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The Chair's corner: Private research funding in Europe – the EUFORI Study

05 Feb 2016 15:11 | Olaf Svenningsen (Administrator)

My second blog post is an abbreviated version of a piece in EARMA's newsletter about the EUFORI Study:

Did you know that private foundations in Europe spend a minimum of EUR 5 billion on R&I annually? This is a conservative estimate, and the real number is most certainly larger. Over a period of 7 years, private foundations will thus spend at least EUR 35 billion, i.e. more than half of the Horizon 2020 R&I expenditure.

The EUFORI Study is the first report to give an overview over research activities of private foundations in 29 European countries: 27 EU countries as well as Norway and Switzerland. Out of almost 13,000 foundations that were approached, 1,591 were included the study. The report—that can be downloaded for free from this web page—consists of one main synthesis report, and 29 accompanying country reports, altogether 1,277 information-rich pages guaranteed to keep you occupied for a very long time, if you endeavor to read them all.

The EUFORI report is a unique source of insight for anyone working with—or interested in—research funding and research policy.

Private foundations are interesting for research managers and administrators because, unlike public funders, foundations are often free to set their own rules, and tend to be less bureaucratic than e.g. the EU Commission or many national funders—or at least that is often the intention. 

Large private foundations can also play important roles as drivers of change in research policy. For example, the Knut & Alice Wallenberg Foundation (KAW), Sweden’s biggest private research-funding foundation, initiated and funded the process to adopt a full-cost model for the recovery of indirect costs in Sweden. Without the support of KAW, the full-cost reform would have been much more difficult—or impossible—to realize. As the EUFORI Study points out, one of the characteristics of private research funding is that foundations prefer to only fund “direct support of research”, and tend to be reluctant to cover indirect costs (overhead).

The EUFORI study report is a cornucopia of interesting facts that can be useful, important, or just interesting. There are plenty of facts for the statistics enthusiast, and these facts tell a story, which has never before been supported by facts and data. It may not come as a surprise that Europe has developed a large, heterogeneous and also fragmented private foundation sector, but did you know that:

  • The number of public benefit foundations in Europe is unknown, but estimated at c. 110,000.
  • The estimated assets of 1,052 of the biggest foundation amounts to EUR 127 billion in 2012.
  • 90% of the foundations expenditure is at a national or regional level, mostly due to limitations in their statutes; the European or international dimension is still subordinate.
  • Medical and health sciences are by far the most popular research area amongst European foundations. 44% of the foundations, and 63% of the expenditure of the EUFORI foundations are directed towards the health sciences.
  • 61% of the EUFORI foundations support research only and a surprisingly low 6% supports innovation only, the remaining foundations supporting both. Other purposes than R&I are quite common.
  • 83% of the foundations focus on applied research, while 61% support basic research (there is obviously some overlap here). Interestingly, the distribution of expenditure is evenly distributed between basic and applied research.
  • 47% of the foundations reported to be grant making only, while 41% claimed to only carry out operating activities. Curiously, this appears to be geographically determined: 85% of Scandinavian foundations are grant making, while 80% of the foundations in the Mediterranean are of the operating type.
  • The biggest of them all is the British Wellcome Trust, responsible for 44% of the research expenditure in the UK. If Wellcome had been a country, it would rank as the second biggest in Europe in terms of research funding(!).
  • Similarly, the Calouste Gulbenkian Foundation in Portugal is responsible for 50% of the country’s foundation expenditure on research, and is both grant making, and operating its own research.
  • In contrast with most public funders, but maybe not surprising, private foundations primarily support individuals, not institutions.

The list could be made very much longer than this, and the themes are clearly relevant also for those not primarily working with private foundations. Four countries top the list of highest expenditure on research by private foundations: the UK, Germany, Denmark, and Sweden, followed closely by Belgium, Norway, and Spain. These are also countries with comparatively old, and well-established foundations. Denmark tops the list in terms of private research expenditure per capita.

Something that attracted my particular interest is the UK’s Association of Medical Research Charities (AMRC), representing charities working in research, development and patient information. Although membership is voluntary, the AMRC plays a fundamental role by setting the standards for the infrastructure regarding e.g. best practice in proposal review, ethics clearance, clinical trials, access to open data, and other issues that we recognize from the public sector. In fact, AMRC also operates at a European level and reading the UK EUFORI country report made me curious to know more about this organization—maybe they should be invited to a DARMA event?

In this short review, it is not possible to give more than a small sample of all the interesting material that makes the EUFORI Study so interesting for research managers and administrators. As pointed out in the EUFORI Synthesis Report, the importance of private research funding is growing, and can expected to become increasingly more relevant. This might be particularly true for Denmark, considering the bleak financial future facing higher education and research in this country.

Link to the EUFORI Study portal: http://euforistudy.eu

Link to the EUFORI Study download page: http://euforistudy.eu/results/

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