By: Professor Pankaj Sah | Director of Queensland Brain Institute at The University of Queensland
In May this year, Andrew ‘Twiggy' Forrest, along with wife Nicola, pledged $400m of their personal wealth to Australian research organisations and charities – the biggest single gift of philanthropy by a living person in the country. In the same week, the Brazil family in Queensland, also admired for their generosity, quietly donated $5 million to support research at the Queensland Brain Institute at The University of Queensland. These extraordinary acts demonstrate a dramatic shift in Australia’s philanthropic climate. More importantly, they will have a tremendous impact on science, as philanthropists play a vital role in supporting early stage, basic research, complementary to other funding sources.
A range of bodies contribute to how the world’s science is funded, and importantly, not every source is equal.
Industry R&D, which comprises the majority of funding in most countries, focuses on applied research aimed at product development, securing a competitive advantage, and helping to generate revenue.
Government funding is generally more focused on basic research, although the balance between basic and applied depends on what the politicians of the time deem important. In Australia, the major schemes provide 3–5 years of funding. This time frame is relatively short compared to that of scientific discovery, which has implications for the type of research that gets funded.
Finally, the contribution of philanthropy is small in monetary terms compared to business and government, but because philanthropists aren’t tied to deliverables and outcomes in the same way CEOs and politicians are, philanthropic contributions can have a disproportionately large influence on science, as discussed below.
Although both government and private individuals tend to support basic science, philanthropy is NOT a substitute for government-funded research. Rather, the two are complementary.
Government granting schemes tend to favour projects that have a high likelihood of success, supporting established researchers engaged in can’t-fail research. This sounds reasonable, but the result is researchers who are incentivised to pursue the low-hanging fruit on the research tree.
By contrast, philanthropists have the freedom, and often the desire, to support high risk-high reward programs of research. One approach, for those with particularly deep pockets, is to fund entire centres or initiatives, as done by Mark Zuckerberg (infectious disease), Sean Parker (cancer immunotherapy), and tech billionaires from Oracle, Google and Paypal (ageing). If successful, these high risk-high reward projects will generate immense payoffs.
But there is an equally important alternative, suitable for those who aren’t mega-billionaires, whereby an injection of philanthropic funds helps to secure government money down the track. This can be useful in two ways.
First, because government money tends to flow towards safe bets, researchers must write grants that provide extensive and convincing preliminary evidence that their project will succeed. If a researcher has an out-of-the-box, embryonic stage idea that requires a few years of tinkering to get off the ground, obtaining support can be difficult. Philanthropy can help by providing a funding kick-start that enables promising preliminary results to be gathered, as needed for government backing.
Second, philanthropic commitments can be used to leverage support from government and even business. In this way philanthropy can provide the impetus not just for a specific project, but even for an entire research centre or initiative.
Both of these contributions are vital for Science, and philanthropy – with its long time horizon, nimble distribution of funds, and with no imperative to report to voters or shareholders – is uniquely placed to address them.
As reflected by the examples given so far, the United States leads the world in philanthropic giving, with a list of the world’s wealthiest charitable organisations dominated by US entries.
Australia’s giving, by contrast, is significantly less than the US on a per GDP basis, with a substantial difference in what high net worth individuals give. Accordingly, large gifts to help establish or sustain scientific research centres are less common. One example comes from my own institute, where in 2013, a donation of $2M from the Clem Jones estate helped establish a centre for ageing dementia research (CJCADR).
Gifts like this play important roles. In the case of CJCADR, the freedom to pursue slightly unconventional research allowed us to initiate and progress a project on ultrasound treatment for Alzheimer’s disease. After studies in animal models showed promise, we have been able to fast-track collaborations with industry partners as we look to develop a portable device. Exciting work like this, which is producing tantalising results, would never have happened without the generosity and foresight of early-stage philanthropists.
Smaller gifts have also been important. As explained in these testimonials, philanthropy can offer young researchers a leg up in their search for academic security. The importance of supporting young researchers has been discussed elsewhere, and philanthropy is positioned to fill a need that is unmet by many current government schemes.
Philanthropic donations play an indispensable role in supporting early-stage, basic research, often being a catalyst for the establishment of major research centres and initiatives. The contribution of philanthropy is unique, complementary to other funding sources, and incredibly valuable for scientific research. Unfortunately, Australia’s philanthropic culture significantly lags that of the US, with giving from high net worth individuals notably deficient.
Improving this situation requires a change of culture, something that can be difficult to achieve. This is why the decision of Fortescue Metals Group founder Andrew Forrest to donate some of his fortune is so valuable. Another less prominent example, though still newsworthy, has been the commitment of Atlassian co-founders, Mike Cannon-Brookes and Scott Farquhar, to give 1% of the company’s time, profits and products to charity, effective now. The prominent profiles of these business leaders increases the visibility and awareness of philanthropy among potential donors. With research showing that looking good in the eyes of others is a significant motivating factor for many philanthropists, the publicity and positive community and political reactions earned may help shift philanthropic sentiment among the country’s business elite.
For science philanthropy more specifically, the must be driven home. Equally importantly, philanthropists must be aware of the numerous ways that their generosity addresses unmet needs – supporting young researchers; backing early stage, high risk-high reward projects; and as seed funding to secure government support for larger initiatives and research centres. They must be aware that these niches are not catered for by government or business spending, yet can have outsized impact on health, wellbeing and society.
Dr Gerhard Leinenga, pictured with a model of an ultrasound device that could be used to treat dementia.
Photo credit: Nick Valmas
Jul. 02, 2017
The Australian Government has announced a review of the Australian Charities and Not-for-profits Commission (ACNC) legislation.
Advocacy & Insight Manager, Krystian Seibert, outlines Philanthropy Australia's engagement with the review.
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