How to finance investments in research and innovation in the future? Which forms of financing might stimulate investments and leverage the wealth that has been accumulated in Europe? Which new collaboration structures will lead to breakthroughs in fundamental research? These questions were addressed during the conference ‘Philanthropy and Social Investments Fostering Research and Innovation: New forms of financing and partnerships’, hosted by the Center for Philanthropic Studies at VU Amsterdam on 21-22 April. The conference is associated with the Netherlands EU Presidency 2016.
The conference proved to be a fruitful starting point for exploring new collaboration structures between the European Commission, (larger) European foundations and social finance intermediaries. Key-note speaker director-general research and innovation Mr. Robert-Jan Smits from the European Commission stressed the independence of foundations, but also referred to their collaborative mission to foster research and innovation in Europe. The European Commission hope to facilitate this by providing a collaboration platform.
The desire for foundations to invest in research and innovation is clear from the EFC supporting the Research and Innovation (EUFORI) Study, which was briefly presented by Professor Philanthropic Studies Theo Schuyt. This first attempt to map foundations’ support for research and innovation in the EU estimates an annual budget of 5 billion Euros, but also refers to the 127 billion in assets that might be invested in research and innovation if provided the right conditions and opportunities for collaboration. Professor Theo Schuyt from the Center for Philanthropic Studies at VU Amsterdam made a comparison with the three-partite of the French revolution – liberté, egalité and fraternité – to note that markets (liberté), governments (egalité) and philanthropy (fraternité) form the very basis of our modern welfare states and that all actors involved depend upon one another. According to Schuyt ‘we will have to look for new ways of investing in research and innovation. Next to traditional grant-making, venture philanthropy, impact investing, and guarantees for research investments might be added to the mainstream investment toolbox of foundations.’
That some foundations already make use of these forms of financial support, but not enough, was made clear by Mr. Luc Tayart de Borms, managing director of the King Baudouin Foundation (Belgium). ‘Theoretically, foundations are considered to be independent risk-takers, providing investments and support in fields that are neglected by government or corporate. However, most foundations are reluctant to take this role and prefer to walk the beaten track’.
The conference proved to be valuable to foundations reconsidering their role and looking for new ways of investing. Possible tracks were provided by Mrs. Shiva Dustdar of the European Investment Bank. She too invited foundations to collaborate with EU institutions in expanding their portfolio of investment tools, as did the panel speakers that provided best cases in collaboration and forms of financing in fostering research and innovation. The next step taken by the European Commission will be to launch an expert group that will explore these and other possibilities.
Perhaps, in a few years, we might reflect that the conference was the starting point for new innovative forms of financing, and Science Impact Bonds and mainstream investments funds for research will provide Europe with a next step in the march of civilization.