News blog: how to solve the charity funding gap?

It seems unlikely that charity donors will want to pay for university research overheads – but someone will have to eventually

September 24, 2015
Mind the Gap sign on the Tube
Source: iStock

Nobody wants to run a half-marathon or bake cakes to raise money for an unknown university’s electricity bill. Most of us want to directly fund research that will help beat disease.

But understandable as this motive is, it is leading to growing anxiety as universities struggle to cover the difference between what charities can give them and the full economic cost of conducting research. This has led to situations that seem absurd: the Institute of Cancer Research is currently raising philanthropic donations…in order to be able to afford to take money from charities.   

Could charities start asking their donors to cover the full costs of medical research? It seems unlikely. 

When asked this question, Aisling Burnand, chief executive of the Association of Medical Research Charities, said that the “policy of not covering overheads is long-standing”. Charities “want to show to donors that their money is directly funding research”.

In recent years, there has been a slew of newspaper stories attacking allegedly excessive charity administration costs, such as high chief executive pay. Paying universities’ full research costs is not quite the same as charity administration. But particularly with the recent collapse of Kids Company amid accusations of extravagance, there will be strong pressure on charities not to fund anything that can be portrayed as outside their central mission.

However, if this approach does not change, the fear in the sector is that a poor settlement in this November’s spending review could lead to it becoming even more likely that universities will have to turn down charity funding.

And medical charities are just one example of this issue; industry funding of research is another. Earlier this month, Sir John Savill, the chief executive of the Medical Research Council, warned that significant cuts to the science budget could drive major pharmaceutical companies away from the UK.

This is why there is strong support in the sector for continuing the quality-related system of research funding, which is distributed to universities without being attached to any specific project. The argument is that this money can be used flexibly to effectively match funding from other sources such as industry and charities. In other words, it can “leverage” lots of money from other sources. And, of course, conversely, if QR funding is cut in the spending review, universities could be far more out of pocket than the headline reductions suggest.

Jo Johnson, the universities minister, has committed in principle to keep the dual system of funding going – that is, both QR and project-specific funding from the research councils. But he has also said that he wants it simplified.

Although nothing is certain before the spending review, one possibility is that the Higher Education Funding Council for England, which distributes QR funds, could be scrapped (speculation on this was increased yesterday after an announcement that the consultation on the future of the research excellence framework was being delayed until after the spending review). QR funding might then be distributed by the research councils or even directly from the Department for Business, Innovation and Skills, where extra strings may be attached – making it more difficult to plug the ever-widening charity funding gap.

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