Europe Sees Philanthropy as Crucial to Fueling Scientific Innovations

European philanthropy can play a vital role in bolstering science across the continent, but foundations and other donors must be prepared to take risks, speakers at a conference here last week told participants.

The event brought together about 120 foundation, government, and university officials to discuss how charitable giving can support one of the European Union’s top priorities: to reclaim its position as a scientific powerhouse to help make its economy more competitive with Asia’s and North America’s.

The conference was organized by the European Commission, the union’s executive body, and the European Foundation Centre, an association here of about 200 grant makers.

This year, the commission issued a proposal called the European Research Area, a plan to improve technology education, support research institutions, and attract leading scientists from other parts of the world.

Foundations and other donors are key to its success, Janez Potocnik, European commissioner for science and research, said at the meeting.

“I am convinced that philanthropic funding will play an increasingly important role in the European Research Area,” Mr. Potocnik said.

Wilhelm Krull, chairman of the European Foundation Centre, encouraged foundations to spur “fresh thinking” by backing experimental biology, engineering, and other sciences, and supporting them for periods of longer than two to three years.

While charitable assets are far less than what governments provide to universities, grant makers can move more quickly to support risky propositions.

“Private foundations do not have to wait for political consensus,” he said.

While university leaders at the conference applauded the idea of attracting more donors to their research programs, they acknowledged that they need to hone their fund-raising skills.

Historically, many universities in the 27-nation European Union have existed solely on government funds.

The European Commission gathered a group of university rectors, philanthropy scholars, and fund raisers, including a few from the United States, to study how to wean them off the government dole.

The organization, the Expert Group on Fundraising by Universities From Philanthropic Sources, released its findings at the event.

In some ways, the panel’s report is Fund Raising 101. It introduces concepts like alumni relations, cultivating donors over several years, and spending money first on development offices before trying to raise money.

But despite being novices, some colleges have succeeded in raising money from private sources.

The Karolinska Institute, in Stockholm, in three years has achieved half of its goal to collect $162-million by 2010, the medical-research university’s 200th anniversary.

Harriet Wallberg-Henriksson, the institution’s president, said the effort was not easy in Sweden, where residents are used to being taxed to support universities.

“You have to sell yourself,” she said. “This is not something you can do with your left hand. It takes time.”

Indeed, William Wakeham, vice chancellor of the University of Southampton, in Britain, emphasized that university leaders may need to develop new talents to be successful fund raisers. They need “an ability to get on with anyone in the world and pretend that you like them, which isn’t easy,” he said to laughter.

During the event, grant makers spoke of challenges similar to those faced by their American counterparts — how to make sure private money does not take the place of government aid; how to measure results; and how to use limited resources to create big breakthroughs.

But an additional challenge European funds face is a burdensome tax structure, several speakers said.

The biggest problem is the EU’s value-added tax, which applies a cost as high as 25 percent to most goods or services. While it is similar to a sales tax, companies are able to offset what they owe governments, but foundations cannot.

The tax hurts the ability of philanthropies to support medical research and drains their charitable assets, said Eleanor Boddington, a lawyer for the Wellcome Trust, in London.

The trust, which is one of Europe’s wealthiest nonprofit organizations, donates about $1.17-billion to research into human and animal health, but pays about $18.3-million in value-added taxes on products and services it buys to conduct its operations.

“We could do a lot with that money,” she said.

Albert Raedler, an administrator for the Taxation and Customs Union Directorate-General of the European Commission, said the organization is trying to ease the tax burden on nonprofit groups. But, he said, ultimately it was up to the countries of the European Union to change the system.