About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Traditional peer-reviewed funding of research is broken

If you’ve ever applied for funding to make your idea happen, or sat on a panel that has to make decisions on this topic, you know that funding is a nightmare of unconscious biases, popularity contests, conservative decision-making and trying to slide a cigarette paper between two applications that are equally as good but you can only fund one. In 2019 we predicted that more organisations would begin to experiment with random allocation of research funding to help tackle these problems. This year we put our money where our mouth is and allocated funding for our Explorations Initiatives by lottery.

What are the benefits of randomised funding?

Not all funding is suited to this approach, but there are some tangible benefits:

  • It can save time. Applying for research funding through conventional means is really time-consuming - which means that researchers waste years bidding for funding they might never get (four centuries in the case of Australian medical researchers!).
  • It can reduce bias and improve diversity. The current way that research is funded is at risk of bias. For example, African American scientists are less likely to succeed in their funding applications to the US National Institutes of Health than their white counterparts.
  • It can give space for more unconventional ideas. The current model for research funding can actually mark down novel ideas. This might also mean people don’t bother proposing novel ideas for fear they will be rejected out of hand.

Who has tried this approach?

Randomised funding is more widespread than you might at first think. The New Zealand Health Research Council randomly distributed some of its Explorer Grants that are meant to support more adventurous ideas. InnovateUK used a lottery to distribute vouchers to help pay for expert advice, subject to checks on scope and eligibility. In a similar way, Nigeria ran a successful programme of randomised grants for entrepreneurs. And the Volkswagen Foundation partially randomised funding of their 'Experiment!' grants that were created to find audacious new research.

Randomised funding is not without controversy

Why not randomise? Innovators could take a “scattergun” approach hoping to secure funding by chance. From time to time funders might want to funnel money toward particular areas of strategic importance such as epidemics or inequality. There might also be caution in distributing support for big ticket items like giant particle accelerators or space telescopes on the roll of the dice. Researchers may see randomisation as an attempt to take decision-making away from experts. And sometimes the merits of research proposals are really easy to judge so randomisation is unnecessary.

While many of these concerns are legitimate, most can be overcome with good design and by applying randomisation to the right sort of research such as small, exploratory awards for early career researchers in emerging fields.

Explorations Initiatives tick many of these boxes making it a good place to start trying out randomised funding.

Find out what we learnt from conducting and evaluating the programme

Key takeaways