High risks, high rewards may best describe the private funding of scientific research. At The Philanthropy Roundtable’s last annual meeting, a panel of experienced funders discussed how their foundations had sought to have a lasting impact in scientific research. Excerpts from the discussion follow. Charles Harper, executive director and senior vice president of the Templeton Foundation, also spoke on the panel. For an in-depth look at the Templeton Foundation’s work in science, see our interview with Harper, in which Harper talks about his own experience as a scientist at Harvard and NASA, as well as the foundation’s cutting-edge efforts to bridge science and religion through support of “research projects in astrophysics, neurobiology, animal behavior, and other disciplines.”
MILES GIBBONS: A brief history of our topic would note that private foundations have been a major funding source for scientific research since the 19th century. Before World War II, the federal government invested little in scientific research, and most of its funding went toward biological research sponsored by the Department of Agriculture. In 1940, an estimated $45 million was spent in biomedical research, only $3 million of it from the federal government.
After World War II, federal funding for biomedical research expanded exponentially. In the 1940s, ‘50s, and ‘60s, the principal private foundation supporting medical research was the John A. Hartford Foundation. Between 1954 and 1979, it gave almost $15 million for research, mostly to universities or hospitals. In its peak years of 1962-72, Hartford contributed more to biomedical research than all other major foundations combined. The results of its work include kidney dialysis, cryogenic surgery, transplantation immunology, and many advancements in cancer research.
The Hartford Foundation’s assets came from the family that started the Great Atlantic and Pacific Tea Company, or the A&P. By 1979, the company’s stock had diminished greatly, while the cost of medical research had increased substantially, and the federal government, particularly the National Institutes of Health, had become the major supporter of medical research. In 1979, the Hartford Foundation ended its support for medical research and began funding other causes.
Foundations that want to fund medical research must confront two issues the Hartford Foundation confronted: all scientific research is expensive, and biomedical research is dominated by the federal government. In fiscal year 2003, the National Institutes of Health had an appropriation of $23.7 billion, and the National Sciences Foundation had an appropriation of $5 billion.
In spite of this, private foundations have continued to support scientific research and made substantial contributions, mostly but not entirely in the medical research area. For example, the Lucille Markey Foundation lasted only about 15 years but made an enormous investment in basic research.
It is difficult for private foundations, particularly small to medium ones, to have an impact in scientific research. But it is not impossible. To have an impact, they must find a niche, address an important issue, and have sufficient funds to affect that particular area.
On the other hand, many foundations contribute to research in different ways, including the endowment of chairs at universities and the granting of fellowships to undergraduate and graduate students interested in pursuing scientific research. Others contribute to new science buildings, laboratory renovations, etc. For example, the Aaron Diamond Foundation created a research laboratory specifically for HIV/AIDS at a time when the federal government and other funding sources were shying away from anything connected to that huge problem. And the Hertz Foundation, in their fellowships, have done a lot to identify and support post-graduate researchers who have gone on to be research leaders.
An example I’m particularly familiar with is the Whitaker Foundation. In the 1960s and 70s, medical research primarily was biology-based, with little engineering involvement, and most who sought support for biomedical engineering had trouble. The National Institutes of Health believed that if a project involved engineering, the National Sciences Foundation should support it, and the NSF believed any project involving medicine should be supported by the NIH. As a result, there were funding problems for biomedical engineering research.
In 1976 the Whitaker Foundation began to award grants to young medical investigators who wanted to include engineering in their research. The grants were for three years, so the researchers could develop their data sufficiently to apply to NIH or NSF. A recent survey found over 60 percent gained NIH funding after their Whitaker grants, and over 30 percent received NSF funding.
The Whitaker Foundation then realized the need for training programs for bioengineering—something most major research universities lacked and opposed. So in the late 1980s the Whitaker Foundation began to give multi-million-dollar grants to major research universities to develop new biomedical engineering departments or expand existing ones. The foundation directly supported the creation of 38 new biomedical engineering departments.
Now biomedical engineering is the fastest growing engineering discipline. The world recognizes its importance, having seen such advances as artificial hearts and artificial tissues. Bioengineers have produced new ways of delivering drugs, provided surgeons with image-guided surgery, and enabled pediatric surgeons to correct fetal abnormalities in the womb. Hip replacements and joint replacements have become commonplace, as have cochlear implants and laser surgery. Most of the technology one finds in today’s hospital rooms has been developed through biomedical engineering over the last decade.
The Whitaker Foundation can’t take credit for all these accomplishments. Yet as the foundation spends down its principal with the goal of going out of business in 2006, it has the satisfaction that, by and large, it has accomplished its mission.
ED AHNERT: As a corporate philanthropist, my take on supporting scientific research may differ a bit from that of private foundations. Scientific research is at the center of my company even more than my foundation. The company’s internal science research budget is $600 million a year. We employ about 2,000 Ph.D.s in various science and engineering disciplines. We earn about 1,000 patents a year from the U.S. Patent Office.
We think this investment has paid huge dividends over the years for the company and for society at large. Think back to the 1970s and consider how much cleaner running are the cars you drive today. What you may not know is that the techniques for discovering and recovering oil are much different from what they were when I first went to work for the company 30 years ago. We don’t drill many dry holes any more, which lowers the cost of finding oil and reduces our environmental footprint. And once we find it, we recover a much greater percentage of each deposit. We can also see and recover it in places we couldn’t imagine two decades ago. We routinely drill in mile-deep ocean and similar situations—true technological tours de force.
About a year ago we announced an investment of $100 million in Stanford’s groundbreaking Global Climate and Energy Project. This 10 year initiative, with a total investment of $225 million, is co-sponsored by a group of prominent global companies, not only ExxonMobil but also General Electric, Toyota, and Schlumberger, with others considering joining. Its goal is to unite scientific and engineering researchers with private industry from around the world in the search for new, commercially viable technologies that can substantially reduce greenhouse gas emissions into the atmosphere by combining the basic research at the universities with practical know-how from major companies. This collaboration will push the frontiers of energy technology over the next decade.
Now let me turn to the scientific research sponsored through our philanthropic program. First I’ll talk about what we focus on and how we organize our work; then I’ll describe three different programs we’ve launched.
On the philanthropic side, we focus on research with direct interest to the company that also has broad social interest. We support work at the interface between natural sciences and social sciences that seeks to solve complex problems of science and public policy. When we identify one of these areas, we first work internally to define the scope of the problem; then we draw up a list of research institutions capable of doing leading-edge work across all aspects of the problem. We then typically make private contact with, say, the top half-dozen institutions. We solicit from them an expression of interest in working with us and other funders on the topic. After reviewing these submissions, we often make a small planning grant to the institution that makes the most interesting proposal, because it often requires further development before we’re ready to make a major, multi-year commitment.
Once the planning is satisfactory, we make a large, multi-year grant to launch the initiative. Our objective is to create a long-lived, multidisciplinary center of excellence focusing on the particular issue in question. We expect to work with the lead institution not only on the scientific research plan, but also on recruiting other funders to expand the work.
Let me give three particular examples of these centers we’ve created since I’ve headed the foundation. The first is the Joint Program on the Science and Policy of Global Change at MIT. This center is the world’s leader in bringing together the natural sciences related to climate change with the disciplines of economics and political science. It arose from discussions between MIT faculty and ExxonMobil scientists beginning in the late 1980s.
In 1991, we made a small planning grant to MIT to study the feasibility of such a center, and the following year we made a $1 million, five-year award to create this joint program. It now enjoys support from a wide range of U.S., European, and Japanese companies, four departments of the U.S. government, and from private foundations as well.
One of my friends is a British environmentalist. He’s quite radical and embarrassed to be seen with me, but he still goes out for dinner with me, particularly when I pay in London. One of the joys of our meetings is his discomfort in knowing my company created this center at MIT, because he thinks it’s the best in the world, and he just can’t believe the world’s largest oil company created it.
The second example is the Center for Human Performance and Risk Analysis at the University of Wisconsin, Madison, started in 1994 with another five-year grant from our foundation. The center conducts interdisciplinary research, both basic and applied, on human performance and decision making processes in complex, advanced technology systems. That sounds quite arcane, but the issues are important in the control rooms of refineries and chemical plants, on the bridges of oil tankers, and behind the wheel of tank trucks carrying fuels and chemicals.
The center’s goal is to identify the factors that degrade human performance, develop ways to prevent or mitigate such degradation, identify the chains of events that lead to accidents, and develop interventions that break those chains. The center also conducts an active dissemination program based on its research, which is supported by a wide range of companies and governmental organizations. We were pleased to see, for instance, that the U.S. military piled in, because they have some of the same issues with pilots, captains of ships, and people operating complex, dangerous systems.
The third example is the Center for the Study and Improvement of Regulation at Carnegie Mellon University. This center’s ambitious goal is to merge the study of pollution, risk, public health, technology, economics, organizations, and history to improve environmental health and safety regulation. It works in partnership with the Institute for Risk Analysis and Risk Communication at the University of Washington.
This center was launched solely with support from ExxonMobil, but it now receives support from the Andrew W. Mellon Foundation, the Heinz Endowments, and a number of other corporations and trade associations as well.
This approach to scientific research is not the only one we use. We use “one off” specific research grants as well, particularly in areas related to the biomedical impacts of various compounds our company works with, but the approach I’ve outlined has proven particularly productive and has worked for us time and again. Several aspects of it are important. First, we deal with problems critically important to our company that impact virtually all of our many business lines. I have little trouble justifying funding for these projects because they address important business challenges as well as societal problems. On the other hand, the social dimensions of the problems make it easy to persuade research institutions to build these centers and to attract other funding partners, whose support helps build the centers into truly world-class organizations.
LESLIE D. MICHELSON: I’m head of the Prostate Cancer Foundation. The disease we fight is the most common non skin cancer in America, striking 220,000 men every year. A man has a one-in-six chance of contracting prostate cancer; a woman has a one-in-eight chance of breast cancer.
Prostate cancer is also the cancer with the highest expected increase in incidence over the next ten years, mainly because prostate cancer attacks about ten years later than breast cancer. So as baby boomer men enter the target zone for prostate cancer, the number of new cases each year should rise from about 220,000 to 300,000 in the next decade.
That means in our work we don’t have time to wait. Although we are, by twentyfold, the largest private philanthropy focused on prostate cancer, we only spend about $2 of every $10,000 spent on prostate cancer research. Even if we make our two dollars twice as effective, we’re just a drop. We need to make the other 9,998 dollars 50 percent more effective.
So we do seven different things. First and in some ways most important, we spend most of our money on venture-style funding of the most innovative ideas. Before the big-dollar donors like the federal government or pharmaceutical companies will fund an idea, it has to be well established. We say, “Fine, if the big guys will fund it, we won’t. Instead, we’ll fund that 28 year old who’s got an idea that sounds terrific but may be too threatening to existing theories and experts.” Our track record in this is extraordinary. Around 15 to 20 percent of the things we’ve funded this way have proven promising enough to gain funding from the government or biopharmaceutical industries.
The second thing we do is improve clinical trial designs. Cancer, especially prostate cancer, is not well understood. It’s shocking, but we still don’t understand the basic biology of cancer the way we understand the basic biology of, say, cardiovascular disease or diabetes. As a result, it’s difficult to structure clinical trials so as to get quick results. We’ve put in place a variety of programs to take the smartest people in the world and have them collaborate on something as mundane as clinical trial design.
A third thing we do also sounds mundane but makes a huge difference—patient recruitment into clinical trials. Although more men today are battling prostate cancer than women are battling breast cancer, this year 35,000 women bravely participated in a clinical trial that has a good potential for helping them and has a definite potential for helping their daughters. By contrast, only 8,000 men have participated in prostate cancer clinical trials to date. We need to persuade more men to participate, especially since prostate cancer has the strongest familial link of any of the major cancers.
The fourth thing we do is work with the Food and Drug Administration (FDA), which must approve any drug to treat prostate cancer. Because the biology of prostate cancer is poorly understood, it is difficult to develop a clear and predictable path for demonstrating that a drug is efficacious enough to be approved by the FDA. We are working closely with the FDA, and with the help of its leadership we are exploring how to identify surrogate endpoints and develop other information so that the developers of prostate cancer drugs have a much clearer idea about the research they need to do in order to get the drug approved.
The next thing we do is to accelerate the diffusion of best practices. It’s disturbing to see the difference between the level of care prostate cancer patients receive at the finest medical centers in the country versus what a patient might receive in a small community hospital. Our foundation strongly believes in American capitalism, and we want to see more commercial competition used to fight this disease. We need to get new drugs that are safer and more effective into people sooner so that, frankly, businesses can make money off those drugs. Because when physicians prescribe these drugs, and the businesses that have developed them make money from those drugs, then what will the businesses do? They’ll invest more money in research. That means the foundation is working to have the worst physicians in the country adopt new technologies more rapidly, so that additional investment in research will result.
The last thing we’re doing is trying to help bring about paradigm changes in the field—single steps with very high risk that offer enormous potential for changing the whole game. One of these is something called “proteomic pattern recognition,” which involves the latest advances in genetic research. We’ve invested in a program that I believe will begin to be used much more widely within the next year or two.
Say we have 100 men with prostate cancer, they’re using the drug Taxotere, and 30 have responded very well. Right now, doctors can’t easily predict who else will respond well. So we’re supporting work on technology that will take one drop of blood from the fingers of those 100 men, put it through the most sophisticated mass spectrometer machines that exist—the same ones used by Intel in their clean rooms to purify the silicon in their chips—and produce a three-dimensional array of each man’s genetic code. We then apply mathematical pattern recognition technology to this enormously complicated three-dimensional picture and ask a computer what is common about the patterns in the 30 men who responded to the drug.
This work is already beginning, and if you walk up to one of our physicians and say, “I’m in trouble. Will Taxotere work?” He’ll say, “I don’t know, but give me your finger and come back next week, and we’ll tell you at the 95 percent confidence level whether you’re going to be a responder or not.”
Our investment in this technology has brought together Apple Computers, which has built special-purpose computers for us; Intel, which has given us the mass spectrometry machine; and a couple of other companies that have developed pattern recognition technology; and also the assistance of Oracle, whose database technology we need because the data collected is so massive.
If we can get all of this to work—and I’m fairly confident we can—it will show the kind of practical, paradigmatic change that we can accomplish in this field.