If public funds are not enough and industry is failing to make the necessary effort, why not turn to philanthropists, foundations and charity organisations? These are particularly active in education and culture and represent under-exploited potential in a large part of the European Research Area. What is more, they are not to be judged solely by the funds at their disposal, but also by the value they can add. A report commissioned by the European Commission and the conference that followed in the spring of 2006 took a look at the role of foundations and the new environment – administrative, fiscal and legislative – they need to give a boost to European research.
Under a blue June sky, 9 000 women gathered in central London, ready for the start of the 5km run – women of all ages, colour and social classes. Some ran while others strolled at a more leisurely pace, but they were all there for the same reason: to sponsor Cancer Research UK, one of Europe’s leading charity organisations. This is just one of the Races for Life which the foundation organises regularly. This year, it hopes to raise £46 million (approximately €67 million). The charity organises many events – from candlelit dinners to trekking in Patagonia or in Rajasthan, as well as a 10-day walk along the Great Wall of China – which raise funds for British university laboratories engaged in cancer research. Its shops sell watches, soap, candles and postcards. Its mobile units stop off at destinations throughout the UK to invite people to participate in a Take Five action and devote five precious minutes of their time to finding out a little more about cancer. The volunteers are very often people who have either suffered from cancer themselves or seen close friends or relatives hit by the disease.
Cancer Research UK is just one example of these private bodies dedicated to the public good. Foundations are defined as self-governing bodies possessing assets – and sometimes very considerable assets – with which they fund, without profit, actions of benefit to society in the sectors of health, social well-being, culture and research. Long a feature of Anglo-Saxon society, they are now playing an increasingly active role in many European countries. They owe their dynamism to an evident necessity: trimmed state budgets are finding it hard to fund certain public-interest activities. Individual, community or entrepreneurial initiatives are a means of ensuring continuity and development. In addition to this, they are symptomatic of a change in society: citizens feel concerned by the common good but like to choose the actions they support.
Limited focus on research In 2001, the European Foundation Centre (EFC) (1) recorded 62 000 foundations in the then 15 EU Member States. They varied in terms of organisation, management, legal status, fiscal status and role. They were also unequally distributed geographically. The average was 16 foundations for 100 000 inhabitants (EU-15), but for Denmark the figure rose to 260 and in Ireland it was less than one. Their numbers had increased considerably over the preceding decade and just over a quarter of Belgian, Finnish and French foundations had been set up between 1991 and 2001. In Germany, over 40% had been founded during the previous decade and in Italy 50% of them since 1999.
Science and technology are rarely among their primary objectives. “With some notable exceptions, the level of funds allocated to research by foundations in Europe remains low, compared with allocations from government and industry and in comparison with the funds granted by their US counterparts.(2) This is despite the presence of some major research foundations in Europe and a number of new national initiatives in this field,” note the authors of the report Giving More for Research in Europe, published in September 2005 (see box).
Whereas US foundations operate principally via a wide range of research grants, Europeans like to combine different types of support. This can range from the provision of capital for scientific or technological equipment or installations to aid for targeted projects or programmes, and includes anything that advances knowledge (support for conferences, seminars, training of researchers, grants, university chairs, pilot projects, clinical trials, etc.).
In supplementing public funds and industrial resources, foundations can also play a very important role in supporting certain fundamental research, including ‘orphan’ fields, such as rare diseases, applied research in the start-up phase, risk projects, etc. But in reality this diversity is relatively rare. Philanthropy is the work of a handful of major donors targeting a very small number of fields, principally medical research, and most of their money goes to universities.
The right atmosphere The advantage of foundations is that they provide a more rapid and flexible response than public research which is subject to increasingly rigid procedures. In addition, their intervention can act as a trigger and a catalyst, serving to launch projects to which others have already pledged support. But there is more to support than just funding. The report’s authors note that “the unique competences and characteristics” of the foundations give them a qualitative value. They can contribute to the pluralism of research and development funding.
These experts also suggest that, as part of a European approach, foundations working in wider fields could support cross-border projects, multidisciplinary research and the mobility of researchers, also envisaging structures that would help small projects and provide a strategy for research financing in the longer term. In particular, their independence from governments and industry gives them a credibility that encourages public support.
But to achieve tangible results, foundations and philanthropic organisations require a favourable environment. All Member States grant them a favourable tax status, but they are far from having a common approach in terms of the definition of the fields of application, the nature of the benefits and the criteria for awarding them. This European ‘patchwork’ means, in practice, that many organisations are confined to local, regional or national action, and it acts as a brake on international action. Therefore, raising the issue in the context of the European Research Area could not be more pertinent.
(1) An association whose purpose is to promote the work of foundations and charity organisations, in Europe and beyond. (2) In the United States – with its well-known philanthropic traditions and administrative and fiscal flexibility – ‘private’ support was €13 billion, or 4.5% of total US investment in research in 2003.
From Nobel to Volkswagen
A traditional and common form of foundations with a philanthropic purpose are those that originate in an endowment from an individual or family. In the field of science, the most well known are the Nobel Foundation in Sweden (which rewards major researchers directly), the Wellcome Trust (UK) – ...
What to do in the EU?
The report Giving more for research in Europe (1) was requested by the European Commission from the expert group set up as part of the ‘3% action plan’ (2). In addition to a description of the European foundation ‘landscape’, this gives recommendations aimed ...
A traditional and common form of foundations with a philanthropic purpose are those that originate in an endowment from an individual or family. In the field of science, the most well known are the Nobel Foundation in Sweden (which rewards major researchers directly), the Wellcome Trust (UK) – the European number one in terms of assets (about €10 billion) and annual expenditure (over €300 million) and also world leader in the medical field – and the Institut Pasteur (FR) which uses its funds to operate its own projects and programmes.
Next come the community foundations that raise funds from all quarters, from individuals as well as public bodies. These are found particularly in Germany and the United Kingdom and are increasing in Central and Eastern Europe. In 2004, for example, Cancer Research UK (see article) was able to grant £75 million sterling to cancer research at British universities.
Corporate foundations rank third in order of importance. Examples of these are two well-known Germany companies: the Robert Bosch Stiftung and the Volkswagenstiftung. These foundations are often active outside their own sector of activity and support researchers whose work has no connection with their own field of production.
What to do in the EU?
The report Giving more for research in Europe (1) was requested by the European Commission from the expert group set up as part of the ‘3% action plan’ (2). In addition to a description of the European foundation ‘landscape’, this gives recommendations aimed at creating incentives and removing obstacles to the action of these organisations, of those who donate to them and of their partners, with the aim of lending a new dynamic to investments in European research.
The recommendations formulated concern governments and European institutions, industry and universities, but also the general public who in many cases play a vital role as donors. Industry in particular, which plays a major role in funding research, could be more active as a donor, either by creating foundations or promoting initiatives that combine public and private funds – for precompetitive research, for example. New foundations could also encourage this ‘philanthropic risk capital’, and the creation of targeted corporate foundations could be encouraged. The authors also suggest looking at the possibility of setting up university foundations.
Finally, to make it easier for foundations to acquire a European dimension, there is a need to improve the fiscal and regulatory conditions for cross-border donations, in particular by making them tax deductible or granting significant tax credits – an incentive that is not yet used in many countries.
The report also includes a number of more general observations concerning:
- Visibility and information about foundations (financial records, activities, awareness of their role, fund-raising campaigns, etc.) - The mechanisms permitting the leveraging of funds for research - The most effective measures and regulations in the field of financing - The creation of a European forum of research foundations to permit the sharing of experiences and good practices that would facilitate cooperation and synergy between organisations.
The last idea, which the European Foundation Centre favours strongly, was on the agenda at the conference Giving More for Research in Europe (Brussels, March 2006), at which the options recommended in the report were discussed in some depth.
(1) Sub-title: The role of foundations and the non-profit sector in boosting R&D investment. (2) To achieve the target set by the European Council in Barcelona (2004) of an average global investment of 3% of the EU’s GDP allocated to public and private research.