A gradual shift in United Kingdom research funding from blanket financing by government agencies towards more diversified income streams through activities funded by various customers is prompting academic research institutions to orient their research portfolios accordingly. Academic organisations such as university institutes are increasingly relying on the funding obtained through research projects paid for by other customers than national funding bodies, thus diversifying their operations. Wrong choices in this diversification process can, however, have serious financial or operational implications for the organisation. A framework is proposed that should help enable academic institutes to rationalise their decision-making processes when seeking external funding for their operations through project grants or research contracts and learn from projects.