Catch Your Insight
  • Investing
  • Tech News
  • Stock
  • World News
  • Editor’s Pick
Editor's PickInvesting

Can Private Foundations Replace Federal Funding of University Research?

by April 17, 2025
April 17, 2025

Jeffrey Miron and Peter Van Doren

From Peter Van Doren:

My colleague Jeffrey Miron recently argued that the federal government should not fund research. Here I ask a slightly different question: Are the assets of foundations sufficiently large to replace federal support of university research?

In 2023, federal research expenditures at universities were about $60 billion (Table 1). Given the typical 5 percent spending rule of university and nonprofit endowments, the $60 billion in annual expenditures would require $1.2 trillion in private assets in addition to the $134 billion in assets (6.7/.05) used to fund the current nonprofit annual contribution of $6.7 billion (Table 1) to university research.

Total assets of nonprofit foundations that disburse grants are about $960 billion (Page 3); $134 billion is already dedicated to funding university research and development, so that leaves us with $826 billion in assets that could fund about $41 billion. That leaves us about $19 billion (about one-third) short in annual grants. And the $41 billion annual flow would require all private foundations to fund nothing other than university research. 

Jeffrey Miron comments:  

These facts are Interesting; I am happy to learn that foundation assets are this large. These data do not, however, necessarily imply that government should fund research.

First, foundations are not the only possible replacement for government funding; private, for-profit firms can (and already do) fund many types of research at universities.

Second, not all research is the kind that “generates externalities,” meaning it creates new and useful but hard-to-patent ideas that underlie “marketable” research. For applied research, no matter how interesting, the case for government funding does not apply.

We thank Cato interns Austin O’Connell and Preeti Kulkarni for their assistance.

previous post
Fancy Houses, Wealth Inequality, and a Lesson in Humility
next post
Trump Wants Even More Military Spending

You may also like

Week Ahead: NIFTY Stays In A Defined Range;...

May 31, 2025

Breakouts, Momentum & Moving Averages: 10 Must-See Stock...

May 31, 2025

Leadership Rotation Could Confirm Corrective Phase

May 30, 2025

Run Your Stock Portfolio Like a Pro Sports...

May 30, 2025

Large-Scale Food Stamp Fraud

May 30, 2025

Texas Embraces Medical Talent—Unless You’re from the “Wrong”...

May 30, 2025

Friday Feature: Solstice Hybrid Academy

May 30, 2025

Record Student Visa Denials Before Trump: 41 Percent...

May 30, 2025

Cato’s Contributions to Justice

May 29, 2025

The Historical Ratio Between Dropout and High School...

May 29, 2025

    Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    Recent Posts

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • Large-Scale Food Stamp Fraud

      May 30, 2025
    • About us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 catchyourinsight.com | All Rights Reserved

    Catch Your Insight
    • Investing
    • Tech News
    • Stock
    • World News
    • Editor’s Pick