The Marine Biological Laboratory in Woods Hole, Mass., has long been known for its prodigious output of basic science research on marine animals. For 125 years the MBL has been on a relatively short list of independent labs without a university affiliation. Researchers at these institutes can focus more on discovery than on teaching or other duties, and the institutes themselves are often very specialized, thereby leading to outsize contributions to science.

The independence of the MBL and other labs is quickly eroding. Most of the MBL's operating budget comes from merit-based federal grants, but that could soon change. In June the lab tapped a new funding stream by allying itself with the deep-pocketed University of Chicago. The MBL will retain its own identity, but it remains to be seen how the university's priorities will mesh with the lab's traditional focus and strengths.

The MBL's struggles stem from financial woes at the National Institutes of Health. In the past decade the budget for the country's primary scientific funding arm has stagnated and even declined. Acceptance rates for grant applications have dropped precipitously as a result. More acutely, this year's federal budget sequestration is cutting more than $1.5 billion and about 700 new research grants from the nih. Small, freestanding labs in particular are feeling the crunch.

The Boston Biomedical Research Institute shut down last year after a sharp drop in nih funding. Fox Chase Cancer Center in Philadelphia, primarily financed by patient care revenue and research grants, was bought by Temple University.

Such deals run the risk of spoiling the freewheeling, innovative culture of the small labs, some critics say. “It is a challenge to merge the independent research institute with a university system in a way that preserves a creative atmosphere,” says Greg Patterson, president of the Association of Independent Research Institutes.