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"Grants and contracts revenue represents the largest component of University revenue ($1.5 billion and 38%)."[0] Indeed. Many large US universities are more ac

by djoldman 10mo ago

"Grants and contracts revenue represents the largest component of University revenue ($1.5 billion and 38%)."[0] Indeed. Many large US universities are more accurately labeled as research centers with schools attached. Because those grants are extremely restricted in what they can pay for, it's not quite accurate to include them in anything like an "available operating revenue" number. [0]https://resources.finance.duke.edu/resources/docs/Financial_Reports2023-24.pdf https://resources.finance.duke.edu/resources/docs/Financial_...

SoftTalker 10mo ago
Yes, grant money must be spent according to the approved budget plan for the grant. But Duke is also one of the "elite" schools that charge over 60% "overhead" on federal research grants.
- conception 10mo ago
  Most federal grants offer that level of overhead, or did. And not sure why overhead is in quotes. You can’t charge electricity or HR to directs.
  - SoftTalker 10mo ago
    Duke's overhead rate is (was) among the highest. Average for all universities is 28%. https://www.forbes.com/sites/georgecalhoun/2025/02/26/universities-face-a--reckoning-over-federal-rd-funding-pt-1/ https://www.forbes.com/sites/georgecalhoun/2025/02/26/univer...
    - estearum 10mo ago
      Unsurprisingly it appears the universities with the most advanced facilities/equipment and are therefore able to conduct the most advanced research have the highest overhead rates.
      - bpt3 10mo ago
        I would love to see a breakdown of what overhead is going to pay for that "most advanced facilities/equipment" and what is paying for the assistant to the assistant vice provost to hire a new assistant. As someone who interacts with R1 research institutions as an adjunct and a prime contractor hiring professors as subs, they are far from efficient (like any large organization). My issue is that the people who are producing the actual value are paid and treated pretty poorly generally, and treated as cattle specifically by people whose contributions to anything of substance are extremely unclear but are quite well paid.
        estearum 10mo ago
        Agreed, totally a discussion worth having there. But you kinda point to my assumption on this: "like any large organization." I'm doubtful that the organizations at the top end of the list are 4x more bureaucratically bloated than those at the bottom end of it. I'm highly confident that much more sophisticated research has much higher indirect cost, because a defining characteristic of "sophisticated research" is that it entails exquisite facilities and equipment that cannot possibly be paid for under individual studies. Another thing I'm confident of is that Harvard et al have much more talented negotiators than the smaller schools, and I'm sure that plays a role. I would be surprised if it explains the bulk of the discrepancy.
        bpt3 10mo ago
        It really makes no sense for overhead to be calculated at the university level, but it sounds like that's how it is done? Sophisticated research into particle physics, material science, and (for the last several years) AI does come with significant overhead costs for opex. Sophisticated research into most of computer science, mathematics, and other theoretical scientific disciplines does not, let alone humanities research. I think a large portion of the difference in overhead rates is due to the last item you are confident of in your list (i.e. Duke can tell NIH "if you want our world class researchers to work on this problem, here are our rates", and some random school cannot).
    - jltsiren 10mo ago
      The 28% claim is wrong. It seems to be based on a common misunderstanding of how overhead rates are calculated. In the supplementary table cited as the source, 72.1% of the total costs were awarded as direct costs and 27.9% as indirect costs (NIH, around 2020). That means an average overhead rate of 38.7% over all grants. Because some grants (such as equipment grants) have lower overhead rates, the average over grants with a normal overhead rate is higher. At my (unexceptional public R1) university, the latest negotiated rates are 56.5% for on-campus research and 26% for off-campus research. The latter is lower, because many expenses that are normally covered by indirect costs become direct costs in off-campus research.
      - djoldman 10mo ago
        Are they not a maximum of 15% now after the administration's actions?
      - bpt3 10mo ago
        I was going to check this, so thanks for doing that work. There are at least 3 ways I'm aware of to calculate overhead rates, so I suspected people were comparing oranges to apples in some places.

SoftTalker 10mo ago

Yes, grant money must be spent according to the approved budget plan for the grant. But Duke is also one of the "elite" schools that charge over 60% "overhead" on federal research grants.

conception 10mo ago
Most federal grants offer that level of overhead, or did. And not sure why overhead is in quotes. You can’t charge electricity or HR to directs.
- SoftTalker 10mo ago
  Duke's overhead rate is (was) among the highest. Average for all universities is 28%. https://www.forbes.com/sites/georgecalhoun/2025/02/26/universities-face-a--reckoning-over-federal-rd-funding-pt-1/ https://www.forbes.com/sites/georgecalhoun/2025/02/26/univer...
  - estearum 10mo ago
    Unsurprisingly it appears the universities with the most advanced facilities/equipment and are therefore able to conduct the most advanced research have the highest overhead rates.
    - bpt3 10mo ago
      I would love to see a breakdown of what overhead is going to pay for that "most advanced facilities/equipment" and what is paying for the assistant to the assistant vice provost to hire a new assistant. As someone who interacts with R1 research institutions as an adjunct and a prime contractor hiring professors as subs, they are far from efficient (like any large organization). My issue is that the people who are producing the actual value are paid and treated pretty poorly generally, and treated as cattle specifically by people whose contributions to anything of substance are extremely unclear but are quite well paid.
      - estearum 10mo ago
        Agreed, totally a discussion worth having there. But you kinda point to my assumption on this: "like any large organization." I'm doubtful that the organizations at the top end of the list are 4x more bureaucratically bloated than those at the bottom end of it. I'm highly confident that much more sophisticated research has much higher indirect cost, because a defining characteristic of "sophisticated research" is that it entails exquisite facilities and equipment that cannot possibly be paid for under individual studies. Another thing I'm confident of is that Harvard et al have much more talented negotiators than the smaller schools, and I'm sure that plays a role. I would be surprised if it explains the bulk of the discrepancy.
        bpt3 10mo ago
        It really makes no sense for overhead to be calculated at the university level, but it sounds like that's how it is done? Sophisticated research into particle physics, material science, and (for the last several years) AI does come with significant overhead costs for opex. Sophisticated research into most of computer science, mathematics, and other theoretical scientific disciplines does not, let alone humanities research. I think a large portion of the difference in overhead rates is due to the last item you are confident of in your list (i.e. Duke can tell NIH "if you want our world class researchers to work on this problem, here are our rates", and some random school cannot).
  - jltsiren 10mo ago
    The 28% claim is wrong. It seems to be based on a common misunderstanding of how overhead rates are calculated. In the supplementary table cited as the source, 72.1% of the total costs were awarded as direct costs and 27.9% as indirect costs (NIH, around 2020). That means an average overhead rate of 38.7% over all grants. Because some grants (such as equipment grants) have lower overhead rates, the average over grants with a normal overhead rate is higher. At my (unexceptional public R1) university, the latest negotiated rates are 56.5% for on-campus research and 26% for off-campus research. The latter is lower, because many expenses that are normally covered by indirect costs become direct costs in off-campus research.
    - djoldman 10mo ago
      Are they not a maximum of 15% now after the administration's actions?
    - bpt3 10mo ago
      I was going to check this, so thanks for doing that work. There are at least 3 ways I'm aware of to calculate overhead rates, so I suspected people were comparing oranges to apples in some places.