Major observatories and research projects are primarily funded by the government. Government agencies mandated to oversee such projects and observatories are also delegated to outsource funding from private institution and industry. Government based their amount of funding to observatories on researches it is undergoing. More quality and relevant research proposed by astronomers and scientists means more funding from the government.
However, recent developments on worldwide astronomy are putting the major research on an uneven position. For example, British government pulled out its biggest share on...
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... the state-of-the-art Gemini facilities, leaving a very viable research and discoveries on astronomy and astrophysics. Also, the unpopularity of astronomy as a course and a profession on the Universities and academics put possible funding on limbo on state-run universities on the said academic program.