“Innovation is like a truffle”. This is one of the many insights that I have been chewing on since I returned from Philea’s Research Forum conference in Milan, hosted by Fondazione Cariplo. Truffles are known to be notoriously difficult to grow, and a lot of patience is needed as there are no guarantees of success. Truffles’ growth cannot be planned. Their growth can only be encouraged by creating the right conditions, and the right ecosystem. 

So, what is the point of reflecting on how philanthropy is supporting innovation? Why organise (yet another) conference to discuss bad habits with the ambitious agenda of providing examples of how to break siloes and learn from mistakes? 

It appears as though foundations have quite a lot to say in terms of ecosystems: increasingly, they operate alongside public authorities, universities, and the private sector becoming an integral part of the innovation ecosystem at the local level. They are “ecosystem activators” in the sense that they broker relations because of their deep knowledge of the territory and its stakeholders as well as their ability to act as guarantees and backers of promising teams and projects. In a context in which philanthropy is increasingly visible yet increasingly questioned (Rien Van Ghent, 2023), some foundations are generating opportunities for dialogue between different actors, including academia, research, and the market at both local and international levels, indicating a broadening of their scope and impact beyond local initiatives. 

For example, Fondazione Cariplo has secured a partnership with Berkley University to create SkyDeck Europe designed for accelerating startups from anywhere in the world who are focused on getting traction and fundraising in Europe. The Novo Nordisk Foundation actively works to build an innovation ecosystem that involves stakeholders from academia, industry, government, and other sectors: the life-science ecosystem in Denmark encompasses the entire value chain from basic research to scientific application, aiming to foster innovation and scientific breakthroughs. This ecosystem approach fosters collaboration, knowledge exchange, and resource sharing, creating a fertile environment for innovation to thrive and allowing us to move away from another recurrent bad habit: working in siloes. 

Innovation – like truffles – thrives in fertile ecosystems and ecosystems are a lot about relations. Philanthropy is about people, and foundations are ecosystem activators because of their capacity to engage stakeholders at all levels. Foundations are very well-equipped to bring people together because of their deep knowledge of territories, fields, and participatory methodologies. Stakeholders are brought together for listening purposes (via various forums and individual consultations), throughout the research process to ensure that the resulting innovations meet genuine market demands or by fostering collaborations closer to the market to explore pathways to commercialisation. 

Does a project address gaps in healthcare and serve marginalised patient communities? Does it explain how it will improve the quality of life or access to healthcare services especially for vulnerable populations?

For example, Fondazione Compagnia di San Paolo supports the initiative of Local Authorities by funding research and innovation projects whereby these serve as complementary areas of collaboration. The engagement of the foundation in supporting the transition of the City of Torino towards climate neutrality also demonstrates their capacity and willingness to translate European-level developments, such as the European Mission on Smart and Climate-Neutral Cities, into actions and opportunities at the local level, particularly concerning the non-profit sector and the common good. 

In Milan, we learned about the shifting role of European philanthropy “from donorship to ownership” of the processes that underly innovation. Foundations are broadening the scope of their action, increasingly looking into the innovation side of the spectrum while maintaining their support of basic research. This balanced approach reflects the recognition of the importance of both advancing scientific knowledge and translating that knowledge into practical applications. 

The latter is done with a specific approach: an eye for the social impact of scientific breakthroughs which translates, for example, into “La Caixa” Foundation’s commitment to incorporate a social dimension into their evaluation process. Does a project address gaps in healthcare and serve marginalised patient communities? Does it explain how it will improve the quality of life or access to healthcare services especially for vulnerable populations? Does it have a commercialisation plan that ensures equitable access to resulting products or services? 

Philanthropy is increasingly supporting innovation and is doing so with a toolkit that is getting wider, ranging from capital to non-capital support. Across the spectrum of capital, they support through grants, equity as well as investments. An inspiring example is MAZE Impact, an investment firm that offers both financial and non-financial tools to “everyone committed to delivering positive social and environmental outcomes”. The firm was founded by the Calouste Gulbenkian Foundation which mobilised a part of its endowment to create the impact investment firm. 

To respond to a growing range of innovative projects, Fondazione Cariplo has diversified its funding schemes, particularly in the area of startup acceleration platforms. They have launched initiatives like the Fondazione Social Venture Giordano Dall’Amore aimed at the promotion of impact investing culture as well as social innovation which can be seen as an ambition to break an additional barrier: between finance and a return on investment that embraces both patience and an attention to positive social change. 

In addition, foundations have started to provide non-capital support, moving away from their role of grantmaking only. There is a myriad of examples that illustrate how some foundations in Europe are adopting a comprehensive approach to innovation that encompasses access to expertise, advisory and mentoring services as well as networking opportunities, showcasing once again the ambition to leverage their relational assets in addition to the more obvious monetary and financial ones. Often, capacity-building and talent development take place across the spectrum, from basic research to technology development, leading to the balance between research and innovation that is seen as a unicum. 

A clear picture emerges from the conference in Milan: foundations have a unique way of transitioning scientific breakthroughs into marketable innovations. This unique opportunity puts equity and social impact at the core of the value-adding process because philanthropy’s understanding of it is driven by values and uses a value-based framework rather than a purely economic one to evaluate if an opportunity is worthwhile supporting.

“It is much more difficult to instil social and environmental values in an established company than in a new product, process, service, or organisation that has taken these values into account in its business model from the very beginning”, said Stephan Rauscher, founder of Early Bird Venture Capital, reminding us of the importance of generating new products and services that have equity at their core from the onset. 

We are still lacking comprehensive data on philanthropy’s support for research and innovation (the latest pan-European research is ten years old). At Philea, we are committed to bridging the knowledge gap alongside understanding what was missing in Milan: specifically, the need to build a dialogue with foundations supporting innovation in the social and cultural fields. This seems to be the hardest barrier to break between science and culture. 

Ilaria d’Auria is the Head of Programmes – Thematic Collaborations at Philea.