Agency-Related Nonprofit Research Foundations and Corporations

December 9, 2019 – June 2, 2022 R46109

Agency-Related Nonprofit Research
June 2, 2022
Foundations and Corporations
Marcy E. Gallo
Federal research and development (R&D) has played a significant role in strengthening the
Analyst in Science and
innovative capacity of the United States to achieve goals such as economic competitiveness,
Technology Policy
national security, improved health care, and protection of the environment. The results of federal

R&D have led to scientific breakthroughs and new technologies with broad social and economic
Henry B. Hogue
impacts, including artificial intelligence, the internet, and magnetic resonance imaging. The
Specialist in American
global landscape for innovation is rapidly evolving—the pace of innovation has increased and the
National Government
composition of R&D funding has changed (e.g., public versus private funding and the U.S. share

of global R&D has declined). These changes have led some to call for new approaches and the
expansion of existing federal authorities to help the United States maintain its leadership in
John F. Sargent Jr.
innovation, research, and technology.
Specialist in Science and
Technology Policy

Over the years, Congress has created several agency-related nonprofit research foundations and
corporations to advance the R&D needs of the federal government. The stated goals and potential

benefits of these quasi-governmental entities include (1) providing a flexible and efficient
mechanism for establishing public-private R&D partnerships; (2) enabling the solicitation,
acceptance, and use of private donations to supplement the work performed with federal R&D funds; (3) increasing
technology transfer and the commercialization of federally funded R&D; (4) improving the ability of federal agencies to
attract and retain scientific talent; and (5) enhancing public education and awareness regarding the role and value of federal
R&D.
This report provides an overview of the purpose and intent, governance structure, and federal funding associated with
selected congressionally mandated, agency-related nonprofit research foundations and corporations: the Foundation for the
National Institutes of Health, the National Foundation for the Centers for Disease Control and Prevention, the Reagan-Udall
Foundation for the Food and Drug Administration, the Foundation for Food and Agriculture Research, the Henry M. Jackson
Foundation for the Advancement of Military Medicine and the nonprofit research and education corporations associated with
the Department of Veterans Affairs.
The report also identifies potential issues for consideration related to oversight of existing agency-related nonprofit research
foundations and corporations as well as potential issues for consideration should Congress elect to establish additional ones.
Specifically, while government agencies are, with certain exceptions, subject to management laws and regulations designed
to ensure accountability, transparency, and fairness, agency-related research foundations and corporations are generally
exempt from them. This situation may raise questions about how Congress and federal agencies can protect the public
interest and ensure confidence in the decisionmaking of such entities. Additionally, recent concerns that some have raised
related to conflict of interest, the potential for industry influence, and questions about effectiveness may prompt further
examination of these entities.
Among the options that Congress might consider are:
 crafting a broad, general nonprofit research foundation authority that federal science agencies could draw
on to create an entity that meets their specific needs;
 examining the existing authorities of individual federal science agencies and, as appropriate, supplementing
those authorities to increase the flexibility of an agency to enter into public-private partnerships;
 creating additional agency-related nonprofit research foundations on a case-by-case basis, tailored to the
specific needs of particular federal science agencies; and
 maintaining the status quo, i.e., allowing agency-related nonprofit research foundations and corporations
that currently exist to continue, and requiring other federal agencies to use their existing authorities to enter
into public-private R&D partnerships and transfer federal technologies to the marketplace.

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Agency-Related Nonprofit Research Foundations and Corporations

Introduction
Congress maintains an ongoing interest in the pace of U.S. innovation and technological
advancement due to its influence on the economy, national security, public health, and other areas
of national attention. Historically, the federal government has played a significant role in
supporting research and development (R&D)—especially basic research—that has led to
scientific breakthroughs and new technologies. The global landscape for innovation is rapidly
evolving—the pace of innovation has increased and the composition of R&D funding has
changed (i.e., private R&D investments are larger than public R&D investments and the U.S.
share of global R&D has declined). These changes have led some to call for new approaches and
the expansion of existing mechanisms to help the United States maintain its leadership role in
innovation and technology. One mechanism that has received some attention is the possibility of
establishing additional agency-related entities that would facilitate the use of private donations in
federally generated research projects.1 In addition, such entities might play a role in the
commercialization of new technologies. The potential establishment of such entities in statute
raises several questions: What kinds of organizations has Congress established in the past to
address similar needs in the federal government? What are the strengths and weaknesses of these
potential models? What are the opportunities and risks of developing a new entity for federal
R&D using one of these models?
The varied organizational arrangements of the executive branch have resulted from more than two
centuries of legislative and administrative actions. These arrangements reflect a diversity of
viewpoints, policy preferences, and political goals among the thousands of elected and appointed
officials who have played a role in creating and shaping them. During the middle of the 20th
century, hybrid organizational forms—incorporating both public and private characteristics—
began to grow in number. These organizational forms, sometimes collectively referred to as
“quasi-governmental entities,” differ from one another in their specific features, relationship to
the federal government, funding mechanisms, purposes, levels of accountability to elected
officials, and use of private sector incentives and efficiencies, among other characteristics.2
Agency-related nonprofit research foundations and corporations fall into this category of
organizations.
Background on Quasi-Governmental Entities
Working with successive administrations, Congress has established, or provided for the
establishment of, many quasi-governmental entities.3 Some of the considerations that contributed
to their creation and development were linked to political and policymaking dynamics that were
idiosyncratic to the specific time and issue at hand. Nonetheless, observers have identified some
common purposes for, and expected benefits of, establishing such entities:
 providing for stable funding during federal budget tightening and uncertainty;

1 See, for example, National Institute of Standards and Technology, U.S. Department of Commerce, Return on
Investment Initiative: Draft Green Paper to Advance the President’s Management Agenda, NIST Special Publication
1234, Washington, DC, December 2018, pp. 58-64, https://doi.org/10.6028/NIST.SP.1234.
2 Ronald C. Moe, “The Emerging Federal Quasi Government: Issues of Management and Accountability,” Public
Administration Review, vol. 61, no. 3 (May/June 2001). Hereinafter cited as Moe.
3 For a partial inventory of such entities, see “Other Federally Established Organizations” in U.S. Government
Accountability Office, Federally Created Entities: An Overview of Key Attributes, GAO-10-97, October 2009, p. 23,
https://www.gao.gov/products/GAO-10-97.
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 freeing a program from general government management laws, particularly those
pertaining to caps on personnel and compensation;
 harnessing business principles and mechanisms with the aim of providing
government-driven solutions without the “red tape” associated with the federal
bureaucracy; and
 providing authorities tailored to the desired mission and functions that allow
flexible approaches not typically allowed under statutes or regulations, such as
those in the area of financial management.4
In comparison to traditional government agencies, quasi-governmental entities of various kinds
have been touted for their potential to harness business-like entrepreneurial incentives and drive,
greater managerial flexibility, and increased employee input in decisionmaking to better carry out
the entity’s responsibilities.5
As quasi-governmental organizations have grown in number and variety, some observers have
criticized the exemption from government management laws of many such entities. A complex
legal framework has been established over time to guide government agencies so that their
actions adhere to the values of democratic governance, such as accountability, transparency, and
fairness.6 Critics point out that this legal framework provides routine accountability and
transparency for entities that are operating under statutory authority. Absent this accountability
and transparency, they argue, it might be difficult for stakeholders to verify on an ongoing basis
that the activities of a quasi-governmental entity, established by statute and vested with the power
to carry out some public purpose, are directed toward the achievement of this purpose, rather than
particularized interests.7 Many of these laws and regulations specify the processes by which
action must be taken. Some have criticized such governmental processes as “red tape,”
particularly in cases where they appear to have been applied zealously, slowly, or with little
attention paid to an individual’s or business’s need for a service or flexibility. Arguably, quasi-
governmental entities involve a tradeoff: What appears to some to be red tape during an
administrative encounter may appear to others to be an essential accountability or transparency
mechanism.8
Most federal agencies are funded through the annual appropriations process, and Congress has
sometimes used the “power of the purse” to influence agency priorities and activities. Most
federal agencies are headed by appointees of the President subject to Senate advice and consent,
and the confirmation process provides Senators with an opportunity to discuss agency issues and
concerns with these leaders. Congress establishes, or provides for the establishment of, quasi-

4 See Moe, pp. 290-291.
5 Elaine Ciulla Kamarck, “The End of Government as We Know It,” in Market-Based Governance: Supply Side,
Demand Side, Upside, and Downside, ed. John D. Donahue and Joseph S. Nye Jr. (Washington, DC: Brookings
Institution Press, 2002), pp. 227-263; National Performance Review, Reinvention’s Next Steps: Governing in a
Balanced Budget World: A Speech by Vice President Al Gore and Supporting Background Papers (Washington, NPR:
1996), pp. 6-8, 17-20. The Vice President’s remarks were delivered at the National Press Club on March 4, 1996.
6 Among the general management laws that most government agencies must adhere to are those pertaining to internal
auditing by inspectors general, control of improper payments, internal control and accounting systems, access to public
records, access to public meetings, and availability of federal contract and grant information. U.S. Government
Accountability Office, Federally Created Entities: An Overview of Key Attributes, GAO-10-97, October 2009, pp. 24-
34, https://www.gao.gov/products/GAO-10-97.
7 Moe, p. 290.
8 Ellen Dannin, “Red Tape or Accountability: Privatization, Public-ization, and Public Values,” Cornell Journal of Law
and Public Policy, vol. 15, no. 1 (Fall 2005), p. 111. See, especially, “I. Privatization and Accountability,” pp. 113-129.
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governmental entities, but it might not have the same level of influence over them as it does over
conventional federal agencies. Congressional committees have reviewed the actions and structure
of some of these entities during oversight hearings,9 and Congress has sometimes enacted
changes to their enabling statutes.10 At the same time, many quasi-governmental entities do not
receive appropriated funds and are not led by advice and consent appointees, shielding them from
two potential avenues of congressional influence.
In addition to criticisms related to oversight, accountability, and transparency, some have
questioned whether private sector management techniques are always appropriate for managing
government functions. Most public administration scholars have agreed that public enterprises
can benefit from some general management mechanisms developed in the private sector. Some
scholars have argued, however, that the blanket application of private sector management
assumptions to the public sector might miss important differences between the two.11
These differences include, for example, the role of constitutional law. As one public
administration scholar stated, “although politicians, reformers, and media pundits often call for
running government like a business, constitutional law makes the public’s business very different
from others.”12 Some observers also have noted differences in the “bottom line” of the two
sectors, and the consequent complexity associated with measuring performance in accomplishing
a public purpose.13
This report discusses a specific category of quasi-governmental entities: agency-related nonprofit
organizations that have been established in statute for the express purpose of advancing or
facilitating the R&D mission of a federal agency.14 It describes the characteristics of several

9 See, for example, U.S. Congress, House Committee on Financial Services, Subcommittee on Capital Markets and
Government Sponsored Enterprises, Examining the Agenda of Regulators, SROs, and Standards-Setters for
Accounting, Auditing, and Municipal Securities, 114th Cong., 2nd sess., September 22, 2016 (Washington: GPO, 2018),
which includes a discussion of the activities of the Public Company Accounting Oversight Board; and U.S. Congress,
House Committee on Veterans’ Affairs, Subcommittee on Oversight and Investigations, Lack of Oversight of
Interagency Agreements-VA Procurement Failures Continued, 114th Cong., 1st sess., July 21, 2015 (Washington: GPO,
2016), which includes a discussion of the relationship between the Department of Veterans Affairs and federally
funded research and development centers.
10 For example, Congress first chartered the American National Red Cross in 1900, then repealed this charter and
enacted a new one in 1905. The 1905 charter has been amended at least nine times, twice making substantive changes
to the organization’s governance structure. For more, see https://www.redcross.org/about-us/who-we-are/history/
federal-charter.html.
11 For a discussion of the distinctions and similarities between public and private management, see Hal G. Rainey,
Robert W. Backoff, and Charles H. Levine, “Comparing Public and Private Organizations,” Public Administration
Review, vol. 36, no. 2 (March/April 1976), pp. 233-244; and Graham T. Allison, “Public and Private Management: Are
They Fundamentally Alike in All Unimportant Respects?” Remarks presented at the Public Management Research
Conference, Washington, DC, November 19-20, 1979.
12 David H. Rosenbloom, “The Constitutional Context of U.S. Public Administration,” in Administrative Law for
Public Managers (Boulder: Westview Press, 2003), p. 19. Among other aspects of this dynamic, administrators in the
federal government are under the authority of Congress, the President, and the federal courts in a way that private
sector entities are not. In addition, federal agencies must take into account individuals’ constitutional rights during an
administrative encounter.
13 In most cases, the bottom line in the private sector is profitability, and measures of this are well established. In
contrast, the bottom line in the public sector is the achievement of one or more public purposes that have been set out in
a statute, regulation, or presidential directive. The ability to measure success in achieving such purposes might be more
challenging than measuring profitability, particularly where the articulated purposes are vague or conflicting. Mark H.
Moore, “Privatizing Public Management,” in Market-Based Governance: Supply Side, Demand Side, Upside, and
Downside, ed. John D. Donahue and Joseph S. Nye Jr. (Washington: Brookings Institution Press, 2002), pp. 305-313.
14 Other agency-related nonprofit organizations have been created by Congress to support the mission of federal
agencies (i.e., National Fish and Wildlife Foundation, the National Park Foundation, the National Forest Foundation),
however, such entities are not included in this report as R&D is not their primary focus.
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illustrative organizations of this type. It examines the available record of these entities’
performances and discusses related praise and criticism of these organizational arrangements.
Finally, the report identifies potential issues for consideration related to oversight of existing
quasi-governmental R&D support organizations as well as potential issues for consideration
should Congress elect to establish similar organizations.
Existing Agency-Related Nonprofit R&D
Organizations
Congress has created a number of agency-related nonprofit research foundations and corporations
to advance the R&D needs of the federal government and to overcome perceived barriers
associated with federal agencies’ ability to partner or otherwise engage with industry, academia,
and other entities. The stated goals and potential benefits of these quasi-governmental R&D
support organizations are that they may:
 provide a flexible and efficient
What Are Public-Private Partnerships?
mechanism for establishing public-
Public-private partnerships come in many forms and are
private R&D partnerships (see the
used for many purposes, from advancing R&D to
box, “What Are Public-Private
constructing and maintaining transportation
Partnerships?” for more
infrastructure. According to the 2012 Global Innovation
Index, a public-private partnership (PPP) is “a relationship
information);
in which public and private resources are blended to
 enable the solicitation, acceptance,
achieve a goal or set of goals judged to be mutually
and use of private donations to
beneficial to both the private entity and to the public.”
The United Nations describes PPPs as “col aborative
supplement the work performed
relationships between various parties, both public and
with federal R&D funds;
non-public, in which all participants agree to work
 increase technology transfer and the
together to achieve a common purpose or undertake a
specific task and, as mutually agreed, to share risks and
commercialization of federally
responsibilities, resources and benefits.”
funded R&D;
Sources: Louis Witters, Revital Marom, and Kurt Steinert,
 improve the ability of federal
“The Role of Public-Private Partnerships in Driving
agencies to attract and retain
Innovation,” in The Global Innovation Index 2012, ed.
scientific talent, including through
Soumitra Dutta (INSEAD and the World Property
Organization, 2012), p. 8;1 and General Assembly
the use of fellowships, personnel
resolution 60/215, Towards Global Partnerships,
exchanges, and endowed positions;
A/RES/60/215 (December 22, 2005),
and
https://digitallibrary.un.org/record/563759?ln=en.
 enhance public education and
awareness regarding the role and value of federal R&D.
The following sections provide a brief overview of the purpose and intent, governance structure,
and federal funding of selected congressionally mandated, federal agency-related nonprofit
research foundations and corporations. The foundations discussed include those connected with
the work of the National Institutes of Health (NIH), the Centers for Disease Control and
Prevention (CDC), the U.S. Food and Drug Administration (FDA), the U.S. Department of
Agriculture (USDA), and the Uniformed Services University of the Health Sciences (USU).
Nonprofit research and education corporations associated with the work of the Department of
Veterans Affairs (VA) are also discussed.
All the foundations discussed have been funded through a combination of public and private
monies and foster public-private R&D partnerships. However, the level of public support
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received by the foundations differs, as do the composition and appointment of their governing
boards.
Federal agencies and Congress have also initiated the creation of other organizations and entities
to advance the R&D needs of federal agencies. Federally initiated venture capital firms and
strategic investment initiatives, including In-Q-Tel, are often mentioned as an effective model.
See the Appendix, “Federally Initiated and Funded Venture Capital Firms,” for more information
and illustrative examples of such organizations.
Foundation for the National Institutes of Health (FNIH)
In 1990, Congress directed the Secretary of Health and Human Services (HHS) to establish a
nonprofit corporation—the National Foundation for Biomedical Research, which is now known
as the Foundation for the National Institutes of Health (FNIH).15 Initially, the foundation was
tasked with attracting and retaining internationally known scientists to NIH “by offering
competitive support for salaries, equipment, and space” through privately funded endowed
positions.16 In 1993, Congress broadened the purpose of the foundation to include “support [for]
the National Institutes of Health in its mission, and to advance collaboration with biomedical
researchers from universities, industry, and nonprofit organizations.”17
According to FNIH, the foundation creates public-private partnerships and alliances to advance
breakthrough biomedical discoveries that can change and improve the quality of people’s lives.
FNIH raises funds, provides scientific expertise, and administers research programs to address a
wide range of health challenges in support of NIH’s mission. FNIH also supports the training of
new researchers, supports patient programs, and organizes health-related educational events and
symposia.18
One example of an FNIH-initiated project is the Biomarkers Consortium. FNIH manages the
consortium—consisting of 32 companies, 15 nonprofit organizations, NIH, and FDA—with the
goal of increasing the identification, development, and regulatory approval of biomarkers to
support and improve drug development, preventive medicine, and medical diagnostics.19 In 2018,
FDA approved the use of a new biomarker—supported by the consortium—that is expected to
improve the detection of kidney injury in healthy volunteers participating in clinical drug trials.20
In 2020, NIH announced a new public-private partnership, Accelerating COVID-19 Therapeutic
Interventions and Vaccines (ACTIV), managed by FNIH “to develop a coordinated research

15 The foundation was established by P.L. 101-613, 42 U.S.C. §290b. In 1998, P.L. 105-392, §418(2)(A) changed the
foundation’s name.
16 U.S. Congress, Senate Committee on Labor and Human Resources, National Institutes of Health Reauthorization Act
of 1990, report to accompany S. 2857, 101st Cong., 2nd sess., September 12, 1990, S.Rept. 101-459, p. 15.
17 P.L. 103-43, §1701.
18 Foundation for the National Institutes of Health, “Frequently Asked Questions,” https://fnih.org/about/faq.
19 Biomarkers are defined characteristics of the body that can be measured and used to indicate normal or abnormal
biological processes or responses to an exposure or intervention. Blood pressure and body temperature are two
examples of common biomarkers; other, more specialized biomarkers are less well known. Many experts consider the
development of new disease-specific biomarkers an important component for the advancement of precision medicine.
Foundation for the National Institutes of Health, “Biomarkers Consortium,” https://fnih.org/what-we-do/biomarkers-
consortium.
20 Foundation for the National Institutes of Health, “FNIH Biomarkers Consortium and Critical Path Institute Achieve
the First Ever Qualification of a Clinical Safety Biomarker by the U.S. Food and Drug Administration,” press release,
October 25, 2018, https://fnih.org/news/press-releases/fnih-biomarkers-consortium-and-critical-path-institute-achieve-
first-ever.
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strategy for prioritizing and speeding development of the most promising treatments and
vaccines” for the coronavirus disease.21
FNIH’s governance structure and powers are specified in its organic act and bylaws.22 FNIH is
governed by a board of directors composed of non-voting, ex officio members and voting,
appointed members with day-to-day operations overseen by an executive director. Congress
designated certain Members of Congress and federal officials as ex officio board members and
tasked them with appointing the initial members of the board from a list of candidates provided
by the National Academy of Sciences.23 According to FNIH’s bylaws, the number of appointed
board members must be at least 6 and no more than 32; the term of an appointed member is 3 to 5
years; there is no limit on the number of terms an appointed member may serve; and any
vacancies in the membership of the board shall be filled through election by the board.24 Congress
empowered the board to establish bylaws to govern the general operations of the foundation,
including policies for the acceptance, solicitation, and disposition of donations and grants. It also
required the board to ensure that the bylaws do not compromise, appear to compromise, or reflect
unfavorably on NIH and the ability of NIH to fulfill its responsibilities to the public. Furthermore,
Congress made the board of directors accountable for “the integrity of the operations of the
Foundation” through the development and enforcement of standards of conduct, financial
disclosure statements, and conflict of interest policies and procedures.25
FNIH operations and activities have been funded through a combination of private donations and
a share of NIH appropriations. According to FNIH, since its initial incorporation in 1996, the
foundation has raised more than $1.2 billion in support of NIH’s mission.26 According to tax
filings, FNIH provided NIH with $22.7 million in assistance in 2019 and $13.3 million in 2020.27
On March, 15, 2022, P.L. 117-101 increased the amount of support the Director of NIH could
“provide [for] facilities, utilities and support services to the Foundation.” Specifically, the law
increased the amount the Director is required to transfer to FNIH from “not less than $500,000
and not more than $1.25 million” to “not less than $1.25 million and not more than $5 million” of
the agency’s annual appropriations.28 Between FY2015 and FY2022, NIH transferred between $1
million and $1.25 million annually to FNIH for administrative and operational expenses (less than
0.01% of NIH’s annual budget).29 In the President’s FY2023 budget, NIH requested $1.25 million

21 National Institutes of Health, “Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV),”
https://www.nih.gov/research-training/medical-research-initiatives/activ.
22 P.L. 101-613, 42 U.S.C. §290b and FNIH bylaws available at https://fnih.org/sites/default/files/final/pdf/
FNIH%20By-Laws%20as%20of%20May%2023%2C%202019.pdf.
23 42 U.S.C. §290b(d)(1); The Chair and Ranking Member of the Subcommittee on Health and Environment in the
House, the Chair and Ranking Member of the Committee on Labor and Human Resources in the Senate, and the
Director of NIH and the Commissioner of FDA were designated as ex officio members of the board. Congress ended
the terms of service of the Members of Congress after the selection of the initial board members.
24 FNIH bylaws available at https://fnih.org/sites/default/files/final/pdf/FNIH%20By-
Laws%20as%20of%20May%2023%2C%202019.pdf.
25 42 U.S.C. §290b(d)(6) and 42 U.S.C. §290b(j).
26 Foundation for the National Institutes of Health, “2020 Statutory Report,” https://fnih.org/sites/default/files/2021-05/
2020%20Statutory%20Report.pdf.
27 CRS analysis of FNIH IRS 990 forms for 2019 and 2020, available at https://apps.irs.gov/pub/epostcard/cor/
521986675_201912_990_2021040217858562.pdf, and https://fnih.org/sites/default/files/2022-02/
FNIH%202020%20990%20for%20Public%20Inspection_0.pdf.
28 42 U.S.C. §290b(k)(2) and 42 U.S.C. §290b(l).
29 CRS analysis of congressional budget justifications for FY2016-FY2023 for NIH’s Office of the Director available at
https://officeofbudget.od.nih.gov/history.html.
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for this purpose. Additionally, since FY2008, FNIH has received $773,855 in federal grants,
contracts, and other financial assistance.30
National Foundation for the Centers for Disease Control and
Prevention
In 1992, Congress authorized the establishment of the National Foundation for the Centers for
Disease Control and Prevention (CDC Foundation) to “support and carry out activities for the
prevention and control of diseases, disorders, injuries, and disabilities, and for promotion of
public health.”31 A House committee report stated:
In the midst of budget restraint and personnel limitations, CDC itself is often strained to
meet the basic demands of its mission. Efforts to experiment (some of which will
necessarily fail), to do long-term planning, and to recruit and retain temporary staff are
usually luxuries that the agency cannot afford, however productive they may ultimately be.
The Committee has, therefore, undertaken to create a mechanism for the establishment of
a private non-profit foundation to provide these innovative and supplementary activities in
public health in association with the CDC. Once established, such a foundation could seek
private support for these efforts from both individuals and organizations, and could bring
charitable funds and flexibility to these goals.32
The CDC Foundation is authorized to support a number of activities, including using private
funds to establish endowed positions at CDC; creating programs for state, local, and international
public health officials to work and study at CDC; conducting forums for the exchange of public
health information; and funding research and other public health studies.33 The foundation
guidelines state that it:
helps CDC pursue innovative ideas that might not be possible without the support of
external partners.... CDC Foundation partnerships help CDC launch new programs, expand
existing programs that show promise, or establish a proof of concept through a pilot project
before scaling it up. In each partnership, external support gives CDC the flexibility to
quickly and effectively connect with other experts, information and technology needed to
address a public health challenge.34
For example, in 2020, the CDC Foundation activated its Emergency Response Fund “to provide
support to rapidly emerging response needs related to COVID-19.” According to the CDC
Foundation, raised funds are being used to provide additional support for state and local health
departments, global response efforts, and for logistics, communications, data management,
personal protective equipment, and critical response supplies.35

30 CRS analysis of USAspending.gov (accessed on May 25, 2022) which contains information on entities that have
received federal awards in the form of contracts, grants, loans, or other financial assistance back to FY2008.
31 Title II of P.L. 102-531.
32 U.S. Congress, House Committee on Energy and Commerce, Preventative Health Amendments of 1991, report to
accompany H.R. 3635, 102nd Cong., 1st sess., November 15, 1991, H. Rept. 102-318 (Washington: GPO, 1991), p. 10.
33 42 U.S.C. §280e-11(c) and 42 U.S.C. §280e-11(d).
34 CDC Foundation, “Public-Private Partnerships and Conflict of Interest Guidelines,” https://www.cdcfoundation.org/
public-private-partnership-guidelines.
35 CDC Foundation, “Partners Needed in the Coronavirus Response,” https://www.cdcfoundation.org/programs/
coronavirus-needs.
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The CDC Foundation’s governance structure and powers are specified in statute and through the
foundation’s bylaws. The CDC Foundation is governed by a board of directors composed of
appointed members and overseen by an executive director. Congress created a committee
composed of representatives from the public health and nonprofit sectors to incorporate the
foundation, to establish its general policies and initial bylaws, and to appoint the initial members
of the board of directors.36 The term of service of a board member is five years, and any vacancies
in the membership of the board are filled through appointment by the board.37 Congress tasked
the CDC Director with serving as a liaison between the agency and the CDC Foundation, but did
not designate the CDC Director as an ex officio member of the board.38 According to the CDC
Foundation, such an arrangement guarantees that the foundation remains independent from CDC,
while ensuring that the CDC Foundation’s “programs and activities have the greatest possible
impact for CDC and public health.”39 Additionally, Congress required the board of directors to
establish bylaws and general policies for the foundation, including policies for ethical standards,
the acceptance and disposition of donations, and the general operation of the foundation.
Congress required that the bylaws not reflect unfavorably upon the ability of the foundation or
CDC to carry out its responsibilities or official duties in a fair and objective manner; or
compromise, or appear to compromise, the integrity of any governmental program or any officer
or employee involved in such program.40
CDC Foundation operations and activities have been funded through a combination of private
donations and a share of CDC appropriations. Since 1995, the CDC Foundation has raised more
than $1.6 billion in support of CDC and its mission.41 The CDC Foundation transferred $9.8
million to CDC in 2019 and $16.5 million in 2020.42 Congress authorized the CDC to provide the
CDC Foundation with $1.25 million annually (roughly 0.02% of CDC’s annual budget).
According to the CDC Foundation’s audited financial statements, CDC has provided the
foundation with a $1.25 million for operating expenses each year since 2012.43 Additionally, since
FY2008, the CDC Foundation has received $7.8 million in federal grants, contracts, and other
financial assistance.44
Reagan-Udall Foundation for the Food and Drug Administration
In 2007, Congress established the Reagan-Udall Foundation for the Food and Drug
Administration (Reagan-Udall Foundation) with the purpose of advancing FDA’s mission “to
modernize medical, veterinary, food, food ingredient, and cosmetic product development,
accelerate innovation, and enhance product safety.”45 The duties of the Reagan-Udall Foundation

36 42 U.S.C. §280e-11(j).
37 42 U.S.C. §280e-11(f)(4).
38 42 U.S.C. §280e-11(h)(8).
39 CDC Foundation, “Public-Private Partnerships and Conflict of Interest Guidelines,” https://www.cdcfoundation.org/
public-private-partnership-guidelines.
40 42 U.S.C. §280e-11(f).
41 CDC Foundation, “Fiscal Year 2021 Report to Congress,” https://www.cdcfoundation.org/Report-Congress-
FY2021?inline.
42 CRS analysis of CDC Foundation IRS 990 forms for 2021 and 2020 available at https://www.cdcfoundation.org/
CDCF-Form990-FY2021?inline and https://www.cdcfoundation.org/CDCF-Form990-FY20?inline.
43 For more information, see https://www.cdcfoundation.org/financials.
44 CRS analysis of USAspending.gov (accessed on May 25, 2022) which contains information on entities that have
received federal awards in the form of contracts, grants, loans, or other financial assistance since FY2008.
45 P.L. 110-85, Title VI, §601(a).
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include identifying unmet needs and supporting regulatory science research and other programs to
improve the development, manufacture, and evaluation (including post-market evaluation) of
FDA-regulated products. According to the Reagan-Udall Foundation, it “manages a suite of
programs that assist the FDA to engage with external stakeholders, facilitate innovative research,
advance the vitality of its workforce, and deliver improved health outcomes.”46
In 2017, the Reagan-Udall Foundation launched the Innovation in Medical Evidence
Development and Surveillance (IMEDS) program which provides FDA regulated industries,
universities, and nonprofits with access to distributed electronic health care data that can be used
to evaluate medical product safety and assess drug effectiveness.47 In March 2020, the Reagan-
Udall Foundation, in collaboration with the Friends of Cancer Research, launched the COVID-19
Evidence Accelerator
to accelerate the research community’s ability to coordinate the avalanche of real-world
data being generated during this pandemic. The initiative brings together members of the
health data community to share insights and compare results through weekly data-sharing
meetings. In addition, the Accelerator will gather a core group of health systems, academic,
government, technology, and data organizations, each working in parallel to co-design and
execute real-world studies to answer critical questions about the diagnosis, treatment, and
management of COVID-19.48
The governing structure, purposes, and powers of the Reagan-Udall Foundation are specified in
the statute establishing the foundation and further defined by the foundation’s bylaws. The
Reagan-Udall Foundation is governed by a board of directors composed of appointed and ex
officio members, including the FDA Commissioner and the Director of NIH. A board-appointed
executive director oversees the day-to-day operations of the foundation.
Congress directed federal officials—FDA Commissioner, NIH Director, CDC Director, and the
Director of the Agency for Healthcare Research and Quality—to appoint the initial board
members from candidates provided by the National Academy of Sciences, patient and consumer
advocacy groups, professional scientific and medical societies, and industry trade organizations.49
Subsequent to these initial appointments, board vacancies are to be filled through appointment by
the board.50 According to the foundation’s bylaws, the board of directors shall be composed of no
more than 17 appointed members, including no more than 5 members from the general
pharmaceutical, device, food, cosmetic and biotechnology industries and at least 3 members from
academic research organizations, 2 members representing patient or consumer advocacy
organizations, and 1 member representing health care providers.51
Furthermore, Congress directed the board of directors to craft bylaws for the foundation,
including establishing policies for ethical standards, conflicts of interest, the acceptance,

46 Reagan-Udall Foundation, “About Us,” https://reaganudall.org/about-us.
47 June S. Wasser, “Innovation in Medical Evidence Development and Surveillance (IMEDS) and the Evolution of
Postmarket Safety Studies,” DIA Global Forum, July 2017, https://reaganudall.org/sites/default/files/sites/default/files/
IMEDS%20DIAglobal%20Article%208-2017.pdf.
48 Reagan-Udall Foundation, “COVID-19 Hub,” https://covid19.reaganudall.org/.
49 21 U.S.C. §379dd(d)(1)(C)(i).
50 21 U.S.C. §379dd(d)(3)(B)(ii).
51 By-Laws of Reagan-Udall Foundation, Inc., for the Food and Drug Administration available at
https://reaganudall.org/sites/default/files/2021-09/
07.%20Foundation%20ByLaws%20%28Current%29%20Amended%2008.30.21.pdf.
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solicitation, and disposition of donations and grants, carrying out memoranda of understanding
and cooperative agreements, and for review and awarding of grants and contracts.52
As detailed in financial reports, the Reagan-Udall Foundation has raised or received nearly $21
million in support of the foundation since 2009, including grants, contributions, and funds
transferred from FDA.53 On March, 15, 2022, P.L. 117-101 increased the amount FDA is required
to provide the Reagan-Udall Foundation from “not less than $500,000 and not more than $1.25
million” to “not less than $1.25 million and not more than $5 million” annually. Since 2016, FDA
has transferred between $1 million and $1.25 million to the Reagan-Udall Foundation (less than
0.03% of FDA’s annual budget).54 Additionally, since FY2008, the Reagan-Udall Foundation has
received $4.5 million in federal grants, contracts, and other financial assistance.55
Foundation for Food and Agriculture Research (FFAR)
In 2014, Congress created the Foundation for Food and Agriculture Research (FFAR) to advance
the research mission of the U.S. Department of Agriculture (USDA) by focusing on agricultural
issues of national and international significance, including food security and safety.56 In
establishing FFAR, Congress expressed the importance of American leadership in meeting the
needs of a growing population, cited the difficulty associated with overcoming declining federal
investments in agriculture research, and highlighted the potential role of the foundation in
“supplementing USDA’s basic and applied research activities.”57 According to the conference
report:
The Managers do not intend for the Foundation to be duplicative of current funding or
research efforts, but rather to foster public-private partnerships among the agricultural
research community, including federal agencies, academia, non-profit organizations,
corporations and individual donors to identify and prioritize the most pressing needs facing
agriculture. It is the Managers view that the Foundation will complement the work of
USDA basic and applied research activities and further advance USDA’s research mission.
Furthermore, the Managers do not intend in any way for the Foundation’s funding to offset
or allow for a reduction in the appropriated dollars that go to agricultural research.58
FFAR is authorized to award grants, or enter into contracts, memoranda of understanding, or
cooperative agreements with universities, industry, non-profits, USDA, or consortia, to
“efficiently and effectively advance the goals and priorities of the Foundation.”59 It is required to
identify unmet and emerging needs, facilitate technology transfer, and to coordinate its activities
with those of USDA to minimize duplication and avoid potential conflicts with the department.60
The foundation currently supports research in six challenge areas—soil health, sustainable water
management, next generation crops, advanced animal systems, urban food systems, and the

52 21 U.S.C. §379dd(d)(2).
53 CRS analysis of Reagan-Udall financial reports available at https://reaganudall.org/about-us/annual-reports.
54 See, Reagan-Udall Foundation, “Audit and Financial Reports,” https://reaganudall.org/about-us/annual-reports.
55 CRS analysis of USAspending.gov (accessed on May 25, 2022) which contains information on entities that have
received federal awards in the form of contracts, grants, loans, or other financial assistance back to FY2008.
56 P.L. 113-79, Title VII, §7601.
57 U.S. Congress, House Committee on Agriculture, Agricultural Act of 2014, conference report to accompany H.R.
2642, 113th Cong., 2nd sess., January 27, 2014, H.Rept. 113-333 (Washington: GPO, 2014), p. 508.
58 Ibid.
59 7 U.S.C. §5939(d).
60 Ibid.
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health-agriculture nexus—in addition to supporting graduate fellowships and early and mid-
career awards for agricultural researchers.61 FFAR also supports strategic initiatives with the
potential to further the foundation’s mission. For example, in 2017, FFAR awarded researchers at
the University of Illinois $15 million to expand their work in improving photosynthesis efficiency
and crop yields to soybeans and other crops critical to food security in developing countries.
FFAR’s investment was matched by $30 million from the Bill and Melinda Gates Foundation and
the United Kingdom Department for International Development.62 According to FFAR, public-
private partnerships are generally funded through a competitive grants process or through direct
contract; however, the foundation also uses prize competitions to encourage the development of
new technologies.63
The governance structure of FFAR is specified in the statute establishing the foundation and
further defined by the foundation’s bylaws. FFAR is governed by a board of directors composed
of appointed and ex officio members. The day-to-day operations of FFAR are overseen by an
executive director, who is appointed by the board. Congress required the ex officio members of
the board—the Secretary of Agriculture, the Under Secretary of Agriculture for Research,
Education and Economics, the Administrator of the Agriculture Research Service, the Director of
the National Institute of Food and Agriculture, and the Director of the National Science
Foundation—to select the initial appointed board members from lists of candidates provided by
the National Academy of Sciences and by industry.64 According to FFAR’s bylaws, the board
must consist of no less than 15 and no more than 21 appointed members; any vacancies in the
membership of the board shall be filled through appointment by the board; a board member’s
term of service is 5 years; and a board member may be reappointed, but may not serve for more
than 10 years.65 Additionally, Congress tasked the board of directors with crafting bylaws for the
general operation of the foundation and with establishing ethical standards for the acceptance,
solicitation, and disposition of donations and grants. Congress also required that the bylaws and
policies of FFAR preserve the integrity of the foundation and USDA, including the development
and enforcement of a conflict of interest policy.66
In addition to the board of directors, FFAR has established advisory councils for each of the
foundation’s challenge areas. According to FFAR, advisory council members provide board
members and foundation staff with advice and recommendations on “program development and
implementation, potential partnerships and other matters of significance” and represent a diverse
set of industries, professional backgrounds, and geographic areas.67
FFAR activities and operations have been funded through a combination of public and private
funds. Through the Agricultural Act of 2014 (P.L. 113-79), Congress provided FFAR with $200
million to enter into public-private partnerships and advanced agricultural research. However,
federal funds can only be expended if the foundation secures matching funds from a nonfederal

61 Foundation for Food and Agriculture Research, “What We Do,” https://foundationfar.org/what-we-do/.
62 Foundation for Food and Agriculture Research, “RIPE Reinvestment,” https://foundationfar.org/ripe/.
63 Foundation for Food and Agriculture Research, “How We Work,” https://foundationfar.org/about-us/how-we-work/.
64 7 U.S.C. §5939(e).
65 Foundation for Food and Agriculture Research, By-Laws of Foundation for Food and Agriculture Research,
https://foundationfar.org/about/governance.
66 7 U.S.C. §5939(e)(4) and 7 U.S.C. §5939(f)(4).
67 Foundation for Food and Agriculture Research, “Advisory Councils,” https://foundationfar.org/advisory-councils/.
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source.68 In testimony before the Senate, the executive director of FFAR, Dr. Sally Rockey,
stated:
What we have discovered over the past two years is that we have two distinct advantages
over other government-established research foundations. First is our public funding, which
gives FFAR the flexibility to seek out diverse partnerships, especially with the private
sector. Rather than raising money for a government agency, which is the model for most
government established research foundations, FFAR leverages public funding—more than
doubling that funding—for the public good and, in the process, develops a new community
of partners. Second is our independence, which allows us to focus almost exclusively on
results. When partners are focused just on the science and equally invested in seeing
measurable outcomes as soon as possible, new partnerships may develop.69
In 2020, FFAR awarded 64 grants and $42 million in funding ($124 million when matching funds
are included).70
In the Agriculture Improvement Act of 2018 (P.L. 115-334), Congress directed the Secretary of
Agriculture to transfer an additional $185 million to FFAR “to leverage private funding, matched
with federal dollars to support public agricultural research”; however, these federal funds were
not to be transferred until FFAR provided Congress with a strategic plan detailing how the
foundation will become self-sustaining.71 Congress required the strategic plan to describe
agricultural research opportunities and objectives identified by FFAR’s advisory councils and
approved by the board, and to provide transparency into the foundation’s grant review and awards
process.72 FFAR released the required strategic plan in 2019; the plan outlines several actions that
the foundation will pursue to diversify its funding base, but also indicates that federal funds are a
“critical component of FFAR’s model.”73
Henry M. Jackson Foundation for the Advancement of Military
Medicine
In 1983, Congress created the Foundation for the Advancement of Military Medicine—now
known as the Henry M. Jackson Foundation for the Advancement of Military Medicine (HJF)—to
carry out and participate in cooperative medical research and education projects with the
Uniformed Services University of the Health Sciences (USU).74 In describing the purpose and
role of HJF, Congress stated:

68 7 U.S.C. §5939(g).
69 Testimony of Dr. Sally Rockey, Executive Director of the Foundation for Food and Agriculture Research, in U.S.
Congress, Senate Committee on Agriculture, Nutrition, and Forestry, Agricultural Research: Perspectives on Past and
Future Successes for the 2018 Farm Bill, 115th Cong., 1st sess., June 15, 2017, S. Hrg. 115-172 (Washington, DC:
GPO, 2017).
70 Foundation for Food and Agriculture Research, 2020 Impact Report:
Accelerating FFAR Research & Impact, Washington, DC, 2020, p. 6, https://1r0ixf4416603ktoc7u7n6pe-
wpengine.netdna-ssl.com/wp-content/uploads/2021/06/FFAR2020ImpactReportFINAL.pdf.
71 U.S. Congress, House Committee on Agriculture, Agriculture Improvement Act of 2018, conference report to
accompany H.R. 2, 115th Cong., 2nd sess., December 10, 2018, H.Rept. 115-1072 (Washington: GPO, 2018), pp. 698-
699.
72 7 U.S.C. §5939(f)(3)(B).
73 Foundation for Food and Agriculture Research, Strategic and Sustainability Plan, Washington, DC, 2019,
https://foundationfar.org/about/governance/.
74 P.L. 98-132. The mission of the Uniformed Services University of Health Sciences—charted by Congress in 1972
(P.L. 92-426)—is to educate, train, and prepare uniformed services health professionals and scientists in support of the
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The Foundation will be a nonprofit, charitable corporation which will receive gifts, grants
and legacies on behalf of both itself and the Uniformed Services University…. [By]
channeling private resources to the Uniformed Services University, the Foundation will
help the University and military medicine maintain advanced scientific teaching and
research. In addition, the Foundation will support the growing international role of the
University in its cooperative research in other countries and in its programs with medical
schools training military officers both here and abroad.75
In general, HJF implements its mandate by offering research support and services to USU and
other military research centers and facilities, including proposal development, research program
administration and management, regulatory compliance, technical staffing, and technology
transfer assistance.76 P.L. 98-132 authorized HJF to enter into contracts with USU “for the
purposes of carrying out cooperative enterprises in medical research, medical consultation, and
medical education, including contracts for the provision of such personnel and services as may be
necessary to carry out such cooperative enterprises.”77
According to HJF, more than 1,100 of HJF’s employees participated in or supported collaborative
research and education projects at USU in FY2018.78 For example, HJF entered into a license
agreement from the USU-HJF Joint Office of Technology Transfer with Profectus BioSciences to
develop a human vaccine for the Nipah virus—an infection that can lead to inflammation of the
brain and respiratory illness—based on a technology created more than 15 years ago by a USU
scientist. Specifically, HJF, USU, and Profectus are collaborating on the development of a clinical
assay to evaluate the Nipah virus vaccine response. The collaborative research is supported, in
part, by NIH.79
HJF is governed by a council of directors composed of appointed and ex officio members,
including the chair and ranking members of the Senate and House Committees on Armed
Services and the Dean of USU. The ex officio members are responsible for appointing the other
members of the council of directors.80 In 2018, Congress increased the number of appointed
members from four to six.81 A council-appointed executive director oversees the day-to-day
operations of HJF.
In 1986, Congress appropriated $10 million to HJF “to support the purposes of the Foundation, its
on-going educational and public services programs and to serve as a memorial to the late Senator
Henry M. Jackson.”82 However, HJF’s revenue is generally derived from the administration of
grants and contracts—HJF manages or administers grants and contracts on behalf of USU or
other military research centers and collects indirect costs or overhead associated with the

U.S. military and public health systems.
75 U.S. Congress, Senate Committee on Armed Services, Foundation for the Advancement of Military Medicine, report
to accompany S. 653, 98th Cong., 1st sess., March 31, 1983, S. Rept. 98-39 (Washington: GPO, 1983), p. 2.
76 Henry M. Jackson Foundation for the Advancement of Military Medicine, “Services,” https://www.hjf.org/services.
77 10 U.S.C. §178(g)(1).
78 Henry M. Jackson Foundation for the Advancement of Military Medicine, HJF Annual Report 2018, Bethesda, MD,
2019, p. 5, https://annualreports.hjf.org/download-pdf/.
79 Ibid., p. 8 and Henry M. Jackson Foundation for the Advancement of Military Medicine, “Developing Vaccines and
Therapies for the Highly Pathogenic Nipah and Hendra Viruses,” press release, March 25, 2019,
https://www.globenewswire.com/news-release/2019/03/25/1760274/0/en/Developing-vaccines-and-therapies-for-the-
highly-pathogenic-Nipah-and-Hendra-viruses.html.
80 10 U.S.C. §178(c).
81 Section 739 of P.L. 115-232, the John S. McCain National Defense Authorization Act for Fiscal Year 2019.
82 P.L. 99-591.
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provided services. According to HJF, in FY2021, the foundation received $561.7 million in grants
and contracts and expended $503.0 million on program services associated with research grants
and contracts.83 According to USAspending.gov, since FY2008, HJF has received $7.6 billion in
federal grants, contracts, and other financial assistance, primarily from the Department of
Defense.84
Department of Veterans Affairs Nonprofit Research and Education
Corporations
In 1988, Congress authorized the Secretary of Veterans Affairs (VA) to establish a nonprofit
corporation (NPC) at any of the VA medical centers “to provide a flexible funding mechanism”
and facilitate the conduct of approved research.85 Congress extended the authority of NPCs in
1999 to include approved education and training activities (e.g., educational courses for patients
and families and training for VA employees associated with new technologies or specialties).86
Congress also authorized any NPC to facilitate the conduct of approved research and education
activities at more than one VA medical center (such NPCs are known as multi-medical center
research corporations). In general, NPCs implement their mandate by providing research and
management services to VA medical researchers conducting projects using non-VA funds.
In describing the need for NPCs, Congress indicated that support for research from non-VA
funding sources, including NIH, DOD, private foundations, and companies, benefited veteran
patients, where existing mechanisms for administering non-VA funds had disadvantages.87 A
committee report on the authorizing legislation stated:
Funds that are channeled through affiliated medical schools [to VA medical centers] are
subject to the terms and conditions which the school applies to funds obtained by
researchers employed by the school. In many cases, this means that a percentage, which
varies from 15 to 40 percent or more, of the funds obtained is retained by the medical
school for “overhead” and related expenses of the school.88
In contrast, by authorizing NPCs to accept, administer, retain, and spend non-VA research funding
on behalf of VA investigators, indirect costs or overhead derived from such funds could be
applied to the VA medical center.89 According to the U.S. Government Accountability Office
(GAO):
Nonprofit corporations support VA’s research environment by funding a portion of the
department’s research needs, such as laboratory equipment and improvements to

83 Henry M. Jackson Foundation for the Advancement of Military Medicine, HJF Annual Report 2020,
https://app.yearly.report/newbuilder/#/from/hjf/fy-2021-annual-report.
84 CRS analysis of USAspending.gov (accessed on May 25, 2022) which contains information on entities that have
received federal awards in the form of contracts, grants, loans, or other financial assistance back to FY2008.
85 P.L. 100-322.
86 P.L. 106-117.
87 U.S. Congress, House Committee on Veterans’ Affairs, Veterans’ Omnibus Health Care Amendments of 1987, report
to accompany H.R. 3449, 100th Cong., 1st sess., October 15, 1987, H. Rept. 100-373 (Washington: GPO, 1987), p. 4.
88 Ibid.
89 VA investigators often have dual appointments at both a VA medical center and its affiliated medical school,
meaning that either institution can serve as the prime contractor or awardee on behalf of the VA researcher.
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infrastructure, and by providing flexible personnel and contracting arrangements to
respond to investigators’ needs.90
The governance structure of NPCs is specified in the statute providing the authority for their
establishment and further defined by VA procedures and instructions.91 Each NPC is governed by
a board of directors with its day-to-day operations overseen by an executive director. The VA
Secretary is responsible for appointing all members of an NPC’s board of directors. Each board of
directors must include the director of the VA medical center, the chief of staff, and associate
chief(s) of staff of the medical center—all acting within their official capacities—and two
nonfederal members. Additionally, the board of directors of a multi-medical research corporation
must include the director of each of the VA medical centers served by the NPC. The executive
director of an NPC is appointed by its board of directors with the concurrence of the VA Under
Secretary of Health.92
Congress placed NPCs under the jurisdiction of VA’s Inspector General; required each NPC to
conduct regular audits and provide an annual statement of operations, activities, and
accomplishments to VA; and made all NPC employees, including members of the board of
directors, subject to conflict of interest policies adopted by the NPC.93 Additionally, VA conducts
oversight of NPCs through the agency’s Nonprofit Program Oversight Board (NPOB), the
Nonprofit Program Office (NPPO), and the Veteran Health Administration’s Chief Financial
Officer (VHA CFO).94 Specifically:
 The NPOB is VA’s senior management oversight body for NPCs. It reviews the
activities of NPCs to ensure they are consistent with VA policies and makes
recommendations to the VA Secretary (through the Under Secretary of Health)
regarding any changes in NPC policy.
 The NPPO serves as a liaison between VHA and the NPCs. It provides oversight,
guidance, and education to the NPCs to ensure compliance with VA policies and
regulations, conducts triennial reviews of NPCs, compiles NPC data for an
annual report to Congress, and ensures any corrective measures are implemented.
 The VHA CFO provides financial oversight of NPCs.95
There are currently 80 active NPCs located in 42 states, Puerto Rico, and the District of
Columbia.96 According to VA, in 2021, NPCs generated $275 million in revenue.97 VA describes

90 U.S. Government Accountability Office, VA Health Care: Nonprofit Corporations Enhance VA Research, but Would
Benefit from Increased Oversight, GAO-02-1103T, September 19, 2002, p. 2, https://www.gao.gov/assets/110/
109582.pdf.
91 38 U.S.C. §7363 and Veterans Health Administration, VA Nonprofit Research and Education Corporations,
Department of Veterans Affairs, VHA Handbook 1200.17, Washington, DC, May 9, 2017, http://www.va.gov/
vhapublications/ViewPublication.asp?pub_ID=3194.
92 38 U.S.C. §7363.
93 38 U.S.C. §7366.
94 Veterans Health Administration, VA Nonprofit Research and Education Corporations, Department of Veterans
Affairs, VHA Handbook 1200.17, Washington, DC, May 9, 2017, pp. 2-3, http://www.va.gov/vhapublications/
ViewPublication.asp?pub_ID=3194.
95 Ibid.
96 U.S. Department of Veterans Affairs, FY2023 Budget Submission, Volume II: Medical Programs and Information
Technology Programs, pp. VHA-633-636, https://www.va.gov/budget/docs/summary/fy2023-va-budget-volume-ii-
medical-programs-and-information-technology.pdf.
97 Ibid. Revenue can include grants, gifts, fees, contracts, investment income, and royalties, among other sources.
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NPCs as “self-sustaining…. [F]unds are not received into a government account. No
appropriation is required to support these activities.”98 However, approximately 70% of the
revenue generated by NPCs in 2017 ($183 million) was from federal sources—primarily NIH and
DOD grants and contracts. VA states that from 2008 to 2017 NPCs contributed $2.2 billion to VA
research.99
Proposed Agency-Related Nonprofit R&D Organizations
Department of Energy Affiliated Foundation
In 2020, Congress directed the Department of Energy (DOE) to assess the value of creating an
agency-related nonprofit foundation. DOE contracted with the National Academy of Public
Administration (NAPA) to conduct the required study. NAPA recommended
the creation of a DOE foundation that would be complementary and supplementary to
DOE, National Laboratories, and the lab-associated foundations. Further, the Panel
recommends the adoption of a “networked approach” that would involve a national level
foundation working closely with current and future lab-associated foundations.100
In 2021, the Partnerships for Energy Security and Innovation Act of 2021 (S. 1359 and H.R.
4863) was introduced. The legislation would require the Secretary of Energy to establish the
“Foundation for Energy Security and Innovation” with the mission of advancing collaboration
with energy researchers, institutions of higher education, industry, and nonprofit and
philanthropic organizations to accelerate the commercialization of energy technologies to support
the mission of the Department; and to support the mission of DOE. S. 1359 and H.R. 4863 were
incorporated into S. 1260, the United States Innovation and Competition Act of 2021 and H.R.
4521, the America COMPETES Act of 2022, respectively. Congress is in the process of
conferencing S. 1260 and H.R. 4521.
Issues for Congress
In an April 2019 report, the National Institute of Standards and Technology described benefits
that might be realized if Congress provided all federal R&D agencies with the authority to
establish agency-related nonprofit research foundations.101 For example, they can actively seek
“gifts and other monetary donations from private donors and organizations,” and they “have
facilitated technology commercialization and generated revenue to reinvest in R&D.”102
In addition, while government agencies are, with certain exceptions, subject to management laws
designed to ensure accountability, transparency, and fairness, agency-related foundations may be
exempt from them. Such exemptions may facilitate flexibility, but they may also make it difficult

98 Ibid.
99 U.S. Department of Veterans Affairs, 2017 NPC Annual Report to Congress Summary, July 12, 2018,
https://www.research.va.gov/programs/nppo/docs/2017-ARC-NarrativeSummary.docx.
100 National Academy of Public Administration, An Innovation Foundation for DOE: Roles and Opportunities,
Washington, DC, January 2021, https://napawash.org/academy-studies/an-assessment-of-the-value-of-a-non-profit-
foundation-to-promote-department-of-energy-technology-transfer-to-the-marketplace.
101 National Institute of Standards and Technology, Return on Investment Initiative for Unleashing American
Innovation, NIST Special Publication 1234, Gaithersburg, MD, April 2019, pp. 2, 64-65, https://doi.org/10.6028/
NIST.SP.1234.
102 Ibid., pp. 59-60.
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for stakeholders to verify on an ongoing basis that the foundation’s activities are directed to the
public good rather than private gain.
Prior to extending the authority to establish agency-related nonprofit research foundations and
corporations to additional federal agencies and laboratories there are a number of issues that
Congress might consider. The following sections examine some of these issues, including
transparency, independence, and effectiveness.
Conflict of Interest and Industry Influence
To date, most federal agencies with affiliated nonprofit research foundations or corporations work
in the area of medicine and public health—an area where public trust is considered essential. The
conflict of interest policies of affiliated nonprofit research foundations and corporations vary. For
example, all HJF employees are required to submit annual conflict disclosure and certification
forms; under its cooperative agreement with the CDC, the CDC Foundation is required to conduct
a conflict of interest review prior to accepting a gift for the CDC from a potential donor; and VA
employees serving as NPC directors are subject to federal conflict of interest laws and
regulations.103
Recent media reports and investigations have nevertheless raised concerns about conflicts of
interest and the potential for undue industry influence in public-private R&D partnerships formed
and managed by agency-related nonprofit foundations.104 According to some, industry
involvement in R&D partnerships has the potential to erode public trust and confidence in federal
agency decisionmaking, which may be based, in part, on the results of R&D supported by the
public-private partnership.105 Others assert that issues associated with conflict of interest are
overstated and rare, that other biases—beyond financial ties—also influence research, and that
policy responses to such concerns have been overly burdensome and are impeding the translation
of R&D into new products and technologies.106 Three examples illustrate these conflict of interest
and undue influence concerns.
R&D Partnership Between the National Football League and NIH
In 2015 and 2016, reporting by ESPN and others alleged that the National Football League (NFL)
attempted to influence the selection of a grant recipient by NIH for a study on a degenerative
brain disease known as CTE, or chronic traumatic encephalopathy.107 NIH had planned to fund

103 Henry M. Jackson Foundation for the Advancement of Military Medicine, Code of Ethics, January 2018, p. 15,
https://www.hjf.org/ethics#tab-1; CDC, Administration of Gifts to CDC, 2016, p. 4, https://www.cdc.gov/maso/Policy/
ADMINISTRATION-OF-GIFTS_Policy_20170329_Version-for-CDC-gov_508.pdf; and Veterans Health
Administration, VA Nonprofit Research and Education Corporations, Department of Veterans Affairs, VHA Handbook
1200.17, Washington, DC, May 9, 2017, p. 9, http://www.va.gov/vhapublications/ViewPublication.asp?pub_ID=3194.
104 For example, Lev Facher, “Signaling Concern over Industry Funding, Congress Presses for Transparency at Groups
Supporting NIH, CDC,” Stat News, July 2, 2018, https://www.statnews.com/2018/07/02/congress-transparency-
funding-nih-cdc/.
105 Nell Greenfieldboyce, “FDA to Fund Controversial Research Foundation,” NPR, April 3, 2012,
https://www.npr.org/sections/health-shots/2012/04/03/149931282/fda-to-fund-controversial-research-foundation.
106 Ronald Bailey, Scrutinizing Industry-Funded Science: The Crusade Against Conflicts of Interest, American Council
on Science and Health, New York, NY, March 2008, p. 4, https://www.acsh.org/sites/default/files/111408281-
Scrutinizing-Industry-Funded-Science-The-Crusade-Against-Conflicts-of-Interest.pdf; and Aaron E. Carroll,
“Congratulations on the Promotion. But Did Science Get a Demotion?,” New York Times, December 31, 2018,
https://www.nytimes.com/2018/12/31/upshot/congratulations-on-the-promotion-but-did-science-get-a-demotion.html.
107 Steve Fainaru and Mark Fainaru-Wada, “NFL Backs Away from Funding BU Brain Study; NIH to Fund It Instead,”
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the CTE study from a $30 million NFL donation to NIH through FNIH. Democratic committee
staff of the House Committee on Energy and Commerce launched an investigation of the
allegations and issued a report in May 2016. The report stated:
Democratic Committee staff received evidence to support the allegations that the NFL
inappropriately attempted to influence the selection of NIH research applicants funded by
the NFL’s $30 million donation to NIH…. Despite the NFL’s attempts to influence the
selection of research applicants, the integrity of the peer review process was preserved and
funding decisions were made solely based on the merit of the research applications.108
The report included findings and recommendations directed at FNIH and its role in the creation
and management of R&D partnerships between NIH and the private sector. Specifically, the
investigation found that “FNIH did not adequately fulfill its role of serving as an intermediary
between NIH and the NFL” and recommended the following actions:
 FNIH must establish clearer guidelines regarding donor communications with
NIH.
 FNIH must come to a mutual understanding with donors at the beginning of the
process regarding their degree of influence over the research they are funding and
remind donors that NIH policy prohibits them from exerting influence at any
point in the grant decision-making process.
 FNIH should provide donors with the clear, unambiguous language from the NIH
Policy Manual, which states that a donor may not dictate terms that include “any
delegation of NIH’s inherently governmental responsibilities or decision-
making,” or “participation in peer review or otherwise exert real or potential
influence in grant or contract decision-making.”
 NIH and FNIH should jointly develop a process to address concerns about donors
acting improperly.109
FNIH issued the following statement in response to the report:
The FNIH acted appropriately, with integrity and transparency, in fulfilling its mandate
under SHRP [Sports and Health Research Program]. As acknowledged by the Democratic
Staff report, the governing documents among the FNIH, NIH and NFL made clear that the
NIH had exclusive control over the scientific and administrative aspects of the program.
The report makes recommendations regarding communication issues that the FNIH has
already identified and taken steps to address. The FNIH has strengthened protocols around
communications among NIH, NIH researchers and FNIH donors that will prevent
unauthorized contact among parties.

ESPN, December 22, 2015, https://www.espn.com/espn/otl/story/_/id/14417386/nfl-pulls-funding-boston-university-
head-trauma-study-concerns-researcher; and Ike Swetlitz, “NFL’s ‘Unrestricted’ Grant to Fund Brain Research Has
Strings Attached,” STAT News, January 8, 2016, https://www.statnews.com/2016/01/08/nfl-concussion-research-grant/.
108 Democratic Staff, The National Football League’s Attempt to Influence Funding Decisions at the National Institutes
of Health, U.S. House of Representatives, Committee on Energy and Commerce, Washington, DC, May 2016, p. 3,
https://democrats-energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/
Democratic%20Staff%20Report%20on%20NFL%20NIH%20Investigation%205.23.2016.pdf.
109 Ibid., pp. 3-4.
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The FNIH has had a long history of successful and productive public-private partnerships
in support of the NIH mission. These adjustments to governing agreements will help ensure
the success of future scientific partnerships in support of human health.110
On September 15, 2016, four Republican members of the House Committee on Energy and
Commerce sent a letter to the Inspector General of the Department of Health and Human Services
related to the allegations of undue influence by the NFL. The letter stated:
There appear to be important questions and concerns related to these events that have not
been adequately vetted or addressed…. This grant award has become the source of
tremendous public debate and, therefore, clear answers and lessons are necessary. For these
the reasons, the Committee refers this matter to your attention and requests a thorough and
objective review by the Office of the Inspector General to assess whether the policies and
procedures concerning public-private partnerships under the authority of FNIH were
followed, and if not, what revisions or reforms should be considered. This will help SHRP,
and other public-private partnerships, avoid similar distractions in the future so all parties
can focus on what matters most—the science.111
Opioid Epidemic Public-Private Partnership
In 2018, NIH was engaged with FNIH and potential donors, including pharmaceutical companies,
regarding the development of a public-private partnership that would seek to address the opioid
crisis. Potential conflicts of interest and ethical concerns were raised by both NIH and FNIH. The
Director of NIH asked a working group of the Advisory Committee to the NIH Director (ACD)
and the FNIH Board to examine the appropriateness of establishing a partnership between NIH,
FNIH, and various pharmaceutical companies.112 On March 16, 2018, the FNIH Board held a
meeting to discuss the possibility of forming such a partnership. The FNIH Board decided
that an approach that relies disproportionately on input and financing from pharmaceutical
companies is not appropriate in this circumstance. The FNIH is uncomfortable seeking or
receiving monetary donations from any pharmaceutical company or industry representative
at this time to support implementation of the research plan as presented. Doing so poses
unacceptably high risk of public skepticism concerning the eventual scientific outcomes
given the responsibility some companies may bear in having created the crisis. Also, it
would likely undermine public confidence in the many other valuable public-private
partnerships that the NIH and FNIH have created and will create to improve human
health.113
The principal recommendation of the ACD working group was that “to mitigate the risk of real or
perceived conflict of interest, it would be preferable if only Federal funds were used to support
the research efforts included in this public-private partnership.”114 The working group also offered

110 Foundation for the National Institutes of Health, “The FNIH’s Statement on the Democratic Staff Report of the
Committee on Energy and Commerce,” press release, May 23, 2016, https://fnih.org/news/announcements/fnihs-
statement-democratic-staff-report-committee-energy-and-commerce.
111 Letter from Chairman Fred Upton et al. to the Honorable Daniel Levinson, Inspector General, U.S. Department of
Health and Human Services, September 15, 2016, https://web.archive.org/web/20180926092407if_/https://archives-
energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/114/letters/
20160915HHS_OIG.pdf.
112 Letter from Lawrence A. Tabak, Principal Deputy Director, National Institutes of Health, to Maria C. Freire,
President and Executive Director, Foundation for the National Institutes of Health, February 23, 2018.
113 Letter from Maria C. Freire, President and Executive Director, Foundation for the National Institutes of Health, to
Lawrence A. Tabak, Principal Deputy Director, National Institutes of Health, March 20, 2018.
114 Advisory Committee to the Director, Working Group on Ethical Considerations for Industry Partnerships on
Research to Help End the Opioid Crisis, Ethical Considerations for Industry Partnerships on Research to Help End the
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a number of recommendations if a public-private partnership were to be established, including
that any industry funding should be provided without preconditions and in full, that NIH should
publicly disclose its research plan for the partnership, and that the agency should clarify and
define the governance structure associated with the collaboration.115
In April 2018, NIH launched the Helping to End Addiction Long-term (HEAL) Initiative—an
agency-wide “effort to speed scientific solutions to stem the national opioid public health
crisis.”116 In a press release on the use of public-private partnerships as part of HEAL, the
Director of NIH stated:
I fully embrace [the ACD Working Group’s] recommendation that NIH should vigorously
address the national opioid crisis with government funds and decline cash contributions
through partnerships from the private sector.
It is clear, however, that the opioid crisis is beyond the scope of any one organization or
sector. NIH and biopharmaceutical companies bring unique skills and assets to bear on this
crisis. NIH will use the ACD guidance as we continue our discussions with
biopharmaceutical organizations to advance focused medication development for addiction
and pain…We agree with and appreciate the ACD’s guidance to verify donated assets and
tailor the governance structures for each initiative that may be pursued through public-
private partnerships to ensure appropriate oversight and guidance. Any partnerships that
NIH does establish with biopharmaceutical organizations as part of the HEAL Initiative
will be done with the utmost transparency.117
Coca-Cola Funding for Obesity Research
Some have raised concerns regarding the ability of industry to influence CDC and FDA
decisionmaking by way of donations to the CDC Foundation and Reagan-Udall Foundation. For
example, some have questioned donations made by the Coca-Cola Company to the CDC
Foundation for research and other activities associated with obesity and diet issues.118 In
February, two Members of Congress sent a letter asking the Department of Health and Human
Services’ Inspector General to “investigate the relationship between the CDC and Coca-Cola
outlined in this report [a 2019 paper by Hessari et al.], determine whether there is a broader
pattern of inappropriate industry influence at the agency, and make recommendations to address
this issue.”119
In addition to managing conflicts of interest that may result from public-private partnerships
facilitated by an agency-related nonprofit foundation, a 2016 report by a working group of the

Opioid Crisis, National Institutes of Health, Bethesda, MD, March 2018, https://acd.od.nih.gov/documents/
presentations/032018_opioids-report.pdf.
115 Ibid.
116 National Institutes of Health, “NIH Launches HEAL Initiative, Doubles Funding to Accelerate Scientific Solutions
to Stem National Opioid Epidemic,” press release, April 4, 2018, https://www.nih.gov/news-events/news-releases/nih-
launches-heal-initiative-doubles-funding-accelerate-scientific-solutions-stem-national-opioid-epidemic.
117 National Institutes of Health, “Statement on Public-Private Partnerships as Part of the NIH HEAL Initiative,” press
release, April 13, 2018, https://www.nih.gov/about-nih/who-we-are/nih-director/statements/statement-public-private-
partnerships-part-nih-heal-initiative.
118 Sheila Kaplan, “New C.D.C. Chief Saw Coca-Cola as Ally in Obesity Fight,” The New York Times, July 22, 2017,
https://www.nytimes.com/2017/07/22/health/brenda-fitzgerald-cdc-coke.html and Nason Maani Hessari, Gary Ruskin,
and Martin McKee, et al., “Public Meets Private: Conversations Between Coca-Cola and the CDC,” The Milbank
Quarterly, vol. 97, no. 1 (2019), pp. 74-90.
119 Congresswoman Chellie Pingree, “Pingree, DeLauro to HHS Inspector General: Investigate Coca-Cola’s Lobbying
of CDC,” press release, February 4, 2019, https://pingree.house.gov/news/documentsingle.aspx?DocumentID=291.
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Advisory Committee to the CDC Director noted the need for clarity in managing conflict of
interest between the nonprofit foundation and the federal agency itself. The working group
pointed out that the CDC Foundation “benefits financially from the grants it accepts and manages
on the CDC’s behalf,” and noted that “ongoing oversight and management transparency are
essential components of a conflict-of-interest policy, particularly where, as here, one of the
partners is an agency whose greatest asset is the confidence of the public in its impartiality and
integrity.”120
Transparency and Accountability
In response to concerns regarding conflict of interest and the potential for industry influence, in
addition to the need to maintain public confidence in related decisionmaking, some have called
for additional transparency in the development and management of public-private partnerships.121
These calls extend to agency-related nonprofit research foundations.
For example, the Advisory Committee to the Director of the CDC recommended that the CDC
should expect the CDC Foundation to provide the agency with a “complete record of evidence”
and a “fully reasoned analysis” as to why a proposed public-private partnership would meet the
agency’s standards for entering into a private financial relationship. The advisory committee
recommended that CDC only enter into a private financial relationship if the proposed project
aligns with a stated CDC priority, the projected benefits to public health outweigh any potential
risks to public trust in CDC, and the proposed project does not primarily benefit the private
funder or position the private funder to exercise undue influence over CDC.122
Some have also called for the harmonization of policies, procedures, and standards used by
federal agencies and agency-related nonprofit research foundations in the evaluation of proposed
public-private partnerships and in addressing conflict of interest and undue influence concerns
associated with such partnerships.123
In 2018, House appropriations report language directed both the CDC Foundation and FNIH to
abide by existing reporting requirements and include in their respective annual reports
the source and amount of all monetary gifts to the Foundation, as well as the source and
description of all gifts of real or personal property. Each annual report shall disclose a
specification of any restrictions on the purposes for which gifts to the Foundation may be
used. The annual report shall not list “anonymous” as a source for any gift that includes a
specification of any restrictions on the purpose for which the gift may be used.124

120 Ethical Considerations for Public Private Partnerships Workgroup, Summary Report Submitted to the Advisory
Committee to the Director, 2016, pp. 2-3, https://www.cdc.gov/partners/pdf/
Ethical_Considerations_for_Public_Private_Partnerships_Recommendations_to_ACD.pdf.
121 Bernard Lo and Deborah Grady, “Protecting NIH’s Integrity and Trustworthiness in Public-Private Partnerships,”
JAMA, vol. 320, no. 5 (2018), pp. 439-440.
122 Ethical Considerations for Public Private Partnerships Workgroup, Summary Report Submitted to the Advisory
Committee to the Director, 2016, p. 6, https://www.cdc.gov/partners/pdf/
Ethical_Considerations_for_Public_Private_Partnerships_Recommendations_to_ACD.pdf.
123 Bernard Lo and Deborah Grady, “Protecting NIH’s Integrity and Trustworthiness in Public-Private Partnerships,”
JAMA, vol. 320, no. 5 (2018), pp. 439-440.
124 U.S. Congress, House Committee on Appropriations, Departments of Labor, Health and Human Services, and
Education, and Related Agencies Appropriations Bill, 2019, report to accompany H.R. 6470, 115th Cong., 2nd sess.,
July 23, 2018, H.Rept. 115-862 (Washington: GPO, 2018), pp. 52, 73-74.
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According to media reports, officials from FNIH and the CDC Foundation assert they are in
compliance with existing disclosure requirements as outlined in their governing statutes and their
annual reporting is similar to other nonprofit organizations.125
Independence and Oversight
By design, quasi-governmental entities, including agency-related nonprofit research foundations
and corporations, are independent from the federal government. Congress explicitly states in the
statutes creating each of the organizations described above that the entity is “not an agency or
instrumentality of the United States.” In addition, these entities generally are not controlled by
federal officials. However, Congress also structured these organizations so they would be
associated with and in some instances largely reliant on the federal agencies they were created to
support. The degree of independence an agency-related nonprofit research foundation or
corporation has—and by extension the degree of congressional oversight and influence—varies
(i.e., the more independent, the less opportunity for oversight and vice versa). This variability can
be ascribed, in large part, to the primary function of the organization and the governance structure
established by Congress.
For example, the primary function of HJF and the VA NPCs is to provide research and grant
management services to USU and VA medical researchers, respectively. These researchers are
full- or part-time federal employees who are, in general, conducting approved research using
federal funds from other agencies (NIH and DOD). The financial strength of these entities is thus
closely tied to the ability of USU and VA researchers to compete successfully for NIH, DOD, and
other research grants. Additionally, the boards governing HJF and VA NPCs include Members of
Congress and federal officials. Specifically, the board of a VA NPC must include the director,
chief of staff, and associate chief(s) of staff of the VA medical center—all acting in their official
capacities—and the board of HJF includes the chair and ranking members of the Senate and
House Committees on Armed Services. These factors likely make HJF and VA NPCs less
independent than some of the other agency-related nonprofit foundations described in this report.
However, given their dependency—in particular on other federal funds—several questions arise:
Why are these entities needed? Are there alternative mechanisms for administering research funds
from other federal agencies? Should these entities be soliciting more private funds?
Comparatively, FNIH, the CDC Foundation, and the Reagan-Udall Foundation likely have more
autonomy given their primary function of raising funds from the private sector to benefit and
advance the mission of their affiliated federal agencies. Nonetheless, the success of these entities
requires some level of interconnectedness to ensure their efforts are closely aligned with the
priorities and needs of the federal agencies they support. Additionally, FNIH, the CDC
Foundation, and the Reagan-Udall Foundation all receive administrative and operating costs from
their affiliated federal agencies, in addition to having federal officials as ex officio members of
their boards. These factors likely provide the federal agencies with the ability to influence and
shape the relationship. The use of federal funds in supporting the operating expenses of these
entities also provides a mechanism for congressional oversight.
FFAR’s purpose to advance the research mission of USDA is similar to that of FNIH, the CDC
Foundation, and the Reagan-Udall Foundation. However, the way in which FFAR executes its
mission—primarily as a grant-making organization—may offer more independence. Congress
tasked FFAR with developing and pursuing an agricultural R&D agenda that minimizes the

125 Jeffrey Mervis, “U.S. Lawmakers Want NIH and CDC Foundations to Say More About Donors,” Science, June 29,
2018, https://www.sciencemag.org/news/2018/06/us-lawmakers-want-nih-and-cdc-foundations-say-more-about-
donors.
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duplication of existing USDA efforts and is focused on unmet needs and emerging areas of
national and international significance. Currently, FFAR executes its R&D agenda by leveraging
federal funds with nonfederal sources. The use of federal funds provides Congress with an
effective oversight mechanism. Congressional intent, however, is for FFAR to become self-
sufficient. In the Agriculture Improvement Act of 2018 (P.L. 115-334), Congress made the
transfer of federal funds contingent upon the development of a strategic plan detailing how FFAR
will become self-sustaining.126 Opportunities for congressional oversight or influence may
diminish as FFAR becomes self-sustaining. That being said, FFAR’s strategic plan states:
This strategic planning and sustainability exploration demonstrates that FFAR requires
Congressional funding to remain relevant, viable, to maintain velocity, and increase impact
toward conquering the food and agriculture challenges of this time…. In the event that
public funding for FFAR diminishes, the Foundation would be severely limited in its ability
to deliver on the ambition and scale of impact that Congress originally envisioned. In this
scenario, FFAR’s capacity to fund ambitious, potentially transformative research projects
would be restricted. Indeed, stakeholders indicate that FFAR will find it much more
challenging to bring partners to the table and mobilize private funding as its credibility and
matching power will be weakened without the “halo effect” of its Congressional funding
and mandate.127
FFAR’s strategic plan also indicates that the foundation will increase the nonfederal matching
requirement for some projects, diversify its co-funders, develop an annual fundraising program,
pursue fees for services, and expand the size and number of consortia as part of its sustainability
plan.128
Effectiveness and Need
To date, the effectiveness of agency-affiliated nonprofit research foundations or corporations has
not been formally assessed. In a 2002 report on the VA NPCs, GAO noted, “VA headquarters has
not evaluated nonprofit corporations to measure their effectiveness or compare their operations.
This type of high-level oversight and evaluation is a critical element of success.” It is also unclear
what might constitute an appropriate measure of success: number of partnerships formed? amount
of private funds raised? number of technologies commercialized?
Some have argued—based on the amount of private funds raised—that the Reagan-Udall
Foundation is not meeting expectations and is less successful than the CDC Foundation and
FNIH.129 The Reagan-Udall Foundation has raised approximately $21 million over the last decade
for FDA. In comparison, FNIH provided NIH with that amount in a single year ($22 million in
2017). Lower than expected fundraising efforts have led some to question the purpose and need
for the Reagan-Udall Foundation.130
It is difficult to determine the degree to which the partnerships developed and managed by some
of the agency-affiliated nonprofit research foundations would have occurred in the absence of

126 U.S. Congress, House Committee on Agriculture, Agriculture Improvement Act of 2018, conference report to
accompany H.R. 2, 115th Cong., 2nd sess., December 10, 2018, H.Rept. 115-1072 (Washington: GPO, 2018), pp. 698-
699.
127 Foundation for Food and Agriculture Research, Strategic and Sustainability Plan, Washington, DC, 2019, pp. 8, 34,
https://foundationfar.org/about/governance/.
128 Ibid., p. 8.
129 Ike Swetlitz, “Questions About Funding and Purpose Loom over a Foundation Congress Created to Help the FDA,”
STAT News, October 9, 2018, https://www.statnews.com/2018/10/09/reagan-udall-foundation-struggles/
130 Ibid.
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such foundations. Federal agencies engage in public-private partnerships through other
mechanisms, including cooperative research and development agreements, and while federal
agencies are not permitted to solicit gifts from the private sector, many are authorized to accept
donations.
Concluding Observations
Congress established each of the agency-related nonprofit research foundations and corporations
described in this report with the aim of advancing the R&D mission of the associated federal
agency. While the way each organization pursues its mandate varies, three broad categories of
activity emerge: (1) soliciting private funds to support R&D performed by federal scientists; (2)
soliciting private funds (leveraged against federal funds in the case of FFAR) to support R&D
performed by nonfederal researchers; and (3) administering and managing research funds from
federal and nonfederal sources. These activities are often carried out as part of public-private
R&D partnerships formed and managed by an agency-related nonprofit research foundation or
corporation. While public-private partnerships are generally viewed as an effective mechanism
for advancing the state of science and facilitating the transfer and commercialization of
technologies to the marketplace, some say it is less clear whether agency-related nonprofit
research foundations and corporations represent an effective model for the formation and
management of such partnerships. Federal science agencies already have the authority to create
partnerships, and many have the authority to accept gifts from individuals, nonprofits, and private
sector firms in support of federal R&D and other agency activities. Federal agencies, however,
are not permitted to solicit private funds, and many argue that the “red tape” associated with the
establishment of public-private partnerships by federal agencies is a deterrent.
This situation may cause some observers to raise the question—would a federal agency have
achieved similar results in the absence of its agency-related nonprofit research foundation or
corporation? While this question cannot be answered with any certainty, it does offer an
opportunity for consideration of potential policy options. Among the options that Congress might
consider are:
 crafting a broad, general nonprofit research foundation authority that federal
science agencies could draw on to create an entity that meets their specific needs;
 examining the existing authorities of individual federal science agencies and, as
appropriate, supplementing those authorities to increase the flexibility of an
agency to enter into public-private partnerships;
 creating additional agency-related nonprofit research foundations on a case-by-
case basis, tailored to the specific needs of particular federal science agencies;
and
 maintaining the status quo, i.e., allowing agency-related nonprofit research
foundations and corporations that currently exist to continue, and requiring other
federal agencies to use their existing authorities to enter into public-private R&D
partnerships and transfer federal technologies to the marketplace.
If Congress decides to create additional agency-related nonprofit research foundations, clear
articulation of purpose, role, and governance structure may be needed to maintain an appropriate
balance between the flexibility associated with being a nongovernmental entity and the need for
accountability, transparency, and public confidence in the results of R&D partnerships and other
supported activities.
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Appendix. Federally Initiated and Funded Venture
Capital Firms
Over the last two decades, federal agencies and Congress have established several venture capital
(VC) firms. The intent of these firms, including In-Q-Tel (IQT), the Army Venture Capital
Initiative (AVCI), and Red Planet Capital (RPC), has been to help ensure agency access to
leading-edge technologies and input into technology development to address mission needs.
Several factors have contributed to the initiation of these organizations: a long-term shift in the
composition of U.S. research and development funding from the federal government to the
private sector; the substantial role of small start-ups in driving innovation, especially in
information technology; and expanded U.S. and global commercial market opportunities that
have diminished the relative attractiveness of serving the federal government market.
In-Q-Tel. The Central Intelligence Agency (CIA), with congressional approval, established the
first federal government-sponsored VC firm, In-Q-Tel, in 1999.131 IQT is an independent, not-for-
profit, non-stock company. It is a strategic investor that works closely with intelligence
community (IC) entities and the Department of Defense (DOD). IQT’s portfolio includes data
analytics, cybersecurity, artificial intelligence, machine learning, ubiquitous computing,
information technology solutions, communications, novel materials, electronics, commercial
space, remote sensing, power and energy, and biotechnology.132 While the CIA has broad statutory
authority in how it may expend its funds,133 according to a RAND Corporation report, the agency
reportedly used an approach based on DOD’s “other transaction” authority (10 U.S.C. 2371) for
developing its contract with IQT.134
IQT has a management team and a board of trustees. The CIA is the executive agent for IQT.135
Federal agencies, primarily the CIA, provide funding to IQT, which in turn provides investments
to selected firms based on needs articulated by the CIA. The In-Q-Tel Interface Center (QIC), a
small group of CIA employees, serves as a liaison between the CIA and IQT.
IQT investments generally range from $500,000 to $3 million. IQT asserts that for each dollar it
has invested, private investors have provided $16. IQT pairs its investment with a development

131 For additional information, see Business Executives for National Security, The Report of the Independent Panel on
the Central Intelligence Agency In-Q-Tel Venture, June 2001.
132 In-Q-Tel, “Insights and Access,” https://www.iqt.org/insights-access/.
133 Under 50 U.S.C. §3510, the CIA has the authority to expend appropriated funds for purposes necessary to carry out
its functions, “notwithstanding any other provisions of law.”
134 Tim Webb, Christopher Guo, and Jennifer Lamping Lewis, et al., RAND Corporation, Venture Capital and
Strategic Investment for Developing Government Mission Capabilities, prepared for the Office of the Secretary of
Defense, 2014, p. 27. Under certain circumstances, DOD can enter into another transaction (OT) agreement instead of a
traditional contract. OT agreements are generally exempt from federal procurement laws and regulations. These
exemptions grant government officials the flexibility to include, amend, or exclude contract clauses and requirements
that are mandatory in traditional procurements (e.g., termination clauses, cost accounting standards, payments, audit
requirements, intellectual property, and contract disputes). OT authorities also grant more flexibility to structure
agreements in numerous ways, including joint ventures; partnerships; consortia; or multiple agencies joining together to
fund an agreement encompassing multiple providers. For more information see, CRS Report R45521, Department of
Defense Use of Other Transaction Authority: Background, Analysis, and Issues for Congress, by Heidi M. Peters.
135 The White House, Office of the Director of National Intelligence, U.S. National Intelligence: An Overview, 2013,
April 9, 2013, https://www.dni.gov/files/documents/USNI%202013%20Overview_web.pdf. According to the
Government Accountability Office, an executive agent is a management arrangement where the head of a component is
designated specific roles and responsibilities to accomplish objectives when more than one component is involved.
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agreement in which IQT and the company work together to adapt the technology to meet IC
needs. If successful, IC customers can buy the product directly from the company.136 IQT asserts
that its model delivers rapid, cost-effective solutions:
IQT identifies and adapts “ready-soon” technologies—off-the-shelf products that can be
modified, tested, and delivered for use within 6 to 36 months depending on the difficulty
of the problem. Approximately 75% of our deals involve multiple agencies from the [IC]
and defense communities, which means a more cost efficient use of taxpayers’ dollars.137
Profits from the liquidation of an IQT investment are allocated between additional IQT investing
activity and other strategic information technology initiatives defined by the CIA, in accordance
with a memorandum of understanding between the CIA and IQT.138
Army Venture Capital Initiative. In January 2002, Congress directed the Secretary of the Army
to establish a venture capital investment corporation using $25 million previously appropriated to
the Army for basic and applied research.139 The Army and Arsenal Venture Capital (formerly
Military Commercial Technologies, Inc. (MILCOM)) jointly manage the AVCI through OnPoint
Technologies, LLC (OPT), a not-for-profit corporation.140 In this relationship, the Army serves as
strategic investor; provides guidance on technology priorities to OPT through its
Communications Electronics Command (CECOM); and, through CECOM, provides
administrative and contractual support to OPT. Army funds provided to OPT support investments
and OPT expenses. Proceeds from the liquidation of investments are used in part to pay
compensation to Arsenal Venture Capital with the balance used for new investments.141 In
addition to providing $25 million in FY2002, Congress appropriated $12.6 million in FY2003
and $14.3 million in FY2005 for the AVCI. In addition, in FY2004, the Army reprogrammed $10
million for the AVCI.142 Since FY2005, Congress has not appropriated funds to the AVCI.
AVCI invests alongside other VC firms at all stages of development, making investments of
$500,000 to $2 million. AVCI asserts that for each dollar it has invested, private investors have
provided $22.143 Focused initially on innovative power and energy technologies, AVCI’s
technology focus areas have expanded to include emerging technologies such as autonomy, cyber,

136 In-Q-Tel, “How We Work—Startups,” https://www.iqt.org/how-we-work/startups/.
137 In-Q-Tel, “How We Work—National Security,” https://www.iqt.org/how-we-work/national-security/.
138 Tim Webb, Christopher Guo, and Jennifer Lamping Lewis, et al., RAND Corporation, Venture Capital and
Strategic Investment for Developing Government Mission Capabilities, prepared for the Office of the Secretary of
Defense, 2014, p. 28.
139 Section 8150 of the Department of Defense and Emergency Supplemental Appropriations for Recovery from and
Response to Terrorist Attacks on the United States Act, 2002 (P.L. 107-117). Funding was to be derived by making pro
rata reductions from FY2002 Army RDT&E funds for basic and applied research, except for amounts for research
projects designated as congressional special interest items and Army RDT&E related to the Future Combat System.
140 Dr. John A. Parmentola and Dr. Robert S. Rohde, “Army Venture Capital Initiative,” Army AL&T Magazine,
November-December 2003, pp. 28-29, 43, https://asc.army.mil/docs/pubs/alt/2003/6_NovDec/articles/
28_Army_Venture_Capital_Initiative_200306.pdf; and Tim Webb, Christopher Guo, and Jennifer Lamping Lewis, et
al., RAND Corporation, Venture Capital and Strategic Investment for Developing Government Mission Capabilities,
prepared for the Office of the Secretary of Defense, 2014, p. 17.
141 Tim Webb, Christopher Guo, and Jennifer Lamping Lewis, et al., RAND Corporation, Venture Capital and
Strategic Investment for Developing Government Mission Capabilities, prepared for the Office of the Secretary of
Defense, 2014, p. 24.
142 Army, DOD Investment Budget Search, “End Item Industrial Preparedness Activities,” PE 0708045A, FY2004,
FY2005, FY2006, FY2007.
143 Army Venture Capital Corporation, “Army Venture Capital Corporation,” https://armyvci.org/.
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health information systems, and advanced materials.144 AVCI seeks to foster the development of
these technologies and their transfer to the soldier while attaining net returns for the investing
organizations from commercial and defense markets.145 AVCI asserts that it is able to engage
technology firms outside the traditional reach of DOD.
Red Planet Capital. In September 2006, the National Aeronautics and Space Administration
(NASA) announced a partnership with Red Planet Capital, Inc., a non-profit organization, to
establish a venture capital fund, Red Planet Capital (RPC). The fund was “to support innovative,
dual-use technologies [to] help NASA achieve its mission, [and] better position these
technologies for future commercial use.”146
NASA was to provide strategic direction and technical input to RPC, while the organization’s
principals were to identify investment opportunities, perform due diligence, and manage its equity
investments. NASA intended to invest approximately $75 million over five years. Congress
provided $6 million for RPC in FY2007. In FY2008, President George W. Bush proposed
termination of the program:
Government-sponsored venture capital funds provide a mechanism for Government
agencies to indirectly take equity stakes in private firms, which potentially creates
significant conflicts of interest and market distortions. The Administration believes that
this mechanism poses difficult challenges to Government oversight and should only be
used in exceptional situations…. The Administration further evaluated the fund and
determined that, for NASA, these funds are better directed towards current priorities that
will produce cost-effective, ascertainable outcomes.147
Congress provided no further appropriations for RPC. According to NASA, the fund was
eliminated before it took an equity stake in any company.148 A RAND Corporation study states
that RPC made a single investment prior to its termination, though it did not specify the
amount.149

Author Information

Marcy E. Gallo
John F. Sargent Jr.
Analyst in Science and Technology Policy
Specialist in Science and Technology Policy

Henry B. Hogue

Specialist in American National Government

144 Army Venture Capital Corporation, “Investment Focus,” https://armyvci.org/.
145 John A. Parmentola and Robert S. Rohde, “Army Venture Capital Initiative,” Army AL&T (a publication of the
Assistant Secretary of the Army for Acquisition, Logistics and Technology), November-December 2003, pp. 28-29, 43.
146 NASA, Request for Information – Venture Capital Project, Solicitation Number: NNH0622806L, February 6, 2006,
http://www.spaceref.com/news/viewsr.html?pid=19532.
147 Office of Management and Budget, Major Savings and Reforms in the President’s 2008 Budget, Budget of the
United States Government, Fiscal Year 2008, p. 73, February 2007.
148 Email correspondence between NASA and CRS, October 21, 2016.
149 Tim Webb, Christopher Guo, and Jennifer Lamping Lewis, et al., RAND Corporation, Venture Capital and
Strategic Investment for Developing Government Mission Capabilities, prepared for the Office of the Secretary of
Defense, 2014, p. 18.
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