The NIH and NSF have two funding programs, the Small Business Innovation Research and Small Business Technology Transfer programs, that specifically fund startups/spin-outs from their research programs. More here: https://www.sbir.gov/ Some DARPA programs also have similar commercialization milestones: our PMs were pushing people to think about FDA approval and manufacturing.

Completely agreed! I didn't mean to give that impression at all. I was simply giving a specific recent example demonstrating GP's statement that "especially when said innovation is often possible only because of extensive public investment in research, supply chain stability, etc.".

There are smaller churches that would benefit from the Govt policies.

TBH though, it's not 1800. we should stop (not) taxing based on institution type and start (not) taxing based on where the dollars are going. This would solve lots of problems in the non-profit world (including IKEA and churches).

While I don't necessarily disagree, this seems like it would create a large administrative burden and a strong incentive for businesses to simply lie (or creatively disguise) where there money going. This seems easier than fraudulently registering a for-profit business as a non-profit. Although I suppose it's hard to say whether the current or your proposed approach would result in tax breaks really happening where we want them.