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Comment by derbOac | Hacker News Reader

As someone who was formerly a tenured professor, and left in part because of the issues in this piece, I agree.

> The universities may have gotten “addicted” to the influx of federal funds, and adapted their operations based around absorbing more federal money.

This is an understatement. It's not "may have"; one can eliminate the "may". At many universities currently the tail wags the dog. There have been many high-profile examples of this in recent years. It used to not be this way, and the time period identified in the piece has been highlighted by many papers on the topic.

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Yes, this seems like a big problem. Need to reform the NIH and crack down on the universities.

>On the other hand, there is definitely evidence that university administrators are motivated by indirect cost rates. In the most severe cases, some universities levy a “tax” on researchers for obtaining grants from non-NIH sources. In the case of Columbia University, the tax is equal to the NIH indirect cost rate minus the other institution’s indirect cost rate. That percentage is taken out of the researcher’s direct costs. This policy dramatically diminishes the value of non-NIH grants.

>For example, if a Columbia University (62.5% NIH indirect cost rate) researcher receives a grant from the Bill and Melinda Gates Foundation (10% indirect rate), with a direct cost of $1 million and a total value of $1.1 million, a whopping $525,000 intended for the researcher is redirected to the university, bringing the direct cost benefits to the researcher down from $1 million to $475,000. And frankly, that’s underselling the transfer, because non-profit grants tend to be much smaller than NIH grants; once the tax is paid, the remaining money might not even be worth applying for.

The question of whether 62.5% indirect cost rate is appropriate is a good one, but 10% is certainly not enough. Indirect costs include many things that are required in order to perform research, including real estate, power, building maintenance, administrative staff for payroll, financial management, regulatory reporting, technology, infrastructure, safety, etc. etc.

What else is a university to do if non-profits try to free-ride on the infrastructure paid for by NIH?

just for those less familiar, it may be useful to note that the shift towards federal funds is typically linked to decreases in local funding for higher education.

It isn't 'organic' there has been an outside forcing function.

The shift to dependency on federal funding happened during and after the second world war. The federal government discovered they could speed up research by pouring money into universities, but never accounted for how this would change incentive structures, and eventually warp the universities.

That's true although in my discussions with university administration, there is a causal arrow that points a bit in the other direction too. I've had conversations with university presidents and other administration (in semi-private contexts) where it's basically stated "we don't need to advocate for state funding because we can sustain ourselves on federal funds."

I note this not to criticize the administration (although you can do that), but to point out that this dynamic has repercussions in terms of incentives. If you're a university president or provost and getting pressure from a conservative legislature to not depend on public funding (which really means "state funding" to them, but that's another discussion), and all of a sudden the federal government becomes this cash flow source, you're going to run to it, and leverage that as "being a good citizen" with the legislature. I think the causal directions go in both ways and have these kind of amplifying effects.

I have heard the same...but I honestly think that is a 'here lets not try' more so than a 'we wouldn't make use of it'.

Totally agree with you on the rest.

What is interesting is the admins now finding that those same legislators won't leave you alone even if they strip all your funding. They will mess with you for cheap points and sport.

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