Unlocking Local Impact: How $30 Billion in Philanthropic Funding Transforms Science and Health Research

Many foundations that donate to scientific and health research tend to support local institutions. My colleagues, Albert Laszlo Barabasi and Alexander J. Gates, and I looked into this trend through a study of foundation grants from 2010 to 2019. We discovered that almost 40% of these grants went to projects in the donor’s home state. Even more striking, 60% of the total funding came from those local sources.

Our analysis revealed a pattern: many foundations give to the same institutions year after year. In fact, about 70% of the grants made in one year were awarded to the same recipients in the following year. If a foundation has funded a specific institution for seven consecutive years, there’s a 90% chance it will do so again the next year.

We based our findings on data from IRS 990 forms, which foundations must file annually. Through this data, we identified nearly 70,000 nonprofits dedicated to scientific research. These organizations received close to 1 million grants worth over $30 billion in 2019 alone.

For example, the Bill & Melinda Gates Foundation, based in Seattle, focused 20% of its research funding on Washington State, even though only 2% of foundation funding overall supported that area. Similarly, the Lilly Endowment allocated 62% of its research funds to institutions in Indiana, where it is based. Meanwhile, the Dennis Washington Foundation exclusively funded research at universities in Montana, contributing more than $20 million.

This strong local focus is quite common in philanthropy. Yet, it contrasts with how researchers often work. Many health scientists collaborate on a national or global scale. The total annual funding of $30 billion from foundations is significant—it can match about half of the U.S. government’s annual spending on scientific research.

For context, the National Institutes of Health (NIH) has an annual budget of approximately $47 billion. The National Science Foundation (NSF) allocates around $10 billion. Additionally, other agencies, such as the Department of Defense, support scientific research, though it is difficult to calculate their total contributions.

Despite this extensive data, we still lack insight into the specific goals of many donations. Understanding the true impact of foundation funding on scientific and health research remains a challenge.