Q&A with Christian Braemer: How Benefunder is bridging the “Innovation Deficit”
Earlier this week, we asked Benefunder CEO and Co-Founder Christian Braemer to give us some insight on how his philanthropic services organization is driving a fundamental shift in traditional research funding by creating a marketplace, attracting new money, lowering costs, and increasing transparency.
What inspired you to become champions of innovative research?
Braemer: I have always been frustrated with the lack of innovation or disruption in non-profits. A fellow entrepreneur who I had co-mentored with at CONNECT had sold a company and was looking for promising technologies to license from a university lab. He came in contact with my now Benefunder co-founder, Dr. Gert Lanckriet, a UC San Diego researcher who was working on promising new applications in music matchmaking. When the conversation continued to hit a dead end due to insufficient funding, we started talking about solutions to address the bigger problem.
What led you to Benefunder?
My background is pretty diverse and it didn’t really all come together until Benefunder was born. I was a financial advisor with Morgan Stanley and later moved to Merrill Lynch. From there, I launched my first true startup, a consumer WiFi company, which was later acquired by a digital media agency.
I stayed with the company and ran the labs, coming up with new business ideas that could be demonstrated as a proof-of-concept to current clients or be acquired or spun off. During that time, I also volunteered for non-profits. First, I was president of the Swedish American Chamber of Commerce in San Diego (don’t ask how a Dane got to run the Swedish chamber, but someone thought that was a good idea), where we matched companies that had similar interests on either side of the Atlantic in the wireless, life sciences, clean tech, and defense industries. I later co-founded a local fundraising organization for homeless causes. Most recently, I served as a volunteer Entrepreneur in Residence at CONNECT, a San Diego accelerator for startups. It was there that the idea for Benefunder was born.
Was there an epiphany when you realized the need for this kind of platform?
For me, the epiphany came after I had spoken with several deans at UC San Diego about the idea, as well as the management at Merrill Lynch, who really supported the idea.
Your site talks about “bridging the innovation deficit” between current funding levels and what the U.S. would need to maintain its leadership position. What are some of the factors that have led to the widening of this gap?
This problem really came to light as part of the aftermath of the financial crash, which marks the point in time when research funding started flat lining. Today, the lack of growth equates to a 20% decline in buying power in research funding. That said, the problem was created around the start of WWII when research funding shifted from primarily patron funded, to mostly government backed. Today, individuals give roughly $240 billion annually, yet less than 3% of that is allocated to research, the category with by far the greatest economic return. If you’d like to learn more, innovationdeficit.org does a great job of illustrating the problem.
Why do you think science philanthropy has been gaining so much attention and momentum lately? Do you think there’s a growing desire for a more personal, less bureaucratic alternative way to give?
I think the ultra-wealthy have led the way and now technology is making this style of giving accessible to a broader audience. Information is becoming more available; accountability is also in greater demand as evidenced by the recent growth of sites like Charity Navigator and GuideStar. These sites provide ratings and transparency on charities’ expenses and expenditures. We’ve all heard the backlash from the ALS ice bucket challenge, where over $100 million was raised, but less than 30% of funds actually made it to research institutions. Unfortunately, the same holds true for most of the top research focused charities.
You support an incredibly wide range of causes—from alternative energy to biotechnology to astronomy. How do you select which ones to promote?
The vision of Benefunder is to facilitate a portfolio-based approach to giving. People aren’t one dimensional, so why should they be forced to pick a single cause to support? There are also multiple ways to tackle any one problem. For example, some of the most promising healthcare solutions reside in engineering, just like space exploration has facilitated some of the biggest breakthroughs in new materials, while defense funding has resulted in lots of exciting advances in cyber security. There are also a lot of other factors like stage of research that might appeal to different people, for example, if you’re interested in funding the next big breakthrough, basic research is for you, whereas if your goal is to see something get to market, applied or commercialization stage causes are the best fit – and those preferences might vary by category.
We select researchers based on a number of factors, including awards, recognition, funding sources, influence, recommendations from institutions, and willingness to engage with donors. We look for established pillars in science and young “up and comers” alike working at all stages and categories of research.
What do you consider your greatest success stories thus far?
We’re still in the early stages, but our first milestone was convincing UC San Diego, the nation’s 8th largest research university, to come onboard with us. They saw the vision and were willing to take a chance on us, which put us on the map in the research community. Since then, hitting the 100 researcher mark was also a big deal (we are now at 250 researchers and counting), as was getting our 501c3 charitable status recently. We have just launched our fundraising efforts with one of the largest wealth management firms in the country, so we are anticipating some great success stories on that side very soon.
Can you tell us about your Innovation Showcase events? Who participates and what do the participants get out of those events?
These events were designed to bring top researchers into the community and to connect them with potential donors. We partnered with Sotheby’s Real Estate, which provided some incredible listings as locations for the events to give them a more intimate feel. We had some great events with lots of engagement and great conversations. Some of the researchers who have participated in these events include Todd Coleman, an associate UC San Diego bioengineering professor who is advancing wearable health via his smart skin sensors; Nigel Calcutt, a UC San Diego pathology professor working on a treatment for and prevention of nerve damage caused by diabetes; and Albert Yu-Min Lin and Eliah Aronoff-Spencer of DH Labs at UC San Diego’s Qualcomm Institute, who are using smart phone medical technology to monitor the health of global environments, such as clean water in Africa.
What are your goals for the future?
Our goal is to raise $1 billion for researchers in the next five years by integrating our solution into the wealth management process. As we launch our fundraising efforts, the opportunities and challenges ahead are immense. The above-mentioned wealth management firm saw over $30 billion in charitable contributions from clients last year, which by itself equates to the total annual NIH budget. A recent US Trust study showed that 98% of high net worth individuals give, yet only roughly 40% were satisfied with their giving experience. That said, nearly everyone already has a relationship with one or more foundations, and changing the status quo and introducing a paradigm shift are never easy tasks.
To learn more, visit benefunder.org.
To learn how Breakout Labs is helping early-stage startups take their ideas out of the lab and into the economy, click here.