Medical Progress and Private Money

Wherever the health sciences are progressing fastest today, it s often donated money that is pushing the frontier

A lot of people today assume that funding high-end medical research is something best left to government entities like the National Institutes of Health or the National Science Foundation. That couldn’t be further from the truth.

The most spectacularly successful medical-research institution on earth is Rockefeller University in New York City. If Rockefeller University were a nation, it would be number four in the world for Nobel Prizes won in the field of medicine. Its faculty members have been awarded 25 Nobels over the years.

The institution was created by John D. Rockefeller Sr., after the loss of one of his grandchildren to scarlet fever cemented his determination to battle cruel illnesses with his own wealth. This New York City lab became the flagship of his effort, though Rockefeller also supported health research in other ways and places. Some deep investigation by Philanthropy magazine a few years ago found that more than 60 Nobel scientists had benefited at some point in their career from Rockefeller financial support. The breakthroughs we can attribute to these donations include things like blood typing, the discovery of DNA, the taming of yellow fever, methadone treatment, the most effective AIDS drugs, and thousands of other medical innovations.

More than a century after its creation, Rockefeller University remains astonishingly productive—and it is still powered overwhelmingly by donated money. The latest annual report from the university shows that its total revenue from private gifts was four times as big as its government grants for the year. Russell Carson, 2019 winner of the William E. Simon Prize for Philanthropic Leadership, has been a donor to the university since 1994, and is emblematic of the philanthropic stalwarts who have kept the place humming with innovation.

In addition to being generous with their money, private donors offer Rockefeller University lots of constructive management guidance. Carson, whose expertise in the private-equity business involves making companies as efficient as possible, chaired Rockefeller’s board for 13 years. Oversight like that has helped give the place an unusually entrepreneurial structure that is far more productive than a typical university or other large bureaucracy.

Russell Carson

There are no traditional academic departments at Rockefeller U. Instead there are 81 separate laboratories, each managed by an eminent scientist who reports directly to the president. The bureaucracy is minimal, and the administration is extremely lean. The best scientists in the world are mostly left alone—to do science at the very highest level.

I once called up the directors of some of the top research labs in the U.S. and asked them to compare the importance at their facilities of government grants versus donated dollars. Every one told me that donated money is absolutely crucial to their success—because it can be so much more innovative. The flexibility, speed, and nimbleness of philanthropic medical funding, they explained, makes it far more consequential than just the dollars involved.

Federal grants come wrapped in paperwork and exhaustive requirements. That’s why even the most productive researchers say they spend a third or more of their time just applying to agencies. Federal grants have tight strictures. Their funds can’t be transferred to alternate projects, for instance, even if you reach a dead end on the work you applied for.

And government grants are rarely awarded to the kind of high-risk/high-reward researchers who are responsible for most scientific breakthroughs. Would you believe that only 1 percent of NIH grants today go to researchers who are 35 or younger? The average age at which researchers get their first federal grant is now 43! In science, you’re a dinosaur by then; finding new paths in medicine is typically a young person’s game.

Many of these disadvantages of government funding are reversed by philanthropic money. Donors are often willing to bet on new investigators and unproven ideas. They will buy machinery, and buildings, and assistants for scientists who are producing, while government grants can only be used for one rigidly defined experiment. Donated funds can be shifted around by recipients from one project to another, to feed whichever approach is progressing best. These are the reasons why even in places where gift money is smaller in volume than government money, it frequently produces much bigger returns.

The end result is simple: Wherever U.S. medical science is moving fast today, it is generally philanthropy that’s pushing the frontier.

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