When a research administrator says “the funder,” the reflex assumption in the United States is usually a federal agency — NIH, NSF, or one of their peers. But a substantial share of biomedical and health research funding comes from a different category entirely: large private foundations and nonprofit medical research organizations that operate outside the federal grant system, with their own eligibility rules, review processes, and post-award obligations. This guide surveys that category — who the major funders are, how their grant-making differs structurally from federal agencies, and what the differences mean for the administrators and investigators who work with them.
What Makes Private and Nonprofit Funders a Distinct Category
Private and nonprofit medical research funders share a few structural features that set them apart from federal agencies, even though individual funders vary widely in size and focus:
- They are not bound by federal grants regulation. Awards from a private foundation are not federal financial assistance, so the Uniform Guidance (2 CFR Part 200) does not apply by default, and funds from a purely private foundation source do not count toward the federal-expenditure threshold that triggers a Single Audit. Each funder instead sets its own terms and conditions, which can be more restrictive, less restrictive, or simply different from federal rules on the same point.
- Indirect cost recovery is usually capped, and often capped low. Where federally negotiated F&A rates commonly run well above 50% of modified total direct costs at research universities, many private medical research funders cap recoverable indirect costs at a flat percentage far below that — commonly in the 10–15% range, sometimes lower, regardless of an institution’s actual negotiated federal rate. Institutions typically absorb the difference rather than declining otherwise-fundable awards.
- Some fund people, not just projects. Federal mechanisms are overwhelmingly project-based: an investigator proposes a specific aim and budget, and the award funds that scope. Some of the largest private medical research funders instead fund investigators directly, with substantial discretion over how the money is used within their research program, for a period of years rather than a single project cycle.
- Review processes are funder-specific, not standardized across a peer group. There is no cross-foundation equivalent of the NIH Center for Scientific Review or a common study-section system. Each major funder runs its own peer review or committee process, and the criteria weighted most heavily — scientific merit, mission fit, career stage, geographic distribution — vary by funder in ways a federal Notice of Funding Opportunity does not.
Major Private and Nonprofit Medical Research Funders
The following are among the largest and most institutionally significant private and nonprofit funders of biomedical and health research that a US research administrator is likely to encounter. This is not an exhaustive list — thousands of smaller disease-specific foundations also fund research (see the pattern discussed below) — but these four illustrate the structural range within the category.
Howard Hughes Medical Institute (HHMI)
HHMI is a medical research organization, not a grant-making foundation in the conventional sense: its flagship program, the HHMI Investigator Program, funds scientists rather than discrete projects. Selected investigators become HHMI employees for a renewable, multi-year appointment (traditionally seven years), typically remaining based at their home university while HHMI covers their salary, benefits, and a substantial, flexible research budget for the appointment period. Because the funding follows the person rather than a specific aim, investigators have latitude to change research direction mid-appointment without submitting a new proposal — a structure deliberately different from the aims-and-milestones logic of an R01 or comparable project grant. HHMI, together with the Wellcome Trust and the Bill & Melinda Gates Foundation, also jointly runs an international early-career scientist program aimed at developing research talent outside traditional funding hubs.
Wellcome Trust
Wellcome is a UK-based charitable foundation and one of the largest funders of biomedical and health research globally, funded from an independent investment portfolio rather than government appropriation or member dues. Its funding spans discovery research, population health, and infectious disease and climate-health programs, including consortium-level grants supporting research capacity in specific regions such as sub-Saharan Africa. Because Wellcome is UK-domiciled, US institutions most often encounter it as a subaward partner or collaborator on a Wellcome-funded international consortium rather than as a direct primary awardee, which raises the same cross-border subrecipient and reporting questions that arise with any non-US funder relationship.
Bill & Melinda Gates Foundation
The Gates Foundation funds global health and development research at very large scale, with a grant-making model that leans more heavily on foundation-defined strategic priorities and solicited initiatives (its ‘Grand Challenges’-style calls, for example) than on a standing, always-open unsolicited proposal mechanism comparable to NIH’s parent R01 announcement. Its research funding sits alongside a much larger global-development grant-making portfolio, and Gates-funded research awards commonly carry foundation-specific terms on open-access publication and data sharing that go beyond what most federal funders currently require.
American Cancer Society (ACS)
ACS is representative of a different funder archetype: the large disease-specific nonprofit that runs an extramural peer-reviewed grants program structured much like a federal agency’s, funded by public donations and fundraising rather than a private endowment. ACS’s Extramural Discovery Science program organizes applications into defined priority research areas (spanning cancer causes and etiology, screening and diagnosis, treatment, survivorship, and health equity across the cancer control continuum) and routes each application to one of several disciplinary peer review committees, a structure that closely parallels an NIH study section even though ACS is not a federal agency. This disease-specific, donation-funded, peer-review-structured model recurs across dozens of other US medical research charities — the American Heart Association, the Juvenile Diabetes Research Foundation, and the Michael J. Fox Foundation for Parkinson’s Research among them — each organized around a single disease or condition with its own priority-setting process, rather than around a broad federal mission area.
How Foundation Grant-Making Differs From Federal Grant-Making, Practically
For an investigator or administrator moving between federal and foundation funding on the same portfolio, the practical differences tend to cluster around a few recurring points:
- Indirect cost recovery. Budgeting a foundation-funded project against an institution’s full federally negotiated F&A rate is usually not realistic; expect a foundation-specific cap, and confirm it before the budget is built rather than after the award terms arrive. See CASRAI’s coverage of the parallel dynamic on the federal side in NIH’s proposed 15% indirect cost cap, which drew explicit comparisons to the indirect-cost caps long used by major private funders.
- Gift vs. grant classification. Not every private foundation payment is a grant in the sponsored-programs sense; some are structured and administered internally as gifts, which changes which office (development vs. sponsored programs) owns the relationship and what compliance obligations attach. Institutions vary in exactly where they draw this line, and it is worth confirming early for any new foundation relationship.
- Audit and reporting scope. Because most private foundation funds are not federal financial assistance, they typically fall outside Single Audit scope and outside Uniform Guidance cost-principle requirements as a matter of federal law — though a foundation’s own award terms can still impose comparable requirements contractually. Compare CASRAI’s federal contracts vs. grants guide for how the federal side of this distinction works.
- Budget justification conventions. Foundation budget templates and justification expectations are rarely as standardized as an NIH or NSF budget form; see CASRAI’s general guide to writing a budget justification narrative for the underlying principles, which still apply even where the specific form differs.
- Who manages the relationship. Because there is no unified national system comparable to Grants.gov or eRA Commons for private funders, day-to-day relationship management (deadlines, portal logins, reporting templates) is often more manual and more dependent on institutional knowledge than the federal equivalents — part of why the role described in CASRAI’s overview of what a research administrator does extends into tracking these funder-specific conventions individually.
Frequently Asked Questions
Are private foundation grants subject to the Uniform Guidance (2 CFR Part 200)?
Not by default. Uniform Guidance applies to federal financial assistance; a grant from a private foundation using its own (non-federal) funds is not federal financial assistance, so the Uniform Guidance’s cost principles and administrative requirements do not automatically apply. A foundation can still choose to impose similar or stricter requirements through its own award terms, and institutions commonly apply their standard federal-grant compliance practices to foundation awards anyway for consistency, but the legal trigger is different.
Do private medical research funders use the same F&A rate as federal agencies?
Generally no. Most major private and nonprofit medical research funders cap recoverable indirect costs at a fixed percentage of their own choosing, independent of an institution’s federally negotiated rate, and that cap is very often lower than the institution’s federal rate. Confirm the specific funder’s policy before budgeting rather than assuming the federal rate carries over.
What is the difference between HHMI’s model and a typical NIH grant?
An NIH R01 funds a specific, peer-reviewed research project with defined aims and a budget tied to that scope. HHMI’s Investigator Program instead funds a selected scientist directly, as an HHMI employee, for a multi-year renewable term, with broad discretion to redirect the research program during the appointment — a ‘fund the person’ model rather than a ‘fund the project’ model.
How do disease-specific charities like ACS decide what research to fund?
Organizations such as the American Cancer Society run their own extramural peer review process, organized around priority research areas defined by the organization and reviewed by disciplinary committees of outside scientific experts — structurally similar to an NIH study section, but scoped entirely to that organization’s disease mission rather than a broader federal research portfolio.
Is a payment from a private foundation always a “grant” for sponsored-programs purposes?
Not necessarily. Institutions distinguish between grants (which typically carry a defined scope of work, budget, and reporting obligation, and are usually administered by the sponsored programs office) and gifts (which are typically unrestricted or loosely restricted and administered by institutional advancement/development). The same foundation can make both types of payments to the same institution, and getting the classification right early affects which office manages compliance and reporting.
