Research Budgets in Perspective 2020

Here is an updated post to help keep research budgets in perspective. We did this in 2012, and this is the 2020 edition.

Some things to note:

• The NYC school system runs a budget that is about the same as the entire NIH.
• R&D budgets at large companies dwarf the NSF budget.
• Large research universities run budgets around $3 billion per year. If they have a hospital, that number goes up.
• HHMI and Wellcome are small in terms of annual spending compared to these other examples. Imagine if Microsoft decided to add an HHMI-like arm of their R&D budget and outspend the actual HHMI. They could do so by increasing their annual R&D budget by less than 6%.
• The Gates Foundation is huge. They don’t have as much of a presence in basic biology as HHMI or Wellcome, so some in the Labrigger audience might not realize how much larger the Gates Foundation is.
• The Simons Foundation is smaller than HHMI, but not by as much as one might imagine. Simons already spends more than half of what HHMI spends per year.

• The private non-profits vary quite a bit in their annual budget-to-endowment/assets ratio. For example, Wellcome and HHMI each have annual spending that is less than 4% of their assets. But the Simons foundation is closer to 10% and the Gates Foundation spends an amount that is about 15% of their assets.
• University endowments are huge at a relatively small number of big name places. After the top 15 or so, the annual budgets are a significant fraction of the endowment (or larger than the endowment).
• Top billionaires can have net worths that dwarf the endowments of universities. However, major research universities have annual budgets that $3 billion or more per year. Most billionaires are not running those kinds of budgets. Most nonprofits are not either. The Gates Foundation is an exception.
• Some top billionaires could start their own universities, or rename existing ones. Lots of big name places got their start this way (Stanford, Cornell, CMU, Vanderbilt, Rockefeller, Brown, Duke). Imagine someone dishing out $1 billion for real estate and buildings, and then $8 billion for the endowment. Instant top research university. Well, instant after they built the buildings and hired people.
• Bezos has a lot of net worth. More than anyone else. For perspective, note that the US Department of Defense spends more than 4x Bezos’ net worth every single year.

Some additional notes:

• The Chan-Zuckerberg Initiative isn’t listed above. It’s an LLC, so they don’t do the same kind of reporting that non-profits and publicly traded companies do. However, there are some numbers in news articles. They have pledged $3 billion. Other details are unclear. For perspective, $3 billion is less than 1/10 of the NIH budget per year, but larger than most university endowments.
• The Allen Institute is also not listed above. A good portion of their operating funds are from the NIH. Paul Allen gave $0.5 billion to the institute during his life. His net worth was about $20 billion. Details on any funds from his estate going to the Allen Institute have not been publicly announced.
• An example outside of neuroscience for billionaire charity: the Michael & Susan Dell Foundation. Michael Dell has a net worth of over $30 billion. His institute has about $1.6 billion in assets. It spends about $0.15 billion per year. Not endorsing this particular charity, just providing another, hopefully somewhat representative, example of a charity that a billionaire set up.
• Government spending via the NIH and NSF far outstrips Wellcome, HHMI, Simons, CZI, Allen, etc. Still, Wellcome, HHMI, Simons and other institutes have outsize impact on neuroscience.

Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

Eisenhower, 1961

Endnote: One Gerald R. Ford–class aircraft carrier costs $13 billion. This isn’t the development cost, that’s separate. This is just to make one aircraft carrier. That amount of money could create a university with an endowment in the top 10. One additional aircraft carrier or one additional top-10 research university? This post isn’t generally about comparing military and research expenditures, but since we’ve already quoted Eisenhower once, we’ll recall this evergreen speech of his from 1953:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The of cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter with a half-million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. . . . This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.

Eisenhower, 1953

Sources:
https://www.hhmi.org/about/financials
https://wellcome.ac.uk/what-we-do/reports
https://www.schools.nyc.gov/about-us/funding/funding-our-schools
https://www.forbes.com/real-time-billionaires/
https://www.oregonlive.com/business/2019/11/what-happened-to-paul-allens-billions-a-year-after-his-death-its-not-clear.html
https://www.macrotrends.net/
https://www.mpg.de/facts-and-figures
https://www.msdf.org/about/financials-policies/
https://www.gatesfoundation.org/Who-We-Are/General-Information/Financials
https://cfo.berkeley.edu/budget-101
https://web.mit.edu/facts/financial.html
https://annualreports.simonsfoundation.org/2019/financials/
Wikipedia