The Gates Foundtion: For-Profits Need not Apply?

Since 1996, the Bill and Melinda Gates Foundation has put its considerable resources to work to “ensure that life-saving health advances reach those who need them most” (Gates Global Health Overview).  But, due to the extent and range of the foundation’s giving, it has been difficult to figure out who is receiving what and why.  Recently, McCoy et al. analyzed the foundation’s global health funding and published their findings in The Lancet (McCoy et al. 2009, Lancet citation).  They reported that in 1996-2007 the foundation gave more than 1000 grants for a total of $9 billion primarily to:

-global health partnerships, like the Global Fund to Fights AIDS, Tuberculosis, and Malaria; the Global Alliance for Vaccine and Immunizations (GAVI); and Global Alliance for Improved Nutrition ($5.85 billion was given to 20 organizations);

-nongovernment and non-profit organizations involved in research, health-care delivery, and public awareness/advocacy ($3.3 billion to 100 organizations with the bulk going to Seattle-based PATH which has received close to $1 billion); and

-universities and research hospitals ($1.84 billion to 78 institutions).

To give an idea of scale, the authors note that the amount spent by the foundation in 2007 ($1.65 billion) was almost the same as WHO’s budget that year.  The authors acknowledge, though, that knowing the final disposition of the funds is problematic since many of the recipients re-granted the money, and I assume tracking all of their disbursements was belong the paper’s scope.  Hence, figuring out how much funding went into specific efforts, such as my interest, creating those life-saving health advances through product testing, manufacture, and distribution (product development), will require more investigation.

What is clear from their analysis is that the foundation does not directly fund for-profit organizations, for example, companies developing products for global health (with one exception, Aktiv-Dry LLC; see my posting of October 28).  This is a notable omission for an foundation built with profits from the selling products that many people found worth buying.  One would think that directly funding product development in companies, with appropriate milestones and pricing guarantees, would be worth a try.  But, in general, foundations rarely give grants or make investments in for-profits, although this bias seems to be eroding as foundations seek that sustainable solutions that have not resulted from charity alone, and funding companies carries the baggage of possible adverse publicity.

There is one avenue for companies to receive direct funding from the Gates Foundation.  The Grand Challenges Explorations, a grant program started in 2008 and intended to “to expand the pipeline of ideas to fight our greatest health challenges,” is open to applicants from any type institution  (Grand Challenges Explorations).  The program has an initial grant of $100K, a mercifully short application (2 pages) and review time (4 months), and  successful projects have the opportunity to receive additional funding of $1 million although the approval process seems yet to be determined.  The applications are reviewed by unnamed reviewers who have “broad expertise and experience in discovering inventive approaches to daunting issues” without identification of the applicants.

Since its start, the program has made 262 grants, totaling about $8 million per year (less than 5% of total granted annually by the foundation).  I reviewed the list of recipients and found academics well-represented but few companies (17 or 6.5%).  The difference has at least two explanations:  few companies applied and/or company-based scientists submitted uncreative or non-innovative ideas.  Without reviewing the applications, one can’t say, but I would think that the Grand Challenge Explorations Program would be well-served by encouraging, maybe favoring, scientists and organizations that, in addition to having a creative idea, also have the experience, resources, and motivation to convert the idea into a solution.  Or perhaps, when awarding the $1 million grants, the foundation could require the awardees to be teamed with a entity with experience in developing and delivering products.  It will be interesting to see which of the 262 ideas, and how, result in solutions.


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