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Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
Market-Based Solutions to Vital Economic Issues
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Oct 15, 2019

Institute Insights: Funding Innovation: Exploring Philanthropy in the Sciences

By UNC Chapel Hill Public Policy Doctoral Candidate and CREATE Project Manager Emily I. Nwakpuda

When the federal government, state governments, industry, foundations and nonprofit organizations support scientific research, they do so with the goal of uncovering innovations and advancing science. But what about private donors? Their funding goals may not be as clear as those of mission- or profit-driven entities, but the substantial gifts of high-net-worth donors have substantial capacity to support significant scientific findings, societal outcomes and economic returns on investment.

The research I’ve developed and conducted with the help of CREATE explores the intersections of philanthropy, science and innovation policy, and entrepreneurship to provide empirical evidence of high-net-worth donors acting as major supporters of science and innovation at U.S. universities. My colleagues and I used a mix of quantitative and qualitative methods to develop original data, and machine learning techniques to develop a philanthropic database.

Our work disaggregates high-net-worth donors who support science and technology from all other donors to provide new insights on the profile of R&D donors. Specifically, our analysis finds that philanthropic causes are frequently supported by successful entrepreneurs. Entrepreneurs provide 55% of philanthropic gifts to establish academic research centers that have targeted missions for scientific and technological progress. We also find that philanthropic entrepreneurs act as angel investors to support risky science – but find the flexibility gained from a large philanthropic investment, like startup funding, does not eliminate a research center’s struggle for survival.

A unique aspect of our research is that it has allowed us to collaborate with private firms and nonprofits to conduct qualitative studies. Working with incubators and entrepreneurship centers, we conducted two experimental surveys with a diverse sample of entrepreneurs to understand the factors that motivate individuals to support science and innovation. The results of the surveys add new insights on entrepreneurs’ philanthropic inclinations. The first uncovered entrepreneurs’ propensity to support highly innovative science. The findings from this survey informed the design of the second survey, which focused on entrepreneurs’ specific support of quantum science. The survey showed that, as entrepreneurs’ incomes increased, their financial support of quantum science increased as well.

The latest iteration of our research began in June 2019. It focuses on a distinctly skilled and highly wealthy subset of donors – entrepreneurs who have had an initial public offering (IPO) – and considers the extent of their philanthropic investments in science, specifically academic science, technology, mathematics and engineering (STEM). We look forward to sharing the results of this research with you.

Learn more about Emily’s research, here.

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