Photos: iStock / assalve, RubberBall / Alamy Stock Photo

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.

Quelle Grafik: BFS – Grup­pie­rung und Darstel­lung swissuniversities

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.

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