Venture philanthropy presents a new model of research funding that is particularly helpful to those fighting orphan diseases, which actively manages the commercialization process to accelerate scientific progress and material outcomes. This paper begins by documenting the growing importance of foundations as a source of funding academic research as traditional funding from industry and government sources decline. Foundations are known for their innovative techniques and we consider the evolution of the ways that foundations fund academic research and form partnerships across academia and industry. We examine the example of the Cystic Fibrosis Foundation and the development of the drug Kalydeco® as a demonstration of the principals of strategic foundation funding. The Cystic Fibrosis Foundation adapted to a venture philanthropy model and took an active role in drug development, stewarding the commercialization process from funding basic scientific work in academic institutions, to making an equity investment in a start-up firm. We conclude by evaluating the advantages and disadvantages to venture philanthropy for the academic researchers, industry partners, foundations, and universities and consider an agenda for future research.
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Valleys of Death are defined as the period of transition when a developing technology, while perceived as promising, is unable to attract funding for its continued development (Auerswald and Branscomb 2003).
Until 2010, the National Science Foundation includes foundation and nonprofit funding in the “other” source category with foreign government investment.
University practices are heterogeneous. Any gift that is targeted for a specific research project and for which there are expectations of a reporting relationship should be considered as sponsored research. There are, however, organizational issues related to credit for fundraising, accountability and donor relationships that limit these arrangements. Many foundation gifts provide funding for research on a specific topic for which the university holds competitions and provides oversight.
Even established medical research funding organizations, such as Robert Wood Johnson are experimenting with this model in their Complex Chronic Care program.
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This material is based upon work supported by the National Science Foundation Science of Science Policy Program under Grant Number 1158755. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation. We appreciate comments received from participants in the Johns Hopkins University Quantum Leap Workshop, Robert Cook Deegan of Duke University, and participants at the APPAM Fall Conference.
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Feldman, M.P., Graddy-Reed, A. Accelerating commercialization: a new model of strategic foundation funding. J Technol Transf 39, 503–523 (2014). https://doi.org/10.1007/s10961-013-9311-1
- Venture philanthropy
- Academic research
- Drug development
- Cystic fibrosis