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Yes the source of much of the enormous endowment is Department of Defense, Department of Energy, and private donations (see the new Koch building, for example).

Yes the source of much of the enormous endowment is Department of Defense, Department of Energy, and private donations (see the new Koch building, for example). The major energy companies (e.g. Shell) are also big donors to the climate change research group which has no doubt tempered their publicly expressed views. So overall much of the funding is from less than ideal sources from an ethical point of view. It does create some issues from time to time.

robotresearcher 9y ago
Are you sure the DoE or DoD are contributing to MIT’s endowment? That seems unlikely to me. Those agencies award research contracts with statements of work on a cost plus overhead basis. That’s not at all the same as contributing to an endowment.
- mrgordon 9y ago
  "All research institutions get additional money tacked on to federal science and medical grants to help pay for general overhead. But federal rules allow institutions to deposit those payments into their general budgets, with no requirement they be used to directly support scientific endeavors." "Universities and the federal government became partners in research after World War II. MIT was one of the biggest beneficiaries. The National Institutes of Health initially set the overhead reimbursement rate at 8 percent and it eventually rose to 20 percent for all universities. In 1965, Congress permitted schools to directly negotiate their rates with the federal government, setting ballooning rates on their course." https://www.bostonglobe.com/news/nation/2013/03/17/harvard-mit-and-other-research-schools-thwart-obama-administration-effort-cap-overhead-payments/Nk5PT0Mc8MQZihFVNs5gNK/story.html https://www.bostonglobe.com/news/nation/2013/03/17/harvard-m... You are probably right that much of the money may technically not be part of the endowment but I'm not sure that the technicalities of what constitutes an endowment is very useful if they are still the main funder of the university. If universities include up to 90% "overhead" that can be deposited into their general budgets with no requirement that it supports scientific endeavors then what do we really mean when we say the DoE / DoD don't contribute to the endowment? We mean they weren't "donations" basically? The article wasn't really about donations / endowment so other than using a slightly wrong word its not really relevant to the discussion anyway. Furthermore more than half of MIT's R&D funds come from the government so this isn't exactly an edge case. Its the rule not the exception.
  - robotresearcher 9y ago
    Any MIT profs here that are prepared to comment on what fraction of their overhead is lost into the endowment? That rate is zero for me, but I'm not at MIT. Overhead for me is around 50% depending on source, and everyone here is motivated to spend as much of that on research as possible. It would be very inefficient to put that money in the general fund. Much better to fund one more PhD student than bank $50K.

robotresearcher 9y ago

Are you sure the DoE or DoD are contributing to MIT’s endowment? That seems unlikely to me. Those agencies award research contracts with statements of work on a cost plus overhead basis. That’s not at all the same as contributing to an endowment.

mrgordon 9y ago
"All research institutions get additional money tacked on to federal science and medical grants to help pay for general overhead. But federal rules allow institutions to deposit those payments into their general budgets, with no requirement they be used to directly support scientific endeavors." "Universities and the federal government became partners in research after World War II. MIT was one of the biggest beneficiaries. The National Institutes of Health initially set the overhead reimbursement rate at 8 percent and it eventually rose to 20 percent for all universities. In 1965, Congress permitted schools to directly negotiate their rates with the federal government, setting ballooning rates on their course." https://www.bostonglobe.com/news/nation/2013/03/17/harvard-mit-and-other-research-schools-thwart-obama-administration-effort-cap-overhead-payments/Nk5PT0Mc8MQZihFVNs5gNK/story.html https://www.bostonglobe.com/news/nation/2013/03/17/harvard-m... You are probably right that much of the money may technically not be part of the endowment but I'm not sure that the technicalities of what constitutes an endowment is very useful if they are still the main funder of the university. If universities include up to 90% "overhead" that can be deposited into their general budgets with no requirement that it supports scientific endeavors then what do we really mean when we say the DoE / DoD don't contribute to the endowment? We mean they weren't "donations" basically? The article wasn't really about donations / endowment so other than using a slightly wrong word its not really relevant to the discussion anyway. Furthermore more than half of MIT's R&D funds come from the government so this isn't exactly an edge case. Its the rule not the exception.
- robotresearcher 9y ago
  Any MIT profs here that are prepared to comment on what fraction of their overhead is lost into the endowment? That rate is zero for me, but I'm not at MIT. Overhead for me is around 50% depending on source, and everyone here is motivated to spend as much of that on research as possible. It would be very inefficient to put that money in the general fund. Much better to fund one more PhD student than bank $50K.