Frequently asked questions on the charity research support fund (CRSF)

This set of Questions and Answers are designed to provide AMRC members, and others, with useful background information on the sustainability of charity-funded university research in the UK, including the role of the Charity Research Support Fund (CRSF) and support discussions making the case for support with key decision- and policy-makers to ensure charity-funded research in universities is sustainable.  

Questions:

Background

1. Why is charity funded research vital to the UK’s research base?
2. Why is it important to charities that research in UK universities is sustainable?
3. What are the concerns about the sustainability of university research in the UK?

Charities and costs of research

1. Which research costs do charities pay? 
2. Which costs don’t charities cover? 
3. Why do charities support certain costs and not others? 
4. How much of the full costs of research do other funders pay?

Charity Research Support Fund (CRSF)

1. What is the Charity Research Support Fund (CRSF)?
2. Why is the CRSF so important to charities?
3. When and why was the CRSF introduced?
4. What is the value of charity research support? 
5. How is the CRSF calculated and allocated? 
6. The CRSF is England only. What about the devolved administrations?  

The nature and function of the Fund

1. What will happen if the partnership funding from government does not increase in line with charity spend?
2. Do charities pay higher full economic costs (fEC) in research institutes?
3. Doesn’t mainstream QR already cover university research overheads? 

Questions and answers:  

Background

1. Why is charity funded research vital to the UK’s research base?

In 2022, members of the Association of Medical Research Charities (AMRC) invested almost £2 billion in UK research. But charities bring much more than money to the sector – patient priorities drive and shape charity research so that funding is directed to where it will make the most difference to people’s lives; charities tackle areas of unmet need including neglected conditions and rare diseases, and they accelerate impact by building partnerships and attracting funding for promising research that delivers benefits to patients as soon as possible.

2. Why is it important to charities that research in UK universities is sustainable?  

UK universities are renowned for conducting world-leading research and providing a high-quality education to students. The links between the medical research charity and university sectors are strong – in 2022, 85% of AMRC member grants were awarded UK[1]. The long-term sustainability of university research is therefore a key priority for all AMRC members.

3. What are the concerns about the sustainability of university research in the UK? 

Both research and teaching are expensive endeavours. Over the last few years, the university sector has been experiencing an acute funding crisis, with a ‘triple whammy’ of increased inflation and escalating delivery costs, the plummeting value of domestic tuition fees and volatility in the international student market.

University research is also underfunded against its full economic costs, and on average receives 70% of the full cost from funders. The most recent annual Transparent Approach to Costing (TRAC) return for 2021-22 shows a sector aggregate deficit of £4.5 billion for research (graph below). Consequently, universities are relying on cross-subsidy across their portfolio of activities, mainly from international student fees, to make up some of the shortfall, which is becoming less possible with pressures on both research and teaching.  

Graph 1: TRAC full economic cost surplus/deficit by activity, 2021-22 (higher education institutions in England and Northern Ireland)

Source: Transparent Approach to Costing (TRAC) return for 2021-22

Charities and costs of research 

1. Which research costs do charities pay? 

Directly incurred costs. Charities pay for the directly incurred cost of research. These costs are charged directly to a project and are supported by an audit record. Examples include project-specific staff costs, consumables, travel and equipment.

Directly allocated costs. Charities may cover some directly allocated costs, if they are in line with their charitable mission. These refer to costs that are shared across multiple activities. For example, a proportion of a lead investigator’s or technician’s time, animal housing or open access publishing. 

Beyond these costs, charities make a number of strategic infrastructure investments in universities and beyond. This includes support for centres and institutes based in a university, investment in research facilities and equipment, investment in research assets such as registries, cohort studies or tissue banks, and provision of training programmes.

2. Which costs don’t charities cover?

Indirect costs. Charities do not usually cover the indirect costs of research because of the way that they provide funding and their charitable objectives. These are non-specific costs charged across all research projects for underpinning resources. Indirect costs are diverse, and examples include estates, shared IT and administration, university HR costs, and library services. 

3. Why do charities support some costs and not others? 

We believe that it is ultimately the role of government to support the fundamental building blocks that underpin UK R&D. This enables others – including charities – to collaborate and invest with confidence.

Funders supporting research in UK universities have different priorities, levels of resource and objectives. Charities differ from other funders in the way that they obtain their income. They are independent from government and their mission is to support research for public benefit that will improve health and wellbeing. Charities must take into account the expectations of their donors and the needs of their communities, including patients and the public. Charities also have a legal duty to ensure that their activities support and are consistent with their purpose, as set out in their Charitable Objectives.  

Charities exist because of donations from the public and philanthropists – medical research remains among the top 3 causes that people donate to. When people donate to charities, they expect their money to be spent on research that is focused on relevant areas and will ultimately benefit patients. In fulfilment of these wishes, charities fund the directly incurred costs of research, as well as other costs when they are in line with their mission and charitable objectives. 

4. How much of the full costs of research do other funders pay? Are charities the only funders that don’t pay all the costs of research? 

Full economic costing (fEC) is a government-directed standard approach that aims to capture all of the running costs of a research project. fEC is calculated using the Transparent Approach to Costing (TRAC) methodology. 

The majority of costs that contribute to a project (including indirect costs) may be included in Research Council grant proposals and fellowship applications. However, if a grant is awarded, funding is based on 80% of fEC. TRAC analysis for 2021/22 shows the average fEC recovery to universities from a variety of funders. As shown below, no funder is currently reaching the 80% fEC level.

Charity Research Support Fund (CRSF)

1. What is the Charity Research Support Fund (CRSF)? 

The Charity Research Support Fund (CRSF), and its equivalents in the devolved nations, is a block grant allocated to universities via Research England on an annual basis. This supports charity-funded research in universities and contributes to the indirect costs of research that charities do not cover.

2. Why is the CRSF so important to charities?  

The CRSF is a partnership between charities and government – and it is an important signal of the value that the UK places on charity-funded research in universities. The existence of the CRSF makes the UK a uniquely attractive environment for charitable investment, incentivising home-grown charities to support university research in the UK rather than funding overseas. It also enables charities to invest in-line with their mission and charitable objectives.

3. When and why was the CRSF introduced? 

Charities have funded research in UK universities in partnership with government for almost two decades. The CRSF was first put forward in the Labour Government’s 2004 Science & innovation investment framework 2004 – 2014 in recognition of the importance of charity-funded research. The Fund was set up in 2006. 

The framework said that: “Government has worked closely with the Wellcome Trust, involving other leading medical research charities through the Association of Medical Research Charities, to develop a partnership agreement which will provide the basis for working together towards fully funding research in UK universities.” 

The use of the Transparent Approach to Costing (TRAC) methodology was extended to introduce an approach to costing research projects on a full economic cost (fEC) basis. The CRSF enabled universities in receipt of charity grants to recover a higher level of fEC.  

4. What is the value of charity research support?  

The CRSF has been stagnant - and in real terms has declined in value - over the past decade (see Graph 2). The Fund was worth £135.5 million, in 2006, when it was set up. It was supposed to reach £270 million by 2010-11 but it has yet to reach that, with the current value of the fund only £219 million. During this time, it has only received a modest increase on two occasions: £6 million additional investment in 2018/19, and £15 million in 2022.

Overall research spend by charities has increased since the introduction of the CRSF. In 2010, medical research charities invested £1.05 billion in research in the UK, this rose to £1.99 billion in 2022. This increase has largely been driven by a small number of larger charities. 

Graph 2: Government support of charity-funded research in universities has not kept up with charity research funding 

Source: Higher Education Funding Council for England (HEFCE) data used for distribution of CRSF. Charitable income is averaged by HEFCE (average of previous 4 years) rather than actual income.

5. How is the CRSF calculated and allocated?  

To be eligible for the CRSF, income from charities must be awarded through ‘expert’ or ‘peer’ review and open competition. The expert review requirements of full AMRC membership enable research funded by our full members to be eligible for the CRSF.  

To receive CRSF, universities report the research income they have received from charitable sources annually to Research England. CRSF allocations are calculated pro-rata to research income in the most recent four-year period i.e. if a university secures 10% of England’s competitively-won charity research income, they will be allocated 10% of the CRSF[3].  

The CRSF, as part of non-mainstream QR (see below),  is specifically intended to boost charity grants to a similar base level as other funders

6. The CRSF is England only. What about the devolved administrations?  

The four national higher education funding bodies each administer a charity support element as part of the block grant they allocate to universities. 

In Scotland, the Scottish Funding Council (SFC) administers charity support as part of its Research Excellence Grant (REG). Part C of the REG is allocated for charity support. Since Academic Year 2022-23, the percentage of funding allocated through REGc has been increased from 11% to 13%. SFC allocated £32 million to REGc in the 2023-24 academic year. 

In Wales, since the 2022-23 academic year, the charity support stream is set at 10% of the total block grant funding that is allocated to universities from the Higher Education Funding Council for Wales (HEFCW). 

In Northern Ireland, the total charity support awarded by the Department for the Economy was just under £3.4 million in 2022/23. 

The nature and function of the Fund

1. What will happen if the partnership funding from government does not increase in line with charity spend?  

If the CRSF does not increase in line with charity spend, universities would have to cover more of the costs not covered by charity funding. In the current fiscal climate, this is not feasible. As a result, less charity-funded and mission-driven research would take place in the UK. Without charity funding, the UK health research sector would be less dynamic and less productive, progress at crucial stages of the research pipeline would slow, research into many rare diseases would decrease and underfunded conditions would lose crucial research investment. Without the CRSF, it would become harder for universities to accept charitable grants for research. Science is also a global endeavour – without the CRSF, there would be less incentive for charities to fund research in the UK. 

2. Do charities pay higher fEC in research institutes?  

A number of larger medical research charities have played a role in the establishment of research institutes such as the Wellcome Trust Sanger Institute and the Francis Crick Institute. Charities also invest in existing research institutes such as the Babraham Institute. These institutes are not eligible for the CRSF as they are not universities.  

In these cases, the charity has identified a specific unmet need and/or gap in the research landscape and therefore, in order to address their mission, has chosen to make a targeted investment in a research institute. This is generally only an option for larger charities with larger research budgets.  

3. Doesn’t mainstream QR already cover university research overheads? 

The UK has a unique system of supporting university research termed the dual support system. This channels public funding for universities through a combination of project-specific Research Council grants and strategic institutional block funding (known as quality-related research (QR) funding in England). QR (and its equivalents in devolved nations) can be used flexibly by universities to support their own research priorities and to invest in talent and infrastructure. Although not its sole purpose, QR funding is also used to cover some of the full economic costs of research projects. QR funding is allocated retrospectively via the Research Excellence Framework (REF) – where universities submit their premier outputs for assessment. It is important to note that QR funding recognises and rewards outputs supported by a diversity of funders including charities. Despite its vital role in underpinning UK research, the value of QR funding has been eroded over time - its value declined by 14% in real terms between 2010/11 and 2020/21. 

For further information or queries, please contact Mehwaesh Islam, [email protected].