Good evening, everyone:

The Stanford Social Innovation Review last week published an incredibly thoughtful, and thought-provoking, piece written by Aaron, and our friend and former vice-president of program Ari Simon, about the assaults on science proliferating in every corner of this administration’s agenda. It provides a suite of recommendations about how to reinforce and reinvent American research science during such a difficult time.

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Entitled “Philanthropy’s Sputnik Moment,” the piece is quite long, so here’s the link, rather than making you scroll through it in email form: https://ssir.org/articles/entry/philanthropy-funding-scientific-research-now

Let me attempt to underscore – entirely inadequately – its major points as an encouragement for you to read it in its entirety.

Ari and Aaron point to the multiplicity of harms arising from the administration’s scientific grant cancellations: cessation of research, layoffs, flight of talent to other countries. They argue that it is unlikely that we will every return to a pre-assault reality. The challenge for philanthropy is “thus urgent and adaptive: how to help shape, amidst the unraveling of our current system, a better one.”

They observe that although the usual argument about philanthropy not being able to fill the gap left by a federal government that has not only left the building, but wants to demolish it, is correct, there are ways in which philanthropy can alleviate the harm and lay foundation for the next iteration of scientific research.

Their answer goes well beyond augmenting payout – the default toward which most conversations tend. Here are their seven “solutions,” in short-hand. The first four emerge from grantmaking, the final three from more stretch thinking; it is those final three that we can see Aaron’s hand most clearly.

First, invest in designing a better system.  The fragility of the current system stems from its overdependence on public monies. We should contribute to creating a bipartisan, cross-sectoral, time-limited commission to imagine a system that takes up “the hardest issues: from the structure of indirect costs to the distribution of intellectual property rights, from the biases of existing federal programs to the broken career paths of next-generation scientists.”

Second, keep research afloat. Provide stopgap support – if not through increased payout, then through recoverable grants that can be reclaimed if the government spigot is turned back on.

Third, provide support beyond the lab bench. Aaron and Ari state: “We need to do more than just write checks for research. That means offering forms of support provided in the past to nonprofits in other sectors, from mental health resources and career coaching, to development consulting and legal assistance—such as for brilliant scientists whose immigration status hangs in the balance.”

Fourth, protect the pillars. For relatively modest investments, philanthropy can such critical foundational elements as preserving data infrastructure decades in the evolution and prioritizing early-career scientists who represent the next generation of ideas and breakthroughs.

Moving to the remaining three solutions, Ari and Aaron write that philanthropy should put their balance sheets to work by using debt, equity, guarantees, bonds, and other tools that philanthropies like Kresge have long deployed to support affordable housing, community development, and climate resilience.

So, fifth: provide a social investment bridge. This entails exactly the kind of bridge-loans that started Kresge’s social investment practice seventeen years ago. Does this sound like Aaron to you? “Because any such note can be collateralized against future revenue or licensing income, funders can recycle investments and even embed public‑interest conditions such as open‑access data agreements or IP held in the public trust.” With quite a bit of help from Ari, to be sure.

Sixth, smooth cash-flow potholes. We can provide guarantees to help universities meet cash-flow shortfalls that can later be filled by donors or commercial banks. Again, Aaron’s voice is clear: “A guarantee “provides additional collateral to lenders while allowing a funder to keep those assets invested, offsetting any losses if a call is ever made on the guarantee.”

Seventh, establish and invest in public benefit corporations. This is particularly complicated, so I encourage you to go to the source to do the idea justice. In essence, however, foundations could provide subordinated equity or loans, and the universities could create a pool of future revenue based on its anticipated returns on intellectual property already in its pipeline – foundations would earn a modest return from this pool.

Aaron and Ari close with a discussion of the risks – in particular, the distortions of adding undue profit motives to a newly designed system. But they observe:

"The seal separating science research from our market economy was broken long ago . . . Technology transfer offices already exist. Private equity is already investing in university labs. . . . We have seen social investments have a transformative impact on other social priorities: from microfinance programs in the global south to affordable housing funds and renewable energy development. Those investments have all been structured to use the tools of finance to expand social benefit in a sustainable way—without being extractive. The same approach is possible for research science."

The article concludes with a call to meet the moment:

"Great foundations have stepped up in similar inflection points of the past. The risk today is not that foundations will overreach by trying new things but that they will solve for a system that no longer exists while self-rationalizing that there is nothing else they can do. The philanthropic malpractice of this moment, the true breaking of faith with mission, would be to just keep chugging along."

True across all the domains of our work.

We are so very fortunate to have benefitted from – and to continue to benefit from – two such insightful practitioners of our art. Thanks to Ari and Aaron.

Rip

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