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> Many who advocate for cutting NIH’s indirect cost rate have long argued that universities are willing to accept lower rates from philanthropic foundations. To

> Many who advocate for cutting NIH’s indirect cost rate have long argued that universities are willing to accept lower rates from philanthropic foundations. Today’s NIH notice, for example, notes the Gates Foundation limits indirect costs to 10%, while the Packard Foundation sets the ceiling at 15%. But such reasoning is based on “perverse logic,” Corey says, because foundations use their funds to increase the productivity of research infrastructure already paid for by the federal government. And universities say they are often willing to accept foundation grants that carry low overhead rates because those grants amount to a relatively small fraction of their funding. This detail is worth highlighting. NIH has traditionally borne the bulk of indirect costs, allowing non-profits to issue grants with low indirect costs. Slashing NIH’s indirect costs will force research institutions to seek funds elsewhere or become financially unviable.

transcriptase 2y ago
They could simply stop hiring more admin and building offices for them to work in at a rate that far exceeds student population growth or hiring of professors.
- the_snooze 2y ago
  Research overhead doesn't pay for that stuff. It pays for research-relevant infrastructure and staff. If a PI buys equipment, it's a waste to spend their own very expensive time to ensure purchase-tracking compliance. So you hire an inventory person. But it doesn't make sense to have one inventory person per research group. So you hire one to serve multiple projects and ensure their continued employment by averaging out the costs across those funding lines. That's the overhead cost.
  - transcriptase 2y ago
    “Purchase compliance” with what? Arbitrary policies set by… university admin? Full disclosure I’ve dealt with this all first hand. The vast majority of universities contribute next to nothing to research programs except the space, utilities, and IT. And those costs do not need to be a % of incoming grant money. And the vast majority do just take that cut and use it as slush fund general revenue.
    - the_snooze 2y ago
      Funding sources themselves, especially with capital expenditures for purchases $10K or higher. They want to make sure PIs are spending money on actual program equipment that's being used, and not just turning around and selling it on Ebay to line their pockets. I've dealt with this first hand because I'm a PI myself. I hate having to waste my valuable time dealing with the inventory person every couple months, but we do it because our funding sources require that kind of accountability.
      - transcriptase 2y ago
        That’s interesting. In Canada the issue is that funding sources don’t care if you’re somewhat irresponsible with capital expenditures (though not to the point of personal enrichment), but are loathe to give you any money for personnel.
        jeffbee 2y ago
        > I’ve dealt with this all first hand ... In Canada ... Consider sitting this one out.
        deleted 2y ago
        [deleted]
    - eesmith 2y ago
      You are right that it does not "need to be a %" - it could be a la carte, for example. Our physics group had access to the shared LN2 tank. It was no fee, so if you needed a few liters you could just grab it. That could be replaced with a debit system which goes directly to the account. (Hmm, and who decides how much to charge?) We got hazmat training, and the environmental safety officer was paid by the university through overhead. That could instead be billed directly to the grant. (Hmm, and who decides how much to charge, and how much training is needed?) When we installed a projector on the ceiling we were able to get building services to install the mount through the air plenum. That service could instead be billed directly against the grant. (Hmm, and who decides how much to charge?) We could book time in the sound studio to record voice-overs for one of our projects. That was free, but could be billed directly against the grant. (Hmm, and who decides how much to charge?) Some relevant materials, believe it or not, are not yet digitized, but are available in the library stacks. I could just walk there and read it, because library support was part of the overhead, but you're right - it doesn't need to be that way. The library could charge per entry and book. (Hmm, and who decides how much to charge?) I'm sure other departments have their own needs, like maintaining the herds for the ag school, or the instruments for the music department. I don't know how you could have dealt with this all first hand and not see just how much more the university provides than "space, utilities, and IT."
- postepowanieadm 2y ago
  I had some administrative experience at a peripheral university and a "good" project was one generating big administrative costs - and bonuses for administrators.
PhotonHunter 2y ago
Additionally, the base of the indirect calculation differs between grantors. NIH is MTDC (Modified Total Direct Costs) on top; Gates is TDC (Total Direct Costs) with their own schedule of allowable indirect costs. You have to do a line by line comparison to really evaluate the difference. I was first surprised that NIH put indirects on top and wondered if they were done NSF style if that would help control costs more.
robwwilliams 2y ago
Not a compelling argument. Due to federal and state policies there is a great deal bureaucracy involved in running a research project. Too much, but mandated largely by the federal government. Many institutions have to supplement even NIH grants with institutional funds. I do. NIH does not pay full salary support for many junior and senior scientists even if they work 100% on NIH projects. That is indirect support by the institution to NIH. 15% will kill academic medical research — the fountain head of a much or most progress we have made in preventing and treating a wide range of diseases.

transcriptase 2y ago

They could simply stop hiring more admin and building offices for them to work in at a rate that far exceeds student population growth or hiring of professors.

the_snooze 2y ago
Research overhead doesn't pay for that stuff. It pays for research-relevant infrastructure and staff. If a PI buys equipment, it's a waste to spend their own very expensive time to ensure purchase-tracking compliance. So you hire an inventory person. But it doesn't make sense to have one inventory person per research group. So you hire one to serve multiple projects and ensure their continued employment by averaging out the costs across those funding lines. That's the overhead cost.
- transcriptase 2y ago
  “Purchase compliance” with what? Arbitrary policies set by… university admin? Full disclosure I’ve dealt with this all first hand. The vast majority of universities contribute next to nothing to research programs except the space, utilities, and IT. And those costs do not need to be a % of incoming grant money. And the vast majority do just take that cut and use it as slush fund general revenue.
  - the_snooze 2y ago
    Funding sources themselves, especially with capital expenditures for purchases $10K or higher. They want to make sure PIs are spending money on actual program equipment that's being used, and not just turning around and selling it on Ebay to line their pockets. I've dealt with this first hand because I'm a PI myself. I hate having to waste my valuable time dealing with the inventory person every couple months, but we do it because our funding sources require that kind of accountability.
    - transcriptase 2y ago
      That’s interesting. In Canada the issue is that funding sources don’t care if you’re somewhat irresponsible with capital expenditures (though not to the point of personal enrichment), but are loathe to give you any money for personnel.
      - jeffbee 2y ago
        > I’ve dealt with this all first hand ... In Canada ... Consider sitting this one out.
      - deleted 2y ago
        [deleted]
  - eesmith 2y ago
    You are right that it does not "need to be a %" - it could be a la carte, for example. Our physics group had access to the shared LN2 tank. It was no fee, so if you needed a few liters you could just grab it. That could be replaced with a debit system which goes directly to the account. (Hmm, and who decides how much to charge?) We got hazmat training, and the environmental safety officer was paid by the university through overhead. That could instead be billed directly to the grant. (Hmm, and who decides how much to charge, and how much training is needed?) When we installed a projector on the ceiling we were able to get building services to install the mount through the air plenum. That service could instead be billed directly against the grant. (Hmm, and who decides how much to charge?) We could book time in the sound studio to record voice-overs for one of our projects. That was free, but could be billed directly against the grant. (Hmm, and who decides how much to charge?) Some relevant materials, believe it or not, are not yet digitized, but are available in the library stacks. I could just walk there and read it, because library support was part of the overhead, but you're right - it doesn't need to be that way. The library could charge per entry and book. (Hmm, and who decides how much to charge?) I'm sure other departments have their own needs, like maintaining the herds for the ag school, or the instruments for the music department. I don't know how you could have dealt with this all first hand and not see just how much more the university provides than "space, utilities, and IT."
postepowanieadm 2y ago
I had some administrative experience at a peripheral university and a "good" project was one generating big administrative costs - and bonuses for administrators.

PhotonHunter 2y ago

Additionally, the base of the indirect calculation differs between grantors. NIH is MTDC (Modified Total Direct Costs) on top; Gates is TDC (Total Direct Costs) with their own schedule of allowable indirect costs. You have to do a line by line comparison to really evaluate the difference. I was first surprised that NIH put indirects on top and wondered if they were done NSF style if that would help control costs more.

robwwilliams 2y ago

Not a compelling argument. Due to federal and state policies there is a great deal bureaucracy involved in running a research project. Too much, but mandated largely by the federal government. Many institutions have to supplement even NIH grants with institutional funds. I do. NIH does not pay full salary support for many junior and senior scientists even if they work 100% on NIH projects. That is indirect support by the institution to NIH. 15% will kill academic medical research — the fountain head of a much or most progress we have made in preventing and treating a wide range of diseases.