Private Funding for Science – A Good Idea?

Money bags. WPClipart.

Two years ago Warren Buffett asked the community of the super-rich to make a “Giving Pledge”: to commit to donating half of their money to charity. His effort made headlines, and some fellow billionaires joined Buffett’s pledge, among others Bill Gates, George Lucas and Mark Zuckerberg.

The wealthy Europeans however have remained skeptic, for good reasons. Money brings influence – influence that can conflict with democratic decisions, a fact that Europeans seem to be more acutely aware of than Americans. The German Peter Krämer, who I guess counts as rich though not as super-rich, said about Buffett’s pledge:

“In a democratic nation, one cannot allow billionaires to decide as they please which way donations are used. It is the duty of the government, and thus in the end that of the citizens, to make the right decisions.” [Source]

Instead, Krämer argues that taxes should be raised for the upper class. Since nobody is listening to his wish of being taxed, he launched his own charitable project “Schools for Africa.”

The NYT last month raised the question “[C]an charity efficiently and fairly take the place of government in important areas? Or does the power of wealthy patrons let them set funding priorities in the face of government cutbacks?” In the replies, Chrystia Freeland from Thomson Reuters relates how a wealthy American philanthropist coined the term “self-tax” for charitable donations, and she brings the problem to the point:

“From the point of view of the person writing the check, the appeal of the self-tax is self-evident: you get to choose where your money goes and you get the kudos for contributing it.

But for society as a whole, the self-tax is dangerous. For one thing, someone needs to pay for a lot of unglamourous but essential services, like roads and bank regulation, which are rarely paid for by private charity.

Even more crucially, the self-tax is at odds with a fundamental democratic principle -- the idea that we raise money collectively and then, as a society, collectively choose how we will spend it.”

The same discussion must be had about private funding of science.

Basic research, with its dramatically high failure rate, is for the most part an “unglamorous” brain exercise whose purpose as well as appeal is difficult to communicate. Results can take centuries to even been recognized as results. The vast majority of researchers and research findings will not even make a footnote in the history of science. Basic research rarely makes sexy headlines. And if, it is because somebody misspelled hadron. All that makes it an essential, yet unlikely, target of private donations.

Even Jeffrey Sachs, after some trial and error, came around to realize that raw capitalism left to its own devices may fail people and societal goals. Basic investments like infrastructure, education, and basic research are tax-funded because they're in the category where the market works very badly, where pay-offs are too far into the future for tangible profits.

The solution to this shortcoming of capitalism cannot be to delegate decisions to the club of billionaires and hope they be wise and well-meaning. Money is not a good. It’s a virtual tool to direct investment of real resources: labor, energy, time. The central question is not whose money is it, but how resources are best put to use.

We previously discussed a specific type of private funding of science: crowdfunding. The problem with crowdfunding is that chances of funding depend primarily on the skilled presentation of a project, and not on its potential scientific relevance.

A recent article in Time Magazine “Crowdfunding a Cure” (subscription only) reported a trend from the United States in which online services allow patients and their relatives to raise money to pay for medical treatments, organ donations, or surgeries. One obvious problem with this approach is fraud. (If you think nobody would possibly want to fake cancer, think twice and read this.) What bothers me even more is the same issue as with the crowdfunding of science: You better be popular and good at social networking if you want to raise enough money for a new kidney. Last week’s issue of Time Magazine published a reader’s comment from Claes Molin, Sweden. This is how crowdfunding medical treatments looks from the Scandinavian perspective:

“It is moving to read about the altruism displayed by crowdfunding for medical procedures, and I don’t doubt the sincerity of the donors. But the steps described to raise money, including displaying personal details for strangers to see and remembering to say “thank you,” sound a lot like being forced to beg. I understand that values differ, but government-funded health care would let people keep their dignity, along with their peace of mind, in the face of life-threatening disease.”

A thesis project isn’t as serious as a life-threatening disease, but the root of the problem with crowdfunding either is the same. Crowdfunding is neither an efficient nor a fair way to distribute money, and thus the resources that follow. It is a simple way, a presently popular way, and a last hope resort for those who have been failed by their government. But researchers shouldn’t be forced to waste time on marketing like patients shouldn’t be forced to waste time on illustrating their sufferings, and in neither case should the success depend on the popularity of their presentation.

Be that as it may, crowdfunding is and will most likely remain a drop in the drying lake of science funding. I strongly doubt it has the potential to significantly change the direction of scientific research; there just isn’t enough money to go round in the crowd. Paying attention to private funding by wealthy individuals is much more pressing.

Wealthy donors often drive their own agenda. This bears a high risk that some parts of research, the “unglamorous” but essential parts, simply do not receive attention, and that researcher’s interests are systematically skewed to the disadvantage of scientific progress.

The German association of science foundations (“Deutscher Stifterverband für die Wissenschaft”) is, loosely speaking, a head organization for private donors to science that manages funds. (Note that the German use of the word “science” encompasses the natural and social sciences as well as the humanities and mathematics.)

I once spent a quite depressing hour browsing through the full list of in total 560 foundations that they have to date (this includes foundations exclusively for scholarships and prizes). 56 of them are listed under natural sciences and engineering. There isn’t a single one remotely related to quantum gravity or physics beyond the standard model. The two that come closest are the Andrejewski Foundation that hands out a total of EUR 9000 per year to invite lecturers on topics relating math and physics, and the Schmidt Foundation for basic research in the natural sciences in general, which however has an even smaller total funding. (Interestingly, their fund is distributed by the German Research Foundations and, so I assume, subject to the standard peer review.)

Then what do people donate to in the natural sciences? Most donors, it seems, donate to very specific topics that are closely related to their own interest. Applications of steel for example. Railroad development. The improvement of libraries at technical universities. The scientific cooperation between Hungary and Germany. And so on.

So much about the vision of the wealthy. To be fair however, the large foundations are not to be found in this list, they do their own management. And there exist indeed the occasional billionaires with an interest in basic research in physics, such as Kavli, Lazaridis, Tschira, Templeton. And, more recently, Yuri Milner with his sur-prizes.

If you work like me in a field that seems constantly underfunded, where you see several hundred applications for two-year positions and people uproot families every other year to stay in academia, you are of course grateful to anybody who eases financial pressures.

But what price is the scientific community paying?

Money sets incentives and affects researcher’s scientific interests by offering funding, jobs, or rewards. The recurring debate over the influence of the Templeton foundation touches on this tension. And what effect will Milner’s prizes have on the coming generation of scientists? We have a lot to lose in this game if we allow the vanity of wealthy individual to influence what research is conducted tomorrow.

There is another problem with private funding, which is lack of financial stability. One of the main functions of governmental funding of basic research is its sustained, continuous availability and reliability. High quality research builds on educational and technological infrastructure and expertise. It withers away if funding runs dry, and once people have moved elsewhere or to other occupations, rebuilding this infrastructure and attracting bright people is difficult and costly. Private donations are ill-suited to address this issue. A recent Nature Editorial “Haste not Speed” comments on the problem of stability with US funding in particular:

“[W]hen it comes to funding science, predictability is more of a virtue than speed, and stability better than surprise.”

All this is not to say that I disapprove of private funding. But as always, one has to watch out for unwanted side-effects. So here’s my summary of side-effects:

• Interests of wealthy individuals can affect research directions leading to an inefficient use of resources, leaving essential areas out of consideration. Keep in mind that the relevant question is not whose money it is, but how it is best used to direct investment of resources into an endeavor, science, with the aim of serving our societies.
• When it comes to delicate questions like which scientific project is most promising, somebody’s personal interest or experience is not a good basis for decision. Short-circuiting peer review saves time and effort in the short run, but individual opinion is unlikely to lead to scientifically more desirable outcomes.
• Eyeing and relying on private donations is tempting for governments and institutional boards, especially when times are rough. This slope can be slippery and lead to a situation where scientists are expected to “beg for money,” which is not a good use of their time and skills, and questionable to result in fair and useful funding schemes.
• The volume of private funding and the interests of donors tend to be unstable, which makes it particularly ill-suited for areas like basic research where expertise needs sustained financial commitment.

So what is the researcher to do? If somebody offered to fund my project I probably wouldn’t say no: Obviously, I am convinced of the relevance of my own research! Neither would I expect anybody else to do so.

But whenever the situation calls for it, scientists should insist on standard quality control and peer review, and discourage funding schemes that circumvent input from the scientific community. Otherwise we’re passively agreeing on wasting collective effort. The standard funding scheme is taxation channeled to funding agencies. The next easiest thing is donations to existing funding agencies or established institutions, not purpose-bound. Private foundations and their review process are not necessarily bad, but should be treated carefully, especially when more opaque than transparent. And crowdfunding, hip as it sounds, will not work for the unglamorous, dry, incremental investigations that form the backbone of basic research.