I stumbled on this fascinating insight on grants making organisations. I think it has huge implications for healthcare. Especially as scientists are bogged down with the grants “lottery”. There has been a distinct shift of traditional methodologies of grants (like for NIH) towards the “noire” style VC-mode funding. “Fail fast-Learn fast” or something thereof.
A large part of this write up ends up going in circles without clear lines of argument on “capital-allocation skills”. I will not fault the writer for being abstract on several occasions throughout the course of write up (you can be the best judge), but I will distillate it for the ideas.
Grant givers need better track records – by Rohit
The new organisations are often structured in order to not be bogged down by the needs for legitimacy and analysis paralysis that a lot of the older philanthropic organisations have. They are more comparable to venture capital firms, fully fascinated by the power law and aiming to ensure that projects with potentially huge outcomes don’t lose funding because the proven probability of success is small and/or illegible.
Power law for the uninitiated:
Power Law and Power Law Distribution – Statistics How To
The power law (also called the scaling law) states that a relative change in one quantity results in a proportional relative change in another. The simplest example of the law in action is a square; if you double the length of a side (say, from 2 to 4 inches) then the area will quadruple (from 4 to 16 inches squared). A power law distribution has the form Y = k Xα, where:
I don’t know how the VC firms are “fully fascinated by the power-laws”. Nevertheless, the author raises several important attributable points.
Some of the alumni like Danielle Strachman and Michael Gibson went on to create the 1517 fund, but this is the illegible benefits helping them out. If you think this is fine and enough, imagine what would’ve been the case were the Fellowships were 5x larger! Danielle and Michael would have had difficulty finding attributable investments that they can point to as the ones they sourced, diligenced, and invested in, with nary a clear ROI to show how good they are at their job!
How do organisations find the people to “fund-innovation” in the first place? VC firms, to my limited understanding, are front ends for investing money in companies for institutional investors and high net worth individuals. By earning their margins (and spurs), they offer outsize returns on investments for others. Hence, VC firms are invested in the whole life cycle of the start-up. Whether it’s conceptual (seed-stage) or increasing rounds of investment funding, its growth. How do they identify winners out of duds, then?
Can traditional grant giving organisations improve their processes and fund ideas? They rely on signalling to fund individuals based on publications, conferences, speaker engagements, recognised as “key opinion leaders”, etc., which means it is a process to be gamed. Do the organisations fund ideas, irrespective of the individuals? So how do we improve the scientific process (and healthcare) and what are the implications for healthcare professionals?
Innovation is incredibly difficult to label. Nobel prizes are like Oscars. There is a “prestige” attached, because it remains heavily biased for “western nations”. That explains its draw for other scientists, because ultimately, the key opinion leaders “re-hash” the truth. If there is a scientific schism (and a slow-down), it has to do with lack of ideas (and replication crisis) and execution into actionable goals.
Consider a simple example of molecular diagnostics. It is difficult, if not impossible, to find reliable controls or ones that can have applicability across geographies. It is heartbreaking to see “less-funded” public healthcare struggle badly with terrible histopathology reports, while referral centres struggle with the onslaught of specimens. Meanwhile, millions of dollars are chasing “crypto” and “NFT’s” and metaverse as “web3” with a complete disconnect from reality. The high cost of molecular diagnostics is a pointer towards investments in that direction to increase production and break the patent stranglehold that stymies genuine innovation and percolating to masses.
It is easy to pontificate from a western lens and see the problems from tinted glasses that obscure the world view and hence, understanding.
The following quote from the author is instructive:
To recognise the fact that someone did help find, source or award a grant to a worthy person/ organisation/ cause is to reward their ability to select someone. Maybe we should create an immutable record of people’s selections, done by each organisation, in order to help the teams working on these have a proven record of the stuff they did within the org.
I think there must be a clear understanding of how grant organisations, especially in the public sector, are held up for review. This is true for developing countries like India, where traditionally there is a deep disconnect between “research and industry”, unlike the West, which has structured mechanisms to “spur innovation”. Yet, if the biggest names in the VC world are chasing “ape-coins” and stepping up investments in own media verticals, it speaks volumes about their priorities.
Power law or no power law. Start-up innovation, while fanciful, might offer some respite, but there has to be a clear actionable goal towards “manufacturing” instead. Start up money should be invested in improving processes, understanding efficiency matrices, and identifying choke points in improving access to healthcare diagnostics.
RadOncNotes 