The European Space Agency, headquartered in Paris, funds its mandatory activities by contributions based on gross national product and invests back by geographical return
Background
The European Space Agency (ESA) was created as an intergovernmental organisation in 1975. Its purpose, under Article II of its establishing Convention, is to promote for exclusively peaceful purposes cooperation among European States in space research and technology and their space applications. ESA's headquarters are in Paris, where policies and programmes are decided. Its sites include ESTEC in Noordwijk, the Netherlands, ESOC in Darmstadt, Germany, ESRIN in Frascati near Rome, Italy, the European Astronauts Centre in Cologne, Germany, and ESAC near Madrid, Spain, plus a launch base in French Guiana. Mandatory activities are funded by member contributions calculated according to each country's gross national product, while optional programmes are chosen by each member. Under geographical return, ESA invests in each member state, through industrial contracts, an amount roughly equal to that country's contribution.
In plain words
Geographical return ESA industrial policy — ESA invests in each member state, through contracts, roughly what that state contributes.
Optional programmes ESA funding — Programmes each member chooses whether to join and how much to contribute.