Assessing Funding Models - Charities Part 1

If you're wondering, why spend so much time on funding? Simple, funding is the key to research and the research that can be done. If funding fails in the middle of research, years of work can be lost. Work that often represents a scientist's life and dedication. This is why funding and answering the funding question is so important. Scientists spend much of their time worrying about funding, and all their research is centered around it. Few understand the cost and risk of medical research. The TV Channel CNBC, a channel dedicated to finance and economics, produced an estimate that a new medical discovery task (on average) 10 years and $1 billion. Further, size does not provide any certainty of discovery. In fact, most discoveries come from small innovative operations - who succeed against all odds. Now, with increasing medical concerns, new medical discoveries and the funding that supports it, is more important than ever. This means that a good funding model is key.

There are essentially three funding models; 1) government, 2) charities, 3) drug companies/for profit medicine. We are going to start with the second, and most visible - charities. Everyone has heard of, or has been called by, a charity asking for money for medical research. Almost every disease has a charity. The more popular the disease the more attention and money it gets. This is why charities hold fundraising drives and events, to bring attention to their medical issue. We have already taken a brief look at some of the largest medical charities. These large charities like the American Heart Association and the Canadian counter-part are large enough they can hold city halting events - like runs and walks. Corporations line up to sponsor these events, because it's good public relations to be seen doing good and supporting a good cause. However, when the annual reports of these charities are reviewed, you see that at most only 30% and as little as 10% actually goes research. To provide a better look, I compiled a list of 20 charities and looked for their annual reports and/or financial information. Of the twenty large charities collecting money (their annual report listing finances and income in the thousands, for example 20,000 list is really 20,000,000) only one reach 56%, and one 29% four were as low as 10%, and half had no financial information. This produced an average of only 10%, of the income collected by large medical charities, actually is spent on medical research.