Expert group says Europe could benefit more from research foundations

January 31, 2006

Brussels, 30 Jan 2006

Seeing an opportunity to boost research funding without asking more of either governments or industry, the European Commission has funded a study on the potential role of foundations and the non-profit sector in increasing research investment. The resulting report confirms that foundations 'could potentially be an important element in the [European Commission's] strategy to create a European Research Area', and sets out recommendations in five key areas.

The term 'foundation' is used in the report to describe non-profit entities, independent of government and industry, serving public goals, and having their own governing board and source of income. In 2001, there were an estimated 62,000 foundations in the EU 15, according to the European Foundation Centre (EFC). Of course the majority of these do not operate in the research sector.

Currently, the level of funds channelled into research by foundations is low, both in comparison with funding from government and industry, and compared to funds provided by foundations in the US. The report suggests that this phenomenon can be attributed to obstacles and disincentives that inhibit giving by individuals and corporations, and which hinder the flow of funds from foundations and the non-profit sector to research, or hamper the effective use of funds.

Foundations could, however, help research efforts in a variety of ways, the report's authors argue: 'They can increase the volume of research funds for fundamental, blue-skies research, research in orphan areas and early-stage applied research not sufficiently developed to attract industry funding; they can help further European integration through supporting cross-border research projects. They can fund interdisciplinary projects; enhance researchers' mobility, exchange and collaboration; provide a structure to fund small projects and a strategy to fund research in a long-term and coherent framework complementary to industry and government. They have the flexibility to respond to the needs of the research community, and trigger research spending by bigger funders.'

The report's recommendations address specific actors (governments, EU institutions, foundations, industry, universities and the general public), and are divided into five broad categories: improved visibility and information about foundations (income, expenditure and activities); a more beneficial legal and fiscal environment for foundations; mechanisms for leveraging funds for research; more effective funding arrangements and regulation; and a more conducive EU-wide environment for the operation of foundations.

Central to increasing visibility of research foundations is the collation of comprehensive data on the foundation sector across the EU, according to the report. This could be tackled by encouraging the creation of a European forum of research foundations, the authors suggest. Another recommendation under the heading of 'visibility' concerns promoting donations to research through national and international campaigns.

On fiscal and regulatory issues, the paper recommends ensuring that donations and charitable giving by individuals and corporations benefit from more general tax credits or deductions. This would include ensuring that donation schemes are tax-effective and user-friendly, and that all types of donations to foundations (for example cash, real estate, shares, intellectual property rights) are encouraged.

The report also recommends action on the tax treatment of foundations' activities, and simplifying the legal and regulatory environment for foundations.

Moving on to improving mechanisms for leveraging funds for research, the report recommends introducing a system of 'matching funds' for foundation-supported research at both national and EU level; fostering the development of new research foundations by encouraging 'philanthropic venture capital; and encouraging the creation of sector-specific or issue-specific foundations by the corporate sector.

More effective funding arrangements and mechanisms should be promoted, according to the report. This could be achieved by improving networking and cooperation between foundations and exploring possibilities for the creation of university foundations, says the report.

The expert group's final recommendations relate to the fostering of a more conducive EU-wide environment for foundations. This would involve making changes to the EU regulatory and fiscal environment, and improving the conditions for cross-border giving, as well as for foundation activities extending beyond national borders.

The report closes with calls for a conference to follow up on these recommendations, as well as a mechanism for monitoring the implementation of these recommendations. The authors also underline that, if the momentum of this report is to be maintained, clear commitment is necessary, particularly at a political level, to raising the impact of giving to research.

The report

CORDIS RTD-NEWS/© European Communities, 2005
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