The Alaska Science and Technology Foundation (ASTF) was established in 1988 as a public corporation and is funded by interest from its endowment. ASTF's mission is to invest in applied and basic research that enhances the state's long-term economic development and technological innovation, builds its science and engineering capabilities, and improves the health of Alaskans. ASTF awards competitive grants, but grantees repay ASTF's endowment up to one and one-half times the amount initially received through a percentage of gross revenues later realized. ASTF encourages partnership development and discourages long-term dependence on its funds.

In recent years, ASTF has awarded grants worth approximately $2.5 million annually. About 95 percent of these funds go to R&D activities in sectors such as agriculture, Arctic engineering, energy, forestry and wood products, public health and safety, mining, and software/hardware development. The remainder are awarded directly to teachers or as interim funding ("bridging grants") to recipients of federal Small Business Innovation Research (SBIR) grants. The Alaska Legislature has also appropriated more than $3.5 million annually from ASTF resources for non-grant purposes. Of these funds, $3 million have gone to the UAF Agriculture and Forestry Station in Palmer. The remainder has gone to help fund other groups such as the Alaska Aerospace Development Corporation. In addition, a total of $3 million ($1 million in FY 1995 and $2 million in FY 1996) has been set aside to establish an Alaskan Business Investment Development Company (BIDCO) to provide access to medium-risk capital for Alaskan business. Observers worry that if the legislature continues to earmark ASTF resources for non-ASTF purposes, the future effectiveness of the foundation could be threatened.