Editor’s note: this post was jointly written with María Laffaire, responsible for individual funders at CIPPEC’s Institutional Development Direction, and was fed with inputs from Inés Lanz, Director of Communication at Fundación Vida Silvestre Argentina.
The diversification of funding sources is a growing concern among many organizations dedicated to research, whether they are universities, CSOs or think tanks. Diversification contributes not only to the sustainability over time of an organization (and especially of its goals), but also to its independence (for instance, when defining a research agenda).
Historically, philanthropy and the private sector have introduced great amounts of money in improving people’s lives. Moreover, private individuals and companies have always tried to shape the social and political agenda. As development aid increasingly looks for new funding models, the private sector is also thought to have an actual and potential role to play within the research-policy landscape (see the Think net Topic guide).
Yet the benefits of funding research are not as measurable as those of funding territorial based projects, and the former requires a long term vision. So, what are the reasons and motivations for private sector donors to fund research? They inevitably vary: some companies want to legitimize and raise their profile among customers by working with nonprofits, others seek for expert knowledge to improve their social initiatives, or they just want to find a ‘neutral’ organization that helps to push ideas into the mainstream of political debate.
On the other hand, research organizations increasingly search proactively (or at least accept) private-sector funding. Again, many reasons explain this decision: the need to diversify sources of funding, both trying to gain independence and ensure sustainability of their work (especially in regions where foreign aid and/or the state are not likely to support research); moreover, the private sector often addresses questions or issues that governments wishes to avoid. There is also the important backdrop of multinational companies being more powerful than the state in some instances.
Even if in many developing countries the relationship still needs to be strengthened, what seems to be clear is that the private sector and philanthropists can play a key role in supporting policy-oriented research. What are then the opportunities and challenges for research organizations when working with the private sector?
In addition to securing sustainability and independence through new sources of funding and working on issues that foreign aid or governments are not interested in (or have interest in not addressing them), turning to national companies interested in supporting local projects can push research organizations toward addressing issues of national relevance (which is less likely the case for organizations that depend heavily on foreign aid).
Working with the private sector does also entail challenges: independence and reputation seem to be the Achilles’ heels. Private funds, from corporations or individuals, are equally sensitive for many research organizations as their non-partisan image may be affected. As Mendizabal argues, private sector funding does not preclude criticisms of partisanship, for the private sector (particularly in developing countries) often wields influence amongst policymakers due to the porous borders between the two. This creates doubts over the independence of the research they fund.
While many strategies may be effective when seeking for private sector support (to create private sector councils for the organization, to organize breakfasts or brief meetings with companies to present the organization’s work in a specific area of interest), a fundraising event may be a good idea to bring together the community of private entrepreneurs and companies and make the institution’s work visible.