What Does Privately Funded Mean?

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When individuals, businesses or organizations show support of a project with money, these projects are considered privately funded projects. Privately funded refers to the source of the money for the project, business or endeavor. If the money is raised through donations, the money comes from the private sector or funds. If the government provides financial support for a specific project, the money comes from taxpayer contributions or public funds.

Election Campaigns

Campaign finance reform has brought to light the difference between private and public funding. Money contributed by donors comes from private sources. Public money refers to currency provided by the state or federal government at the expense of taxpayers. Many voters do not believe that taxpayer money should be used to assist a candidate in gaining political office, particularly if that candidate has a platform that is contrary to the voter's platform. Privately funded campaigns can drastically change the outcome of an election when the well-known candidate can raise more money to advertise his campaign. A lesser-known candidate may not be able to compete at the same level.

Social Programs

Private funding for social programs is another hot topic. Organizations like Planned Parenthood for example, function under a combined funding program. They receive donations from those interested in their cause -- which is private funding -- as well as public funds from the government. This creates difficulties among taxpayers who do not want their tax dollars going to a cause they may not support. Some privately funded social programs receive no federal or state support. These organizations, such as a church charity, typically advertise this fact heavily and rely solely on donations from their supporters.

Private Business Sector

The business sector commonly engages in privately funded projects through investor groups, angel investors or by venture capitalists. An investor such as Warren Buffett may have enough funds to launch a company with other funding coming from various investor groups. An example of this would be Buffett's privately funded International Atomic Energy Agency Nuclear Fuel Bank. This bank, according to Buffett, enables developing nations to create nuclear power under control of the IAEA without the concern that they would use technology to create nuclear weapons.

Other Sectors

Entertainment industry projects operate solely with private investments, either through private investor groups or even one person who provides the financial support for the project. Private funding has also enabled more space exploration, outside of NASA, which is backed by public money. Entrepreneurs including Richard Branson and Elon Musk put up their own money to finance the research, development and creation of spacecraft completely separate from government programs. Proponents suggest that private funding in this sector may help increase innovation and encourage the government to allocate more federal funding for space exploration.

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About the Author

Kate McFarlin is a licensed insurance agent with extensive experience in covering topics related to marketing, small business, personal finance and home improvement. She began her career as a Web designer and also specializes in audio/video mixing and design.

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