Sean Li, PhD, is having a hard time
sleeping these days. He studies the
cellular and molecular bases of forming a kidney in the Department of Urology at Children's Hospital Boston, and weighing on his mind are two grant applications under review at the National Institutes of Health (NIH). The outcome will dictate his laboratory's—and his staff's—immediate future. It's become harder and harder to win these grants, and it's unclear what relief the recently signed federal stimulus bill will provide. Other sources of research funding seem less attainable in the current economy than they were just a few months ago.
Li isn't alone. All over the country, researchers who depend on a delicate balance of government, philanthropic and corporate funds to do their science are watching the economic downturn with concern. "This is what we talk about over lunch and in faculty meetings," says Li. "We worry."
In his inaugural address, President Obama pledged to "restore science to its rightful place." And in February, the American Recovery and Reinvestment Act of 2009 was signed into law, with $10.4 billion of investment in the NIH. But even as researchers scramble for the new stimulus money, they remain concerned: What will happen once the funds are spent?
As endowments, venture capital and companies are squeezed in a severe economic recession, many worry that alternative sources of funding—like philanthropy and corporate financing—are at risk. "No matter where you look at a source of research funding, it's under pressure," says Sandra Fenwick, Children's president and chief operating officer.
All indicators would seem gloomy for philanthropy: Stock values have dropped precipitously, institutional endowments are shrinking and unemployment is rising. But historical data defy conventional wisdom. Adjusted for inflation, philanthropic giving has grown each year but one over the past four decades, despite swings in the stock market. Fewer than half of all charities saw a decline during recession years. In 2007, charitable giving reached an estimated $306 billion; 2008 numbers aren't yet available.
"The question is, will this year be different?" asks Janet Cady, president of the Children's Hospital Trust, the hospital's fundraising arm, where a watchful eye is kept on giving trends. She believes it's too early to tell, but points out that during crises, donors often look to what is really important to them, and can actually be more generous. "They are often more empathetic and think about giving as a way to make a difference," she says.
Leonard Zon, MD, director of Children's Stem Cell program, hopes Cady proves correct. Research institutions often rely on philanthropic money for their most creative, long-range and unconventional projects, and it's those types of projects that could be in trouble during a financial crunch. "When budgets are limited, there's a temptation to become more conservative, with the budget but also with the science," Zon says. "I think that's the wrong approach. The science is at its peak, and discoveries are being made almost on a monthly basis."
The Stem Cell program is largely funded by philanthropy, and Children's is making its sustenance a priority, believing that the program's goal—to develop cell-based treatments for disease within seven years—is attainable and well worth the expense.
"Major discoveries take place when people take bold approaches to their science," says Zon. "You should try to do something that will change the world." (For more on Children's stem cell efforts, see this related article.)
At Children's Technology and Innovation Development Office (TIDO; formerly the Intellectual Property Office), Director Erik Halvorsen, PhD, works closely with the pharmaceutical and biotechnology industries to translate Children's research discoveries into new drugs, diagnostic tests and medical devices. Collaborations and licenses through his office have produced nine major products that are now in clinical use, including a medical device to close holes in the heart and two cancer therapies.
In more prosperous times, research institutions often partnered with companies to carry promising laboratory findings into preclinical and clinical development—a lengthy and expensive process. But the economic climate is evaporating interest in early-stage technologies. "Companies are downsizing not only in terms of people, but in terms of what programs they're supporting," says Halvorsen.
Children's faces additional challenges since the pediatric market is relatively small. The hospital recognized that interest was waning even before the current economic crisis, and recently launched a Technology Development Fund to help advance its innovations to a more mature stage of development.
Through a combination of internal awards and outsourcing to contract research organizations, the fund will allow the hospital to assume some of the risk and offer more attractive deals to industry. "Before, we thought this fund would help open more doors," says Halvorsen, "but now it's necessary to open any doors."
But Halvorsen also sees possibility: Limited capital and the need to maintain a diverse product portfolio might make collaborations with academia a cost-effective way to test out new scientific ideas. "Companies need the next innovation to add to their pipeline," he says. "Instead of hiring 20 scientists and building a new wing on their building, it's cheaper for them to partner externally with the thought leaders in that particular area."
The squeeze on research funds may be felt most by scientists on the cusp of independent careers, those whom Isaac Kohane, MD, PhD, director of the Children's Hospital Informatics Program, calls the "seed corn generation." Without NIH "RO1" grants, which help cover the overhead costs of running a lab, young investigators may be hard-pressed to find secure research positions.
"You plant the seed corn to grow the next generation," says Kohane. "If individuals who have just finished a long and arduous training are not able to get funding, they will leave research. And if we lose this crucial group, there will be a five- to 10-year hole where you will have a bunch of aging research leaders and no one immediately following. That's a huge loss for the advancement of science and for national competitiveness."
Like Halvorsen, Kohane also sees opportunity in the economic crisis: Government may evaluate its essential roles and conclude that health care is likely to remain a growth industry as the population ages and needs more health services.
"If we can't be competitive, we'll be missing an opportunity to take care of our own populations, and to lead in delivering the best health care driven by the best health care discoveries," says Kohane. "Research is a long-distance run. There's no corporate business plan that can support it, but the government has every reason to."
Often overlooked is the more immediate economic growth spurred by biomedical research. Nationally, NIH funding created and supported more than 350,000 jobs in fiscal year 2007, generating wages above $18 billion. Each funding dollar also generated more than twice as much in state economic output, on average, according to a recent report by Families USA.
"Health care and the life sciences comprise the number one industry in Massachusetts," says Joshua Greenberg, director of State and Federal Relations for Children's Office of Child Advocacy. "When you fund research, you fund jobs, construction of research facilities and ultimately the commercialization and sale of products. All of that has a downstream impact on state and federal revenues."
There's another opportunity in the midst of crisis: the chance for research institutions to evaluate how they do business and to reconnect with core goals. Despite the economic downturn, Children's has made new investments in both space and recruits. "We have people who are on the verge of doing fabulous work in genomics, genetics, neurobiology, vascular biology and cancer, among other places," says Fenwick. "They're producing unbelievable new discoveries and applications, which we believe will lead to major benefits down the road."
Limited resources are nothing new to scientists. Marsha Moses, PhD, interim director of the Vascular Biology program at Children's, remembers the early 1990s, when it was similarly difficult to get funding. "There are always waves of prosperity and then downturns," Moses says. "When the NIH budget increased under President Clinton, people were able to do their science and sleep all at the same time."
But Moses and others note that the current economic downturn comes at a time when powerful new laboratory technologies have put a wealth of discoveries within reach. "It takes intellectual courage to ask the questions that push the frontier," Moses says. "Now that we've got these questions and these powerful technologies, a healthy infusion of dollars will guarantee we can really exploit them."