59% indirect research costs for administrative overhead seems high. Could it be that these charges against grants are used to fund students in other subject areas where grants are not available?
It's nominally to fund general facilities, etc. At least at public universities, it does wind up indirectly supporting departments that get less grant money or (more commonly) just general overhead/funds. However, it's not explicitly for that. It's just that universities take at least half of any grant you get. There's a reason large research programs are pushed for at both private and public universities. They do bring in a lot of cash that can go to a lot of things.
This also factors a lot into postdocs vs grad students. In addition to the ~50% that the university takes, you then need to pay your grad student's tuition out of the grant. At some universities, that will be the full, out-of-state/unsupported rate. At others, it will be the minimum in-state rate. Then you also pay a grad student's (meager) salary out of the grant. However, for a post-doc, you only pay their (less meager, but still not great) salary. So you get a lot more bang for your buck out of post-docs than grad students, for better or worse. This has led to ~10 years of post-doc positions being pretty typical post PhD in a lot of fields.
With all that said, I know it sounds "greedy", but universities really do provide a lot that it's reasonable to take large portions of grants for. ~50% has always seemed high to me, but I do feel that the institution and facilities really provide value. E.g. things like "oh, hey, my fancy instrument needs a chilled water supply and the university has that in-place", as well as less tangible things like "large concentration of unique skillsets". I'm not sure it justifies 50% grant overhead, but before folks get out their pitchforks, universities really do provide a lot of value for that percentage of grant money they're taking.
Even in the defense industry, a cost-plus contract with a 10% margin is a lot. And it’s a federal crime to include costs in the overhead amount that aren’t traceable to the actual project.
One clarifying point. Indirect is normally charged on top whatever the PI gets. So they don't "take out" 50% the total. They add 50% to the original grant. So if a researcher gets a $500k grant, 50% indirect would be $250k, and the total allocation is $750k.
The corporate equivalent would be a fixed price contract, which has overhead built in and far exceeds university rates.
The overhead simplifies this to a large extent in that the PI only needs to account, as a "direct" expense the cost of his team (salaries, and things not covered by the university such as compensation to human subject volunteers, etc.)
Second, modern research needs a lot of people doing non-directly research adjacent stuff. Imagine looking at all the support people on an airbase, and saying why don’t we just cut them and let the pilots fly without all this logistics baggage.
If you are Bozo University that has no grants, you also have no overhead, because everything you spend is attributable to that first grant. You spend $50 for tiny little flasks of liquid nitrogen. You buy paper at Staples.
If you are UCSF, you have 80% "overhead" because everything is centralized. Your LN2 is delivered by barge. You buy paper from International Paper, net 20, by the cubic meter. You have a central office that washes all the glassware. Your mouse experiments share veterinarians. All of this costs much, much less because of the "overhead".
if a grant is the same $1M and Bozo University gets to spend all million on the actual research at hand, but UCSF only gets 200K, how is UCSF more efficient?
Wouldn't the LN2 be traceable to the project either way as direct non-overhead cost, but UCSF efficiency makes that cost lower, achieving the same overhead ratio but either a lower grant cost or more researcher stipend?
For example, the electricity costs of the lab in which the research is run would typically be paid for by the university and would be considered overhead. It's not "administrative bloat". Most of the particularly gross administrative bloat is on the undergraduate side of things where higher tuition costs have paid for more "activities".
University 1 gets $100. $10 of it goes to admin, $90 to researcher. Researcher spends $60 on supplies and equipment. This is accounted for as 10% administrative overhead.
University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is accounted for as 60% administrative overhead.
Is this an accurate characterization of your claim?
This is not how it works; this would be 150% overhead. ($60 / $40).
Basically, if something is a shared utility (common lab maintenance, supplies that can't be metered and charged to specific projects, libraries on campus, etc.) then it's overhead.
Also included in overhead is administrative & HR expenses... and things like institutional review boards, audit and documentation and legal services needed to show compliance with grant conditions.
The reasons for high overhead are threefold:
1. Self-serving administrative bloat at universities and labs. We all agree this is bad.
2. Shared services in complex research institutions (IRBs, equipment maintenance, supplies, facilities). This is good overhead. We want more of this stuff, though we want it to be efficiently spent, too.
3. Excessive requirements and conditions on grants that require a lot of bodies to look at them. This is bad, too, but doesn't get fixed by just lopping down the overhead number.
Unfortunately, if you just take overhead allowance away suddenly, I think it's just #2 which suffers, along with a general decrease in research. Getting rid of #1 and #3 is a more nuanced process requiring us to remove the incentives for administration growth on both the federal and university side.
No, PhD students from areas where funding is not available are required to teach. The university pays them for the teaching. Considerably less than what they would have had to pay someone who teaches for a living.
I understand how grants and overhead rates work. It’s an embarrassment.
Serious accusations need serious evidence. I'm not a fan of this sowing of doubt without a solid basis to back it up. That's very much the DOGE modus operandi, and it's a lazy and dangerous form of argumentation. I'll call it out wherever I can.
You're just saying "thing bad" and expecting agreement without putting any legwork in. The onus is on the accuser, not the accused.
I do not agree with this statement. Take from that what you will.
> The onus is on the accuser, not the accused.
In criminal law I agree. When it comes to budgeting I do not. The onus is on every program to prove every year that they’re worth funding. I don’t accept the notion that just because something was funded in the past that it was wise then and that it’s wise to continue to fund.
So when someone says “this org has a 90% indirect cost rate and keeps getting funded” I do not think “they must be doing something right”. I instead think “wow they better have a frickin spectacular argument as to how that is possibly justifiable, and I’d bet $3.50 they don’t”.
Find something real to criticize and do it with actual facts.
Take the army for example, it's estimated 30~40% of the workforce is dedicated to logistics. This is equivalent to 42~66% overhead (in the same sense that overhead is discussed in the context of academia, as +% cost) if you were to count only combat personnel as the direct costs.
This is was universities do, they only count research expenses as the direct costs. Yet it's quite obvious a university can't run just on scientists.
This 59% overhead is equivalent to 37% of the expenses. So, unlike you, I'm positively surprised that 63% of expenses go directly to the core mission with only 37% "waste" (which is necessary to ensure the scientists can actually work, and work efficiently).