4 ms·

Does anybody really know where the overhead money of top places end up ? Some institutions (eg famous ones) have near 100% overhead. Overhead sounds reasonable

by j7ake 4y ago

Does anybody really know where the overhead money of top places end up ? Some institutions (eg famous ones) have near 100% overhead. Overhead sounds reasonable for example to maintain IT and core facilities, but I have a suspicion that a lot of it is wasted in a black hole of unknown function generically labelled “admin”

godelski 4y ago
Most of the overhead goes towards admins. But it is also important to remember that many universities have multi-billion dollar endowments. It's been explained to me that "I don't know what endowments are for" when I've pointed out that my (not top 10) university could indefinitely pay for all US student tuition (and 90% of foreign) on the interest of our endowment at a 5% yearly growth. So I'm still not sure what endowments are for considering that there are 15 schools with endowments that are over 1m/student. So yeah, I still have no idea what endowments are for. https://www.collegeraptor.com/college-rankings/details/EndowmentPerStudent https://www.collegeraptor.com/college-rankings/details/Endow...
- gumby 4y ago
  In the us the size of endowment affects US News college rankings. So it’s not to be touched!
kmmlng 4y ago
I'm not in the US, but from what it sounds like, the situation isn't much different where I live. A surprising amount of overhead goes to employees in accounting who perform some black magic so that everyone on staff is payed by some combination of projects. Whether someone actually works on said projects is irrelevant of course.
mattkrause 4y ago
100% is a bit of an exaggeration. I’ve heard of one place with a 100% overhead rate and it was for something very specialized (marine research vessels, which probably do eat money). Everywhere else I know of is near 50 percent, and this includes “famous” places (Yale, McGill, MIT, Georgetown, etc). The overhead rates are supposed to reflect the University’s actual costs and are negotiated with the government, so I suppose you could try to make a FOIA request for them.
dmurray 4y ago
100% seems reasonable for other businesses. If I had a factory with 100 people assembling my product, or a sales team with 100 people selling it, I'd be quite happy to only budget for the cost of another 100 people to pay my rent and run my IT, payroll, accounting, janitorial services, maintaining my machinery... I get the impression that modern universities have five or ten other employees for each teacher/researcher, which assuming everyone gets the same pay implies 500-1000% overhead, or subsidy from sources other than grants.
- ok123456 4y ago
  The problem is that they've created a whole hierarchy of useless deans and other admins to eat up all that overhead to justify it.
WSchneller 4y ago
Most universities have their negotiated Facilities and Administrative (F&A) rates posted online via their Sponsored Research Office. For example, Harvard charges a 68% indirect rate and Stanford about 58%. The public R1 institutions I’ve done business with charge 40-50%. This doesn’t paint the whole picture though as sometimes additional overhead costs (eg. healthcare benefits) can be budgeted as Fringe Benefits for personnel working directly on the project. In that situation, the F&A rate would stack on top of those costs.

by j7ake 4y ago

godelski 4y ago

Most of the overhead goes towards admins. But it is also important to remember that many universities have multi-billion dollar endowments. It's been explained to me that "I don't know what endowments are for" when I've pointed out that my (not top 10) university could indefinitely pay for all US student tuition (and 90% of foreign) on the interest of our endowment at a 5% yearly growth. So I'm still not sure what endowments are for considering that there are 15 schools with endowments that are over 1m/student. So yeah, I still have no idea what endowments are for. https://www.collegeraptor.com/college-rankings/details/EndowmentPerStudent https://www.collegeraptor.com/college-rankings/details/Endow...

gumby 4y ago
In the us the size of endowment affects US News college rankings. So it’s not to be touched!

kmmlng 4y ago

I'm not in the US, but from what it sounds like, the situation isn't much different where I live. A surprising amount of overhead goes to employees in accounting who perform some black magic so that everyone on staff is payed by some combination of projects. Whether someone actually works on said projects is irrelevant of course.

mattkrause 4y ago

100% is a bit of an exaggeration. I’ve heard of one place with a 100% overhead rate and it was for something very specialized (marine research vessels, which probably do eat money). Everywhere else I know of is near 50 percent, and this includes “famous” places (Yale, McGill, MIT, Georgetown, etc). The overhead rates are supposed to reflect the University’s actual costs and are negotiated with the government, so I suppose you could try to make a FOIA request for them.

dmurray 4y ago

100% seems reasonable for other businesses. If I had a factory with 100 people assembling my product, or a sales team with 100 people selling it, I'd be quite happy to only budget for the cost of another 100 people to pay my rent and run my IT, payroll, accounting, janitorial services, maintaining my machinery... I get the impression that modern universities have five or ten other employees for each teacher/researcher, which assuming everyone gets the same pay implies 500-1000% overhead, or subsidy from sources other than grants.

ok123456 4y ago
The problem is that they've created a whole hierarchy of useless deans and other admins to eat up all that overhead to justify it.

WSchneller 4y ago

Most universities have their negotiated Facilities and Administrative (F&A) rates posted online via their Sponsored Research Office. For example, Harvard charges a 68% indirect rate and Stanford about 58%. The public R1 institutions I’ve done business with charge 40-50%. This doesn’t paint the whole picture though as sometimes additional overhead costs (eg. healthcare benefits) can be budgeted as Fringe Benefits for personnel working directly on the project. In that situation, the F&A rate would stack on top of those costs.