Research-oriented nonprofits tend to face the same problem: a dearth of donations for basic scientific exploration. This is particularly true in the health space—it’s easy—well, easier—to find donors with personal experience of a particular disease and willingness to contribute to research and care for that condition. It’s a good deal tougher to find donors willing to support study of health and biology that may not translate into cures or treatments for years, if ever.
That’s a problem, given the importance of basic research. However long and unpredictable the route, such research is crucial to the development of new drugs and other therapies.
A Quest for New Donors
The Dana-Farber Cancer Institute is one of the world’s most respected centers of cancer research and treatment, with a long record of important contributions to cancer care. “But it’s very difficult for us to raise money for basic research, even though our research has led to some spectacular breakthroughs,” said Teresa Coffey-Gordon, director, innovation funds, at Dana-Farber. “Most funding coming in is for a specific cancer fund.”
So Dana-Farber set out to develop a way to drive new fundraising for basic research. It realized it needed to find new donors willing to support the life sciences, explained Barrett J. Rollins, MD, Ph.D., chief scientific officer emeritus of Dana-Farber. “Our hypothesis was that there was a donor class out there who had not given to basic research because they wanted returns on their investments,” he said.
In other words, Dana-Farber needed a mechanism to connect with biotech investors who could also contribute to basic research, even if that research might not have anything to do with their investments—essentially, a new class of donors.
What followed was an eight-year gestation during which Dana-Farber fundraising strategists developed what ultimately became a partnership with healthcare investment firm MPM Capital. They developed a two-pronged strategy consisting of two new funds: one, a typical biotech venture capital fund that would raise money to invest in early-stage oncology companies. The other fund would support early-stage oncology research at Dana-Farber.
The important element, explained Rollins, is that in order to take part in the venture fund, investors would by required to contribute to the Dana-Farber research fund. MPM Capital manages the venture fund, and Dana-Farber controls the research fund; neither organization could influence the other’s fund. At least 50 percent of the venture fund would seek to commercialize research developed by Dana-Farber scientists, but the rest could be invested in companies and research developed elsewhere.
A Unique New Model
After a year and a half of fundraising, the MPM venture fundraising has just closed with $100 million to the new investment instrument called the MPM Oncology Innovations Fund. Dana-Farber has so far raised about $27 million for its fund—the Dana-Farber Innovations Research Fund—but will continue to seek contributions.
“The specifics of this model are definitely unique and first-of-its-kind,” said Stephen Curtis, Ph.D., of MPM Capital, managing director of the Oncology Innovations Fund. “There’s not a direct link where the philanthropic dollars go and where the commercial dollars go, but in the life sciences, it’s incredibly important to continue to support basic research. We saw this as a way to give back more generally to the research endeavor, which is important for sustainability.”
Basic science is typically pretty far down the list of philanthropic grantees, far behind immediately pressing needs or opportunities to get new drugs approved as soon as possible. But with so much capital concentrated in the hands of such a small percentage of the population, any model that encourages investors to steer dollars into basic research can make a big difference to an underfunded segment of philanthropy.
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