Comment by gchallen | Hacker News Reader

Comment by gchallen | Hacker News Reader

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One of the biggest problems with overheads is that administrators are frequently simply unable to explain or justify them.

The vast majority of research-active universities in the US are non-profit, and so it doesn't really make sense to say that the universities is "profiting" off of overheads. Overheads are also negotiated with each funding agency, and my understanding is that the university has to prepare a fairly detailed case to support their particular number. They can't just make something up.

But overhead rates can vary fairly significantly between similar institutions. And when, as a faculty member, you start asking questions about why, you're frequently met with defensiveness, nonsense, or both. When I worked in the Northeast, I remember someone claiming that our overheads were 10+% higher than another institution due to... snow removal. (Which wasn't that effective either.)

Overheads also seem to only go up. Because of course.

Provide a reasonable justification for why you're charging me a certain amount, and how the money gets spent, and we're cool. I understand the university is a complex place and there's a lot involved in supporting what I'm doing. But when you can't provide a reasonable explanation, people start to wonder why not.

> are non-profit, and it doesn't really make sense to say that the universities is "profiting" off of overheads

IMO “non-profit” is a misnomer.

It only implies that the organisation’s owners (funders, equity holders, etc) do not take a profit.

It does /not/ mean that the people involved don’t make money - income, fees, admin overhead, building/contracts/employment favoritism, etc. There are infinite ways to leech money that don’t involve taking “profits”.

It's literally what the company setup means. You can allege that people in every non-profit are committing fraud, but it's not a misnomer.

A better way to phrase the parent's frustration is to say that "non profit" is strictly a tax status.

Colloquially, we have expanded the meaning to mean a charity or other selfless endeavor.

No doubt many non profits do perform charitable acts, but plenty more are just glorified tax shelters.

I'm perplexed what the problem is here?

My partner works in grant management for a public r1. I believe the rate the university gets is about .57.

That pays for facilities and education programs and funding the department itself. Bringing in money makes the university happy and your pay check bigger though the accounting on it sounds obnoxious and not always guaranteed (salary cuts to cover overruns, etc).

However if you think about it, That's probably about how much private employees make for their employer anyways if not more. Annoying but hey that's the way the system is, you're getting paid to make someone else more money.

From the perspective of a grad student, you're getting paid $20k/year in a HCOL area, the grant is getting charged like $40k a year (somewhere around $20k of "tuition remission" charged on fake tuition that nobody actually pays), and then the government is actually paying $60k/year due to overhead. This is frustrating.

Where's that extra $40k going?

I had a small desk in a shared office and I guess used some electricity for my computer, and there was custodial staff who cleaned that building. That's about all I can think of, and I don't think it cost the university $40k/student/year.

Campus amenities were paid for by a $600 mandatory fee which came out of my paycheck separately.

It's not paying for compute -- the computing resources I used were bought separately through grant money. If it was paying administrators, then how come every time I needed to do something it had to go through the same handful of extremely overworked people?

You could see where people would start to get annoyed.

Agree, it's complete crap. Until COVID, my faculty used to charge monopoly money for grad student tuituion fees (which is to say, these costs were always waived provided the candidate had good grades and funds could be found for a living stipend). Since COVID, we now charge many tens of thousands per candidate per year. Why? grad students cost SFA in terms of additional overheads and they are the folks who do the actual "work" that brings grant ideas to fruition. Its not like (undergrad) student numbers are down vs pre-COVID times either nor is there some huge sudden influx of graduate student.

"That pays for facilities and education programs and funding the department itself."

Buildings, rooms costs rent from each department.

Departments have expenses. Salaries to pay. Equipment to upgrade. Sometimes costs go over or researchers suddenly leave for whatever reason. The department they worked in is holding the bag on that.

Literally all that .57 or whatever part of every of every dollar you bring is going to the university to do with it how they like it. You're always working to make someone else more; that's why they hired you.

Now why is it going through the same people all the time (like grant management I presume?), Because grants have limited amount of money and people that fund research like to know the money was spent the way it was supposed to and the university itself likes to know all the money its researchers are bringing in and avoid conflicts of interest.

Edit: I also forgot to include, don't forget that like part of your pay you don't directly see, it's a about a third more, which goes to your benefits.

Minor note: Tuition isn't typically included in the "base rate" for overhead calculations.

It is worse than that. You get paid 20k/y. You pay 20k/y in tuition. But only 40% of the grant money ends up going to this 40k. So it costs the funding institution $100,000 to pay you 20k.

> I'm perplexed what the problem is here?

...

> Annoying but hey that's the way the system is

Wut? First, why the self contradiction. If it is annoying then there is a problem, that point of annoyance.

And keep in mind, as also pointed out elsewhere, this is not how it is everywhere.

You might be content with the situation (which is understandable, as your wife gets her pay by it), but that does not mean there are no issues are that's how it is.

That's how it is in the bigger world outside of academia... Why would it be any different?

If you want to make the full value of your work then become your own boss. Though as others in the parent thread pointed out businesses cost about .5 or so for every dollar you make.

So it's either suck it up and accept that's how our society is structured and it happens to be an annoying aspect of it. Or we try redesigning society and discover different annoying problems/issues.

> I'm perplexed what the problem is here?

It sounds like there is a large potential for corruption and waste with such an opaque system.

Not really.

Though researchers love to buy big expensive sample fridges or other equipment when they're ending a project and need to spend anything left over in the projects funds.

Is that waste to you?

I was referring to the "overhead" portion, which it sounds like the researchers are not able to access.

So?

Either spending is wasteful or it isn't. People don't work for free and the money is accounted for.

For example the Federal government and public universities negotiate a rate at which F&A (overhead, facilities and administrations) can be at. Then the Federal government, since they're paying for it, ask for receipts. The money is being accounted for.

You've just described capitalism, for better or worse.

> Overheads also seem to only go up

Inflation says hello

Overhead is $ of overhead of $ per grant, so this isn't inflation, it's a higher proportion of grants going to admin vs research.

Significantly higher than inflation, too.

I mean, on a per grant basis, the direct costs (and thus indirects) for a non-modular NIH R01, which is probably the most common form of grant, haven't changed since the Clinton era.

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