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Animats

They are high relative to private industry. They're supporting all those administrators that colleges have accumulated.

It's significant that U. Pitt. chose to stop admitting students rather than starting to lay off administrators.

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Administrative bloat is a concern, but these indirect costs include things like equipment, too.

If you build a good lab which has versatile equipment to address many use-cases, the indirect costs will be high.

BS they include equipment. Everything we needed was either bought by us on grant money, or was part of some collaborative grant for the whole department. E.g. and imaging lab that maybe had a SEM or two-photon, etc.

What you bought on one grant, and then is lab equipment being maintained and serviced afterwards is now "facilities" costs.

The university definitely doesn't "service" it at all. If it breaks, you call up the company and hope its under warranty, or you pay someone to fix it, again off the grant funds.

I guess it's fairies performing all those calibrations and restocking all those consumables that can't easily be charged to individual projects.

They did jack crap. Anything more complicated than a light-bulb or a toilet that broke, the lab handled it internally somehow (either getting the company to fix it or doing it ourselves).

There were a few department-wide resources. Again, ultimately funded off someone (or a bunch of people's) grants

Funded as indirect costs.

The "A" of F&A is capped at 26%.

That means any overhead over 26% went to some kind of facilities cost at your lab.

(Most private industry informal accounting would call that 26% "20% overhead").

Not really, and it's not really how things work either.

Private industry is charging/billing cost + margin for profit.

University is saying X is allocated for research, Y is allocated to keep the lights running for the facility and pay for students. The students are generally funded by research, not the University. No research money, no money for students.

I guess you need to compare universities to research institutes like Howard Hughes (HHMI). Unfortunately only academic institutions are eligible for grants from NIH/NSF, so they don't break down their costs like that.

This is incorrect: while some NIH and NSF grants require an academic institution as the prime or sole awardee there are many that are open to private organizations and others that are mandated to be specific to small businesses (SBIR).

Research funding awarded to universities and to performers internal to NASA (back when there was a reasonable amount of that) had overhead rates that were similar to the NIH rates. When I worked at Xerox PARC, we would perform research for other parts of the company and charged overhead too, although the rate was a little lower (around 40%). Institutional overhead has been a regular feature of how research has been organized and funded for 60 years. Change is fine, but most of the costs are legitimate, and it takes time for the rest of the system to adjust to changes in one part of it. Doing it abruptly is damaging the system and will negatively impact the careers of many students and young researchers.

Most non-university non-industry non-government research institutes in the US (eg. Salk Institute, J. Craig Venter Institute, Sanford Burnham Prebys) rely on their researchers applying and getting grants from the NIH and NSF just as university scientists do. And their overhead costs are generally even higher than universities because they have no other source of income other than grants (I used to be faculty at JCVI). HHMI is unusual in that it is funded by a rich person's estate and doesn't need this.

And HHMI makes lease payments, etc, on facilities for researchers at partner institutions that cover a lot of what would be incorporated in indirect costs.

They also cover expenses of people, not specific projects, so the broader grant means that there's less of a need for common overhead across projects.

If my tax dollars are supporting research, I'd rather they go to universities even if that means some bloat in the form of more people hired than otherwise, rather than corporate shareholders.

Is there a stat or place I can read more about that? I hear people throw throw the idea of administrative bloat around a lot but would be interested to see data behind that

https://www.forbes.com/sites/paulweinstein/2023/08/28/admini...

The overhead rate at every corporation I've worked for is between 70-80%.

Two S&P 100s, one 500.

Do you know that “overhead” costs are not equivalent to payouts to administrators?

> They are high relative to private industry.

Academia is not "private industry."

Private industry does not run campuses full of graduate courses and basic research that America’s technological prosperity depends on

Those overhead fees go to fund that, so universities don’t have to be even mere full of nepo baby donor legacy admissions than they already are

No, overhead doesn't pay for grad students or techs. That money comes out of the grant funding or tuition fees (if not funded off the grant)

Dude this IS the grant funding they’re slashing. The NIH (and other grantmakers) make research grants and the overhead fee from that goes to the university. This is precisely what they’ve cut

Direct costs, not indirect. Grad students and techs don't see that money, unless in rare instances for a grad student the grant funding is suddenly cut off for one reason or another (private grants or some sequester by the NIH)

You are saying words. They make little sense however. The total cost of running these institutions can be broken down however you want. If the total doesn’t add up to the necessary amount they can’t operate

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