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Foundations as a Source of Research Funds

Foundations as a Source of Research Funds. Steven A. Schroeder, MD March 8, 2013. Background. Foundations have a lot of money $45.7 billion given in 2010 They are much more heterogeneous than NIH

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Foundations as a Source of Research Funds

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  1. Foundations as a Source of Research Funds Steven A. Schroeder, MD March 8, 2013

  2. Background • Foundationshave a lot of money • $45.7 billion given in 2010 • They are much more heterogeneous than NIH • I served as President and CEO for one foundation, Robert Wood Johnson, between 1990 and 2012 • Need to understand foundations in order to enhance chances of getting funding from them; their procedures are not standardized

  3. Foundations Are Uniquely American • Less role for government • Opportunity to create great wealth • Larger role of private associations

  4. My Personal Experiences with Foundations • RWJF • Chaired American Legacy Foundation board • Currently sit on two other large foundation boards, plus small Schroeder family foundation • Past and current support from multiple foundations

  5. Foundation Governance • Self-perpetuating boards • Issue of family members • Issue of founder (“dead hand”) • First vs. subsequent generations of trustees • The mission

  6. Foundation Options • Private or corporate • National or local • Breadth vs. depth • Linkage to source of wealth or to fundraising for a cause • Political slant

  7. Foundation Finances • 5% minimal payout • 3 ½ % minimal for operating foundations (e.g., Howard Hughes) • Perpetuity or spend-down? • Disease oriented foundations less dependent on endowments, more on annual fundraising

  8. Big 5 Foundations* 1. Gates--$31 billion (plus Buffet’s $28 b) • Howard Hughes--$18 b • Ford--10.2 b • Getty--$9 b • RWJF--$9 b (Packard fell from $17b to $3b; now back to about $6 b) *Estimated 2011 worth, but note lag time and market volatility

  9. Foundation Tactics When Markets Fall • Most foundations’ assets fell 25-40% during recent recession, depending on risk allocation • Some actively downsized staff (Ford & RWJF) • Payout formula smoothes bumps, so that decrements (and increases) lag the market • Tendency to stay with established grantees and programs • Reluctance to enter new areas

  10. Motivations to Form Foundations • Give back • Protect the stock • Avoid estate taxes • Shield heirs from excess wealth • Conversion of public entities to for-profit • Legal arrangements (e.g., MSA) • Advocacy organizations (e.g.,cystic fibrosis)

  11. Disease-Oriented Foundations • Often started by individuals—many wealthy—whose lives were touched by a specific illness • Often linked to a public figure • Often do aggressive fund raising, such as the Jimmy Fund • Often use peer review panels to select grantees • Often, but not always, support research

  12. Principles of Effective Philanthropy • Fidelity to mission • Take on important problems • Make a difference • Don’t duplicate work of others

  13. Principles of Philanthropy (2) • Leverage leadership position • Measure impact • Learn from experience

  14. Training Research Policy analysis Community demonstrations Communications Polling Commissions Support advocacy Evaluation Sample Interventions

  15. Criticisms of Private Foundations • No accountability • Violate donor intent • Arrogance • Don’t spend enough • Perks too lavish • Too risk-averse • Old boy funding patterns

  16. Foundations Can Take Risks That Government Can Not • Tobacco • Alcohol • HIV/AIDS—needle exchange, condom use • Gun violence • Reproductive issues • Stem cell research • Can be less orthodox than NIH

  17. Sample List of Health-Oriented Foundations • California Wellness • California Endowment • California Health Care • Kellogg • Gates • Multiple disease oriented foundations

  18. Sample List of Health-Oriented Foundations (2) • Soros • Commonwealth • Kaiser • Hartford • Grant • Pharma—SCLC example with Pfizer

  19. Guidelines for Approaching Foundations • Know their priorities and procedures • Tailor your proposal accordingly • No pink sheets or political accountability • Introductions from senior leaders help • Connections to foundation staff help • Keep trying!

  20. Three Foundation Resources • The Foundation Center www.fdncenter.org • Council on Foundations www.cof.org • Grantmakers in Health www.gif.org

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