The Future of Philanthropic Support for Research

Private philanthropy provides venture capital that is essential to the progress of medical research. Although they are heterogeneous and the support they provide is small in comparison to governmental and industrial support, philanthropic foundations fill a crucial, catalytic niche in medical research, and their involvement in this area should be extended. Foundations and the scientific community should pursue policies augmenting private contributions, and they should educate potential donors about the nature of medical research, about the value of philanthropic dollars, and about ways to leverage such support. Total philanthropic giving for 1997 came to $143.46 billion, with $121.89 billion from individuals and bequests, $13.37 billion from noncorporate foundations, and $8.2 billion from corporate foundations. Just over $14 billion, or 8.8 percent of total contributions received by charities, was in the health category. This segment included support of health services and health facilities, such as hospitals and nursing homes; support of organizations addressing general health or specific diseases; and a small portion of support for medical research. Grantmaking foundations contributed $19.46 billion to nonprofit organizations in 1998, representing a 22 percent increase over 1997. This explosive growth was fueled by the prolonged bull market and the near-record levels of gifts and bequests from donors ($15.8 billion in 1998), as well as by the formation of new grantmaking organizations. Since 1980 the number of foundations has doubled to 44,000. Foundations currently spend 16.2 percent of total grant dollars, or $1.2 billion, on health. The largest share of health giving, 58 percent, goes to general and rehabilitative services, including hospitals and medical care; reproductive health; public health; health policy; and management. Only about $265 million, or 22 percent of the health portion, goes to medical research. In contrast, government support for medical research was about $15 billion, and industry support was $18 billion. Philanthropic organizations are a diverse group, including not only corporate and private foundations but also voluntary health organizations and medical research organizations. Conversion health foundations have emerged from the sale of nonprofit hospitals and private insurers. Most of the programs conducted by these organizations are small, less than $1 million per organization per year, according to a survey of 118 funders conducted by the Pew Charitable Trusts, the Burroughs Wellcome Fund, the American Cancer Society, and the Howard Hughes Medical Institute. Support for postdoctoral researchers and beginning investigators is especially popular. Graduate training in biomedical and health-related research also is supported. Voluntary organizations target educational programs for patients and health professionals. Foundations and medical research organizations emphasize K-12 and undergraduate life science education. Individual giving amounted to $121.89 billion in 1997. Given that about $12 billion more dollars per year could be obtained if 10 percent of these individuals were encouraged to contribute to medical research, an institutional mechanism might be established to provide a "home" and administrative structure to manage and direct such funds. The Burroughs Wellcome Fund has supported the Institute for Science Philanthropy as such a tool, and both the National Institutes of Health and the U.S. Centers for Disease Control and Prevention have successfully established foundations that could be conduits for such funds. Community foundations, which derive their support from many donors and target their grantmaking within their communities, are likely to benefit most from increased donor support over the next several years, when a large intergenerational transfer of wealth is expected. However, few community foundations give grants for medical research, nor are they viewed as having expertise in this area. The Burroughs Wellcome Fund has established a new investigator award program at its local Triangle Community Foundation as a model for community-based support. Conversion foundations, established as nonprofit health institutions when hospitals or insurers convert to profit-making organizations, offer another potential source of health research support. In 1997, there were 81 conversion foundations in 30 states and the District of Columbia, and nine more were in the process of forming. If these foundations donated 5 percent of their assets every year, as private foundations are required to do by the federal Internal Revenue Service, they would contribute $465 million annually for charitable purposes. Although surveys indicate that 67 percent of the conversion foundations are dedicated exclusively to "health and health care," targeted support for medical and health research is actually quite limited. These foundations might direct a larger portion of their grants, perhaps 5 percent to 25 percent, to research yielding better approaches to care for their target populations. The strengths of private funders in supporting health research include their ability to: * Move quickly to fill a gap. * Function as neutral conveners for identification of priorities. * Model successful approaches. * Disseminate approaches that work. * Take risks that may have high payoffs. Limitations of private funders include: * Limited funds to commit to research. * Less willingness to support overhead or infrastructure. * Desire to model and then move on, rather than to provide long-term sustained support. * Tendency to carry out their own programs instead of working collaboratively. In the current health research environment, funders will have to partner and work more collaboratively because of the expense of research. Some of the opportunities for action by foundations include: * New paradigms for training physicians and Ph.D.s to respond to changes in the environment within managed care organizations, industry, and academic health centers. * Emerging fields and interdisciplinary research (such as genomics and neuroscience), interfaces in science (such as between mathematics and biology or between physics and biology), and biomedical ethics. * "Risky" or politically unpopular research, such as that in reproductive biology and health, substance abuse, international health and disease, and social/behavioral issues. * Translational clinical research that speeds results from the research bench to the bedside and to other clinical research areas, including patient-oriented research, epidemiologic and behavioral studies, and outcomes and health services research. * Behavioral research, which is essential for preventing and treating disease. * Public understanding of science to help children and adults grasp its importance. * New partnerships among academic health centers, industry, and managed care organizations through private-sector initiatives related to medical research. Charitable dollars for medical research, though modest, should be viewed as essential "risk capital" for new ideas and new models. To capture more dollars from private philanthropy, the scientific community must make a stronger case for the relevance of medical research; underscore the critical, catalytic role that even such modest support plays; and support policies that foster charitable contributions. Members of the scientific community should work more closely with advocacy organizations, such as Research!America and Funding First; with their professional societies, such as the American Association for the Advancement of Science and the Federation of American Societies for Experimental Biology; with their universities and academic medical centers; and with their honorary institutions, such as the National Academy of Sciences and the Institute of Medicine, to make a concerted case for greater philanthropic support of medical research. Enriqueta C. Bond, Ph.D., is president; Martha G. Peck is vice president; and Melanie B. Scott is database and programs specialist with the Burroughs Wellcome Fund, an independent private foundation established to advance the medical sciences by supporting research and other scientific and educational activities. BWF, which in November will move into its new headquarters building in Research Triangle Park, N.C., currently is located at 1 Copley Parkway, Suite 200, Morrisville, NC 27560-9693.

The Future of Philanthropic Support for Research

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Enriqueta Bond

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October 1999

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