerized data set of tax forms could provide much more detailed data on philanthropic giving to science — and any other major philanthropic cause, for that matter.

“What we’re seeing is that the way philanthropists fund science is not the way governments fund science, and it’s not the way scientists typically think about how science is funded,” Shechtman said.

For example, one of the team’s key findings had to do with where the money goes. Most U.S. funders—including major science philanthropies like the Gates Foundation and the Gordon and Betty Moore Foundation—direct a disproportionate share of their science giving to destinations in their home states. The Gates Foundation, for example, gives 10 times more money to research institutions in Washington state than would be expected based on a random geographic pattern, according to the study.

Not surprisingly, and understandably, funders tend to place additional emphasis on their home communities. “We all understand why you’d support, say, a local art museum or other local institution instead of one far away,” Shechtman said. “But science is a national, international, big collaboration. We definitely want to raise the question: Does this [regional bias] the best way to fund science? There are pros and cons to it, but that’s the way it’s done right now.” This is a question worth asking yourself.

Another major takeaway from the study is the relative stability — one might say establishment — of scientific philanthropy. Compared to government grants, which usually come with a time limit, philanthropic funders tend to support the same researchers year after year after year. This has both potentially favorable and unfavorable consequences.

On the one hand, some valuable scientific research simply takes many years and requires stable, reliable sources of funding. Research program officers in philanthropy often talk about their longstanding partnerships with particular institutions and even specific scientists, citing their strategy of investing in the person rather than the research. And it proved successful: scientists supported by philanthropy made major breakthroughs and received Nobel Prizes. On the other hand, it is equally possible that a long-standing funding relationship can crowd out someone’s more deserving research and take up funding that could be better applied elsewhere. There is no single answer to the question, but again, this is a question funders should ask.

The study had several important limitations. For example, not every philanthropic donor used the electronic tax forms that the researchers deleted, so these grants simply went unaccounted for. The Northeast team also does not include grants from any government agency that can be said to fund science, such as the Department of Defense and the Department of Energy. So the dollar amounts are not exhaustive and can probably never be tallied exactly.

Shechtman is the first to admit that the survey is hardly the last word in the effort to fully understand the size and nature of scientific philanthropy. It’s more of a starting point — an effort to more accurately quantify the overall level of giving and where it’s going. With a clearer and more accurate picture, Shechtman said, everyone involved can make better decisions to manage the system more productively, including funders, policymakers and, of course, scientists themselves.

Although this study focuses specifically on scientific philanthropy, it highlights how much we still don’t know about nonprofit funding in general. Whether it’s due to deliberate opacity, or more often simply because there are so many philanthropic donors (and relatively few transparency and disclosure requirements), it’s difficult even for those of us who observe the field to get an accurate, up-to-date quantitative a sense of where grant dollars flow in science and elsewhere.

With that in mind, the Northeastern team’s study can be a starting point, but it can ask and answer the questions philanthropy needs to ask about supporting science—and help researchers seek grants more effectively. For example, Shechtman said, scientists accustomed to the traditional grant-writing and peer-review process used by government agencies might do well to engage more directly with philanthropy, building relationships with individual donors or foundation program staff. . With closer ties, researchers could more effectively convey the importance of work that might otherwise be unclear to non-specialists in the field.

“There’s so much money going around here, let’s first understand how it moves,” Shechtman said. “I think it’s hard to answer questions about which policy is better or which policy is worse until we have the data.”

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