Having worked at a university research lab in the US, let me tell you that the situation isn't as clean as most people believe. When you apply for a grant, you

Having worked at a university research lab in the US, let me tell you that the situation isn't as clean as most people believe. When you apply for a grant, you add an "overhead" amount, which is specified as a percentage of the grant. A typical number is 50%: if you want $X for your lab, you apply for $X * 1.5, with the reasoning that the extra 50% is for the university to provide you with facilities, tuition wavers for your students, computer support, etc. So far, so good. What many people don't know is that of that 50% that the university collects, about 20% (actual figure can vary a lot) comes to the Dean's slush fund (so, about 10% of the grant itself using above figures). The Dean can use this money to give young faculty starter research grants; but more often, the Dean can use this money to dole out discretionary bonuses (which can be very large) to the top research faculty. So if the grantee gets a $19MM grant, you can bet that he's making 100s of 1000s of dollars in bonuses from the Dean. Anyways, the system is quite messy if you take a closer look...