How to fund scholarship morally?

Reading a work of economic history written in the ‘60s, I was pleased to find this quaint story of how the author secured funding for the project:

This book grew out of a chance meeting with the late Dr Marcellus Kik at the Institute of Medieval Canon Law, Washington, D.C., in February 1964. Dr Kik had come to the Institute in the hope of finding some refence work dealing with the economic legislation of the medieval Church. Our joint search had no success, and this prompted Dr Kik to suggest that I might write such a work. … For this scheme Dr Kik secured the generous financial support of J. Howard Pew of Philadelphia.
(J. Gilchrist, The Church and Economic Activity in the Middle Ages (1969), vii)

Who was J. Howard Pew?

John Howard Pew (1882–1971) was an American philanthropist and president of Sunoco (Sun Oil Company). With his siblings, Pew was a co-founder of The Pew Charitable Trusts. J. Howard Pew also donated the funds for the J. Howard Pew Freedom Trust in 1957. Pew provided early funding to support Gordon-Conwell Theological Seminary in Massachusetts, working closely with Billy Graham and Harold Ockenga. Pew also donated to various other organizations, including the Foundation for Economic Education, American Liberty League and Barry Goldwater presidential campaign, 1964.
(Wikipedia: https://en.wikipedia.org/wiki/J._Howard_Pew)

Consider the great moral difference between securing funding for research in this fashion and getting it through SSHRC.

Here, an individual has freely chosen to give of his wealth to advance learning, and has given it to this project because, presumably, he thinks it is worth doing.

There, a committee is given authority to dispose of other men’s wealth, which has been coercively taken from them through taxation, and the committee has selected one thousand or so carefully tailored and frequently dishonest research proposals to which to assign this money.

Here, scholarship is connected to demand—this work can get done because someone thinks it worth enough to pay for it with his own money.

There, scholarship has no connection to demand—the work can get done because the government allocates X million dollars to ‘humanities funding’ and the SSHRC committee has to assign it somewhere.

Nobody spends his own money on the thing, and for many or most of these projects, nobody ever would.

Whatever we think about the value of scholarship, there is a great moral gulf between the two methods. And that moral difference, the difference in character of getting funding the one way versus getting it in the other, has to have an effect on the profession itself. For one, scholars are totally dependent on the government.

But above all a profession whose existence depends in no way on demand (in the sense of individuals choosing to pay for the product with their own money) must be prone to a sense of superiority and contempt for the masses. And the moreso, the more the masses resent having their money taken from them and given to scholars. Is there any question that this is endemic in academia?

The objects of scholars’ scorn are the very people to whom they ought to be grateful.