Partnering For Success: Charities At The Forefront Of Scientific Innovation

• Published date: 27 April 2022
• Subject Matter: Corporate/Commercial Law, Charities & Non-Profits , Venture Capital, Corporate and Company Law
• Law Firm: Withers LLP
• Author: Mr Amy Carter, Sharmela Kalmer, Philip Reed and Hugo Walford

New focus on medical technology and research has put charities at the forefront of global science innovation. This article explores the options, potential benefits and key considerations for charities considering increasing their involvement in this area.

An increase in innovative, medical research by charities

Over the past several years, we have seen some charities intensifying their grant funding on scientific and healthcare innovation. Some have turned to social investment into health focused start-ups, and others have collaborated with other charities or with non-charitable partners to support cutting-edge research. Larger charities have even established their own medical research/technology and venture capital arms.

Successful partnerships

The creation of unique ecosystems consisting of partnerships, combining innovation and funding have put UK research at the forefront of the global life sciences sector. Funded by public, corporate, philanthropic and venture capital sources, charity-based partnerships are helping the UK life sciences industry drive forward innovation and help support life-changing, medical breakthroughs.

Key considerations for supporting innovative research

The trustees of any charity considering grant-making or social investment to support innovative medical research would need to be satisfied that this would be:

• in a subject, or directed towards establishing an outcome which was of value and calculated to promote (in a meaningful and direct way) the charity's objects;
• undertaken with the intention that the useful knowledge acquired from the research will be disseminated to the public and
• such that the private benefit attributable to the charity's involvement is no more than incidental to the public benefit delivered.

If grant support would fulfils the above tests, then the trustees could pursue it. Equally, the trustees could, as an alternative to grant-making, consider social investment options to support innovative medical technology or research. The Charity Commission's guidance material 'Charities and investment matters: a guide for trustees (CC14)' outlines the key considerations in this regard.

For charities whose objects and/or powers do not allow for the provision of such support, it may still be possible for the trustees to invest in innovative healthcare related companies. This is because all charities, subject to any restrictions/qualifications in their governing documents, are able to invest in such companies if...