The Wisconsin Alumni Research Foundation is a significant source of research support, independent of government grants. It currently contributes about $30 million per year, giving the university's research programs a "margin of excellence."

WARF was founded in 1925 by Harry Steenbock, who invented process for using ultraviolet radiation to add vitamin D to milk and other foods. Rather than leaving the invention unpatented—then the standard practice for university inventions—he patented it, worked with Quaker Oats and pharmaceutical companies to commercialize it, and used the proceeds to fund research.

Since its founding, WARF has served the University of Wisconsin-Madison scientific community by patenting the discoveries of UW-Madison researchers and licensing these technologies to leading companies in Wisconsin, the United States and worldwide. In this way, WARF also facilitates the use of UW-Madison research for the maximum benefit of society. WARF distributes the income from commercial licenses to the UW-Madison, the inventors and their departments. Each year, WARF contributes over $45 million to fund additional UW-Madison research. The university refers to WARF's annual gifts as its "margin of excellence" funding.

Warfarin (Coumadin) is named for WARF, and the story of its discovery is emblematic of the "Wisconsin idea" and the relationship of the university to the Wisconsin public. In 1933 a farmer from Deer Park showed up unannounced at the School of Agriculture and walked into a professor's laboratory with a milk can full of blood which would not coagulate. In his truck, he had also brought a dead heifer and some spoiled clover hay. He wanted to know what had killed his cow. In 1941, Karl Paul Link successfully isolated the anticoagulant factor, which found commercial application as a rodent-killer and is used in medicine for treating circulatory conditions.