Alternative Funding Tools and Models for Science

As the science funding landscape shifts, alternative methods of funding science are emerging as crucial options for early-stage ventures. This is especially true in biotech, where founders often rely on federal funding and venture capital to bridge R&D and commercialization.

Earlier this month, Juniper hosted a panel on how Donor-Advised Funds (DAFs) can be used to invest in for-profit ventures (recording here!) The conversation attracted hundreds of founders, investors, and mission-driven donors who are eager to understand how philanthropic giving can play a more catalytic role in the deep tech venture ecosystem.

But DAFs are just the tip of the iceberg. There’s a rich landscape of alternative funding models that can help diversify a startup’s capital stack, reduce dilution, and align funding with mission-driven impact.

Here are some of the alternative funding models, tools, and infrastructure we’re exploring:

Donor-Advised Funds (DAFs)

DAFs have long been a vehicle for charitable giving, allowing donors to receive immediate tax benefits when they contribute money to funds designated for future philanthropic use. However, it’s a lesser-known fact that DAF capital can also be invested into for-profit, mission-driven technologies and even the venture funds that back them.

Examples of organizations and intermediaries facilitating DAF investing include:

• Neta

• CapShift

• Mission Investors Exchange

• Fidelity Charitable

Program-Related Investments (PRIs) & Mission-Related Investments (MRIs)

PRIs and MRIs allow philanthropic organizations to support commercially viable solutions while advancing their missions. MRIs are financial investments made from a foundation’s endowment that aim to generate both social impact and financial return, but they are not considered charitable activities and must meet standard prudent investment rules. In contrast, PRIs are treated like charitable grants that must primarily further the foundation’s exempt purposes, with profit not being a significant motive, and they receive special tax treatment.

Examples of active PRI/MRI funders and intermediaries:

• The Rockefeller Foundation

• The David and Lucile Packard Foundation

• Prime Coalition

Recoverable Grants

Recoverable grants are philanthropic funds that are repaid only if certain milestones are met, such as raising additional capital or generating revenue. They’re designed to recycle capital for further impact while offering early ventures flexible support.

Organizations using this model:

• CapShift

• ReFED Catalytic Grant Fund

• BioInnovation Institute

• Activate

Thesis-Driven Philanthropic Funds

Thesis-driven philanthropic funds are an emerging model of funding that applies a venture-style approach to philanthropy. Led by domain experts and focused on specific, time-bound missions, these funds pool capital from philanthropists to back high-risk, high-impact science that’s often too early for institutional or commercial investors.

Examples include:

• Homeworld Collective Garden Grants

• Sentinel Bio

• EQT Foundation Breakthrough Science Grants

• Founders Pledge

Traditional Grants from Private Foundations

Philanthropic and private foundations are increasingly funding early-stage deep tech innovation through non-dilutive, traditional grants. These funds don’t need to be repaid and often target work that’s too early for venture capital.

Active funders include:

• Grantham Foundation

• Schmidt Family Futures

• Breakthrough Energy

• Lemelson Foundation

Fiscal Sponsorship

Under a fiscal sponsorship arrangement, a 501(c)(3) non-profit can sponsor a for-profit startup whose mission aligns with its own, allowing the startup to receive tax-exempt donations via the sponsor. While this doesn’t guarantee funding, it opens doors for philanthropic contributions that may otherwise be off-limits.

Specialized fiscal sponsors include:

• Fiscal Sponsorship Allies

• New Venture Fund

• Tides Center

• Inspire Access

Strategic Capital

Not long ago, corporate partnerships were viewed with skepticism in the early stages of company-building. Today, the narrative has flipped. Corporate venture arms, innovation programs, and industry foundations are providing strategic capital that combines funding with market insight and commercialization pathways.

Active strategics in bioindustrials include:

L’Oréal, Johnson & Johnson, Microsoft, ADM, Shell, Chevron, H&M, Lululemon, Cisco, Amazon, BASF, and Toyota.

Decentralized Autonomous Organizations (DAOs)

DAOs represent a new frontier: community-governed, blockchain-native capital pools that allocate funding through transparent, democratic voting processes. They move fast, often with fewer constraints than traditional grant mechanisms.

Juniper’s portfolio company, ValleyDAO, is a DAO focused specifically on climate biotech. Other examples in deep tech include Molecule and VitaDAO.

Did we miss a model you’re excited about? Tell us in this short survey! We’re planning another panel on alternative funding in science, and we might feature your idea in our next expert-led discussion.