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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 are

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?

forrestthewoods 2y ago
59% is borderline criminal. Perhaps 15% is too low. But 59% is absurd and unacceptable.
- cute_boi 2y ago
  FYI, Overhead don't include everything. Even in remaining 49% there are many overheads :)
- linksnapzz 2y ago
  The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right.
  - forrestthewoods 2y ago
    Fraudulent orgs also keep getting funds. That don’t make it right.
    - johnnyanmac 2y ago
      So, what's the fraud? I'm a bit tired of that word as of late as some kind of catch-all for "I don't understand how this works and I don't like it".
      - forrestthewoods 2y ago
        I’m not accusing any particular organization of fraud. I am rejecting the notion that just because one institution historically receives funds that those funds were put to good use. I understand how grants and overhead rates work. It’s an embarrassment.
        johnnyanmac 2y ago
        "you're not literally saying fraud, but you're also not NOT saying it's fraud" 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.
        forrestthewoods 2y ago
        > The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right. 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”.
        wredcoll 2y ago
        And yet in all your replies you've yet to make an actual substantial point. All you said was "I think this is bad and they should prove they aren't". Find something real to criticize and do it with actual facts.
        forrestthewoods 2y ago
        lol
- aaronharnly 2y ago
  It’s worth clarifying that the 59% overhead rate doesnt mean 59% of the funds go to overhead. If you have a $1m grant, you add on $590k for overhead. Then the total grant is $1.59m, so actually 37% of the total funds are for overhead.
- MITSardine 2y ago
  I'm curious, why do you find this so high? 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).
jofer 2y ago
It's pretty typical, actually. 50% is about the minimum that major universities take out of a grant you get as a researcher at the university. 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.
- rayiner 2y ago
  Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (lab space, equipment, etc)? 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.
  - SJC_Hacker 2y ago
    Its essentially a subsidy, and been abused for years. 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.
jeffbee 2y ago
High overhead indicates efficiency, not waste. 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".
- largbae 2y ago
  I am trying to follow this... 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?
  - tarlinian 2y ago
    Plenty of actual research costs count as overhead to avoid the need to hire an army of accountants to allocate every single bit of spend. 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".
    - rayiner 2y ago
      Well how do you know that if you aren’t accounting for it?
      - PhotonHunter 2y ago
        F&A rates (facilities and administration, “indirects”) are subject to negotiation every 4 (IIRC) years, where those costs are accounted for (perhaps not well enough, but that is a separate point). The administrative component of F&A been capped at 26% for years and R1 universities are maxed out, so the negotiations are over the facilities component.
bglazer 2y ago
First the rate was negotiated on a per institution basis with the government. It’s based around a mountain of oversight and compliance. Ironically all that compliance work contributes to the need for more administration. 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.
fooker 2y ago
>Could it be that these charges against grants are used to fund students in other subject areas where grants are not available? 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.
deleted 2y ago
[deleted]

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?

forrestthewoods 2y ago

59% is borderline criminal. Perhaps 15% is too low. But 59% is absurd and unacceptable.

cute_boi 2y ago
FYI, Overhead don't include everything. Even in remaining 49% there are many overheads :)
linksnapzz 2y ago
The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right.
- forrestthewoods 2y ago
  Fraudulent orgs also keep getting funds. That don’t make it right.
  - johnnyanmac 2y ago
    So, what's the fraud? I'm a bit tired of that word as of late as some kind of catch-all for "I don't understand how this works and I don't like it".
    - forrestthewoods 2y ago
      I’m not accusing any particular organization of fraud. I am rejecting the notion that just because one institution historically receives funds that those funds were put to good use. I understand how grants and overhead rates work. It’s an embarrassment.
      - johnnyanmac 2y ago
        "you're not literally saying fraud, but you're also not NOT saying it's fraud" 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.
        forrestthewoods 2y ago
        > The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right. 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”.
        wredcoll 2y ago
        And yet in all your replies you've yet to make an actual substantial point. All you said was "I think this is bad and they should prove they aren't". Find something real to criticize and do it with actual facts.
        forrestthewoods 2y ago
        lol
aaronharnly 2y ago
It’s worth clarifying that the 59% overhead rate doesnt mean 59% of the funds go to overhead. If you have a $1m grant, you add on $590k for overhead. Then the total grant is $1.59m, so actually 37% of the total funds are for overhead.
MITSardine 2y ago
I'm curious, why do you find this so high? 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).

jofer 2y ago

It's pretty typical, actually. 50% is about the minimum that major universities take out of a grant you get as a researcher at the university. 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.

rayiner 2y ago
Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (lab space, equipment, etc)? 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.
- SJC_Hacker 2y ago
  Its essentially a subsidy, and been abused for years. 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.

jeffbee 2y ago

High overhead indicates efficiency, not waste. 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".

largbae 2y ago
I am trying to follow this... 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?
- tarlinian 2y ago
  Plenty of actual research costs count as overhead to avoid the need to hire an army of accountants to allocate every single bit of spend. 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".
  - rayiner 2y ago
    Well how do you know that if you aren’t accounting for it?
    - PhotonHunter 2y ago
      F&A rates (facilities and administration, “indirects”) are subject to negotiation every 4 (IIRC) years, where those costs are accounted for (perhaps not well enough, but that is a separate point). The administrative component of F&A been capped at 26% for years and R1 universities are maxed out, so the negotiations are over the facilities component.

bglazer 2y ago

First the rate was negotiated on a per institution basis with the government. It’s based around a mountain of oversight and compliance. Ironically all that compliance work contributes to the need for more administration. 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.

fooker 2y ago

>Could it be that these charges against grants are used to fund students in other subject areas where grants are not available? 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.

deleted 2y ago

[deleted]