Private funding for research is more important than ever!
Freedom to take on risk financing
Swiss universities and research institutes frequently top the international ranking tables. Private funders are partly responsible for ensuring this remains the case: according to the Federal Statistical Office, their contributions make up an average of almost a third of a university’s overall budget.
But what does the term ‘third-party funding’ really encompass? As this overviews shows, a great deal. Third-party funding runs from competitive national and international research funding provided by the Swiss National Science Foundation and the EU, through to public and private research mandates, to income from further education and services, gifts and legacies. University foundations, which acquire private funds in various ways, are of particular significance. As transfer and pooling vessels, they play an increasingly important role in terms of third-party funding. The oldest Swiss university foundation, Fonds général de l’Université de Genève, dates back to 1945. Switzerland now has a further 10 university foundations, and in 2021 the UniBE Foundation and the Fondation pour l’Université de Neuchâtel came into existence.
Risk and innovation capital
It’s not primarily their financial strength that explains why private foundation funds play such an important role for universities. The four foundations of ETH, HSG, the University of Zurich and University Hospital Zurich raised CHF 166 million in 2019. With the CHF 135 million invested in research and development by members of the sector association SwissFoundations, they represent a sideshow, both in relation to the total of all third-party funds and to the universities’ overall budgets. The type of money is much more interesting. Private funds give universities the freedom to take on risk financing, for strategic initiatives outside the standard state funding, for networking and innovative partnerships. An example is UZH Life Sciences AG, founded jointly by the UZH Foundation and Novartis Venture Fund, which awards venture capital to start-ups in the life sciences. The initiative’s benefits are twofold: first, private research funding enables new approaches and innovative ideas for collaboration to be tested. Second, due to their independent legal form, university foundations can launch these initiatives only outside the strictly regulated university framework.
Wide range of options
It’s interesting to take a look at the diverse range of services offered by university foundations. Alongside traditional individual donations, donors with a certain funding volume can set up individual named funds and sub-foundations under the umbrella of the university foundation. The ETH and UZH foundations have ‘polyfunds’ or ‘President’s funds’ for non-earmarked donations. Potential donors are linked to the university via Excellence Circles or Legacy Circles by means of high-class, exclusive offers and brought into direct contact with scientists and researchers at academic dialogue events.
Transparency as a basis for trust
Private funds often have a direct impact on the state’s area of responsibility and even if the financial contributions are comparatively modest, they can arouse mistrust and lead to misunderstandings. In a university context, this is the case on two levels: healthy state funding is and will remain the foundation for high quality research and teaching. An increase in private funds must therefore not lead to a reduction in public funding. Transparent handling of private funds is crucial for public acceptance both within and outside the research community. Most university foundations have drawn up a code of conduct over the last few years on the acceptance and publication of funds raised. They publish lists of funded professorships, disclose donations above a certain figure and publish names of donors on their website.
It remains to be hoped that substantial amounts of new funds will find their way into private research in the coming years. After all, CHF 95 billion was bequeathed in 2020, five times more than 30 years ago. In any case, universities seem to be well equipped – and they need to be, given the threat posed to Switzerland as a research and science location by the consequences of the collapse of the framework agreement.