"Having 50% of their grant leeched off" is not how indirects work.
You know what's a much bigger problem for people doing research? That the budget for a non-modular R01 from the NIH hasn't changed since the Clinton administration.
This. I had someone try to claim once that having three undergrads in my lab meant a lot of research would be done. I had to explain that they were all net negatives - worthwhile ones, but not productive.
Since a lot of people on HN don't know how indirect costs work, especially for the NIH:
Grant proposals don't cover things that don't directly cover the project. Journal subscriptions, facilities, copy paper, administrative staff, etc. all aren't eligible, and so get rolled into the vague notion of indirect rates.
When an NIH grant is awarded for a particular direct cost amount, the indirect rate is then added on. So for my institution, if I get a $100,000 grant, my institution gets $153,000, because we have a 53% indirect rate. These are periodically renegotiated with the Federal government, and used widely.
Private research companies can and do just tuck this into their costs, but universities aren't allowed to do that.
A 15% rate is, to be blunt, catastrophic. It's "Every University in the U.S. Loses Money on Every Single NIH Grant" levels of bad.
And yes, this is the rate a lot of foundations charge. That's not because it's a reasonable rate - it's because it's a charitable foundation, and we all sort of indulge them because of their missions, and their own need to be efficient. But they're also a minuscule amount of the funding landscape, and often small grants. We tell ourselves its find - they're worthy causes, and loss leaders, etc. But applying that to the NIH will be a massive blow to biomedical research in the United States.
Your comments are quite good and accurate. I would add that funding from private foundations is in many cases only viable because NIH overhead is paying for the supporting infrastructure. Very few biomedical researchers are supported solely by private funding (including the building and lab facilities).
These changes also directly impact research hospitals, not just universities.
That doesn't mean indirect costs shouldn't be reformed. This is just simply the most disruptive possible way to do it.
Yep. I worked in a biomedical research department. Getting funding was always difficult, requiring 2 full-time grant writers for the government stuff and the dept chair who split their time between raising from private individuals, corporations, and all other sources. Government has strict rules about what money can and can't be spent on. Take equipment given by the government: often times, it would gather dust and couldn't be disposed of, despite being obsolete and replaced by something else, because of government red tape. Getting grants is very competitive and there's rarely enough money to cover all of the ordinary functions like salaries of an admin person, office supplies, or other overhead things needed for students, faculty, and staff to operate a functional department.
The losers of this will be patients of the entire world, the slow down of advancements in medicine and STEM fields of all kinds, and the sucking sound of brains leaving for other countries.
Yeah, this will hit research hospitals, organizations like RTI, etc.
And yeah, the rates private foundations pay is enabled by the NIH rates, and also that the NIH makes up the bulk of the funding in the first place. There's an argument - that I'm sympathetic to - that they shouldn't get a discount and the rate is the rate, but that's a very different reform than what we're seeing now.
When I was an academic, I did all my work in the cloud. I didn't use copy paper, or even really need to be in the office (it had slower networking, and less comfortable chairs). The university had a multi-billion dollar endowment and got billions from the state to run its educational mission. Why should I be raising 50% on top of my money (which was so high, NIH often wanted to give money to people at "cheaper" universities).
It's very unclear to me how you seem to expect medical research to be done in the cloud. Overhead is crucial to create and maintain research infrastructure necessary to advance medicine and science.
I work in pharma and we do tons of medical research in the cloud and it was done before in academia; it typically wasn't my own university that developed (on its own from direct funding) the necessary infrastructure, but universities under contract, or NIH itself, or a consortia funded through grants. The university IT department itself struggled with just keeping wifi up, or giving us 10BT networks on a hub in an age when gigabit switches were common.
Note: I was not typical. I set up as a digital nomad a long time ago. A scientist with a lab on campus who pulls power, AC, and other resources from central services, must have some way of compensating the university, and you could argue that instead of a prenegotiated (and amortized) overhead, it could instead be a cost center billing (scientist gets contract, uses campus resources, gets billed directly for their consumption). Don't forget also that because of Bayh Dole, the university gets monetize the IP generated by their scientists (who typically do not see any direct revenue; instead, they have to make a startup that licenses the tech from the university).
My experience with overheads showed that the universities I worked at had the highest (50-75%) while less prestigious regional universities were more like 30%.
Oh! This is new: I just looked up Berkeley's rates now and they explicitly have an off-campus rate that is 25%, while the on-campus is 60%. Apparently the federal government was already capping off-campus at 25%! I also see that funding agencies like Gates, Chan-Zuckerberg, etc, already cap at around 10-15%. Man, the deans must be furious
The rules for off campus rates are pretty strict, and not just “I’m not in my office.” They get used for Extension, stuff like that.
Ironically, prohibiting “breaks” to Gates, Chan-Zuckerberg, etc. and saying the rate they get is the same as your NIH rate would probably go over well. Most people I know in research admin are perpetually annoyed that private foundations act like being subsidized is their right.
> I just looked up Berkeley's rates now and they explicitly have an off-campus rate that is 25%, while the on-campus is 60%. Apparently the federal government was already capping off-campus at 25%!
Off-campus is capped because the grant is then paying for rent on the lab space from the private landlord. Universities don't charge research labs for power, cooling, rent, janitorial, Internet, etc. Maybe they will start now.
A 50% indirect rate both isn't particularly high. The idea that "You're raising" an extra 50% isn't really fair either - the effort into writing a grant is the same regardless of the indirect rate.
There are arguments to be made that university budgets are too high (I don't agree, but they exist). So renegotiate indirect rates. There's a framework for doing this.
An across the board, utterly devoid of context arbitrary cut to 15% isn't a sane policy.
Your institution might have a large endowment. Mine is a rural state school.
It is made up: nobody sat down and did the analysis to see whether the existing levels are reasonable or how best to restructure things, they’re trying to cut even pre-approved funding to an arbitrary number.
Some private foundations do charge less, but they’re usually not providing the bulk of the funding for a given lab. There are generations of researchers and American industries based on the model where NIH/NSF provide a stable foundation for research, and while that can change it’s incredibly disruptive to try to break existing agreements.
To put it in HN terms, do you know anyone who take lower paying non-profit work because they’re married to someone with a tech job which means they never worry about their mortgage or health insurance? This is like that spouse’s employer saying they’re getting a 30% pay cut.
Yes, but private foundations are only paying for the incremental cost of their funding, not the base cost. If you are flying a plane from LA to Chicago, the incremental cost of flying that plane on to Detroit is pretty low; a low overhead on the direct costs of that additional leg makes some sense. The private foundations are like the additional leg, they aren't paying for the fixed costs of running the airline.
When looking at the whole system it clearly becomes woefully inadeqate. To extend the example, the only direct costs of an airplane flight are the crew, the fuel/food, and any airport fees. Could you run the rest of an airline (training, ground staff, scheduling, booking, IT, maintenance) on 15% of the crew+fuel costs? Not even close.
If you look at federal contractors and other companies, the overhead on staff is probably closer to 100-200%, so 50-60% is very defensible.
I wrote my college admissions essay, back in the day, on the virtues of being mediocre at a particular sport, and I'm like, 85% sure that's how I got in.
I wrote a paper on alternatives to full school closure in 2008.
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