This article is...very misleading, implying that "overhead" is (in some dirty or despicable way) "taken" by the university. It's not. The indirect costs are added to the grant, so if you get a $500k grant, the university gets an extra percentage. Sample citation: https://www.science.org/content/article/nih-plan-reduce-over...
> The federal government has been adding indirect cost payments to research grants since 1947. Today, each university negotiates its own overhead rate—including one rate for facilities and one for administration—with the government every few years. Rates vary widely because of geography—costs are higher in urban areas—and because research expenses differ. Biomedical science, for example, often requires animal facilities, ethics review boards, and pricey equipment that aren't needed for social science. The base rate for NIH grants averages about 52%—meaning the agency pays a school $52,000 to cover overhead costs on a $100,000 research grant (making overhead costs about one-third of the grant total). Universities usually don't receive the entire 52%, however, in part because some awards for training and conferences carry a lower rate, and because certain expenses such as graduate student tuition don't qualify.
The author is also engaging in manipulative data presentation techniques (such as presenting the cost of a graduate student for five years, making it sound like an outrageously large $233,000, and not $46k/year, which when you factor in the number of hours a grad student typically works, is likely around federal minimum wage.)
If anyone would actually like to read up about the subject, here are some starting points:
If the NIH gives you a "$5M" grant, you get the $5M plus the F&A costs. I don't know how NSF does it.
There are a lot of rules around what grant money can and cannot be spent on, and the rules are specifically set up to try and prevent administrators from taking more than what is reasonable for keeping the lights on, staff paid, etc.
To everyone getting outraged in the comments about evil universities and schools 'stealing' research dollars: you are being manipulated by a computational researcher who likely is not even remotely aware of the costs of the infrastructure to support them, such as computational/storage clusters they utilize. Those clusters, if supported from F&A/indirect costs, often cannot have usage charges, because that would be "double dipping."
This is something that varies widely by funding agency- you are correct that NIH grant budget limits are exclusive of indirects, but for the NSF the opposite is true. Different funders handle that differently, and additionally some funders have a cap on the indirect rate that they will allow. Many private foundations will only an indirect rate of 20%, for example. Some corporate grants that I've seen do not allow for any indirects at all.
Depending on your institution, and how they do their accounting, this can have serious negative effects for investigators. At an academic medical center, the majority of PIs are NIH funded, so all of the accounting and finance planning for research assumes a 54% indirect cost rate- so if, for whatever reason, your portfolio of grants doesn't fit that mold, you can have issues. I have known PIs who had multiple very large grants from private foundations, and so were not producing the expected amount of indirects and ended up being a net negative to their department's bottom line. This caused them (and their department chair) all kinds of problems.
Accounting and grant budgeting are two of the things that I wish I'd learned more about in grad school!
F&A comes out of NSF grants. If I get a 500K grant, the first 150k or so would have gone to my university. Some universities this overhead number would be lower, some higher, but it is taken out first.
> The author is also engaging in manipulative data presentation techniques (such as presenting the cost of a graduate student for five years
I shared the yearly/monthly breakdown the sentence before that: "It includes their salary ($2200 a month), tuition ($15,000 a year), and benefits ($200 a month)."
I didn't post anything misleading or inaccurate. I included screenshots of my cumulative budget pages and included specific numbers to make examples more concrete. Not making any claim as to whether F&A is evil or not (it’s not).
You purposefully multiplied the grad student's compensation by five years to make it sound like a huge number.
You purposefully cited the NSF as an example, and left out mention that the NIH (five times the funding of NSF) and numerous other organizations, provide for F&A overhead.
You present the 30% "take" as being high, when it's actually very reasonable, and you clearly think it's all one giant waste of money. Heat, cooling, water, power, internet, computational clusters, internet connections? Those don't cost money! I don't have lab space! Why am I being charged overhead!?
Over and over you're clearly manipulating readers to generate outrage. The whole piece is one giant bitch-fest; woe be the poor AI researcher!
Do you not understand how you're fueling anti-science-research efforts? The level of threat scientific research funding is constantly under? And how one of the most frequent means of attack is the perceived wasteful overhead?
The author is a computational researcher, and most of his funding likely comes from NSF not NIH. Why would you expect him to write about how NIH grants work? Why would you expect him to write how things work in life sciences? If you have an issue with it write your own blog post and share it.
As a non-academic I have to say I didn't read it like that. I saw no outrage, and I don't see 200k over 5 years as a big number. And I didn't get the sense that the support thought it was a big number.
I say this not to invalidate your reading of the article (I'm not down voting you), but merely to say that for one not invested in the area, I didn't see the emotions you see.
Which speaks to me about how it's easy, and dangerous, to ascribe motivations and emotions to a piece when they may not be there.
I found it interesting as a well detailed piece, I assumed most grants just went as salary to the researcher, and that cleared this up.
Also, perhaps I'm more aware of what things cost running a business, and so an "overheads" cost of 30% seems reasonable. Our cost-to-salary ratio is higher than that.
Yes, that's why it's "overhead" because it's just the cost to play the game.
But after overhead, even R01 grants which sound "massive" will just end up paying for a couple of PhDs and postdocs over four years at the end. But there's some "inflation" of overhead going on over the years, so the bang for your buck is dwindlding
This is a good post, and I’m glad to see someone knowledgeable commenting. Other federal agencies do tend to award in fixed amounts, so the intricacies of indirect can get very complicated. Foundation indirects aren’t a debate worth having. They make the choice to pay indirects, the recipients will happily accept them.
My main response to the author, though, is what exactly does he expect the grant to cover? It’s paying for his time, infrastructure used, and the cost of supporting a grad student who’s likely generating the bulk of the data. These are the very real expenses of his research…
> The federal government has been adding indirect cost payments to research grants since 1947. Today, each university negotiates its own overhead rate—including one rate for facilities and one for administration—with the government every few years. Rates vary widely because of geography—costs are higher in urban areas—and because research expenses differ. Biomedical science, for example, often requires animal facilities, ethics review boards, and pricey equipment that aren't needed for social science. The base rate for NIH grants averages about 52%—meaning the agency pays a school $52,000 to cover overhead costs on a $100,000 research grant (making overhead costs about one-third of the grant total). Universities usually don't receive the entire 52%, however, in part because some awards for training and conferences carry a lower rate, and because certain expenses such as graduate student tuition don't qualify.
The author is also engaging in manipulative data presentation techniques (such as presenting the cost of a graduate student for five years, making it sound like an outrageously large $233,000, and not $46k/year, which when you factor in the number of hours a grad student typically works, is likely around federal minimum wage.)
If anyone would actually like to read up about the subject, here are some starting points:
https://www.nsf.gov/bfa/dias/caar/indirect.jsp
https://grants.nih.gov/grants/policy/nihgps/html5/section_7/...
If the NIH gives you a "$5M" grant, you get the $5M plus the F&A costs. I don't know how NSF does it.
There are a lot of rules around what grant money can and cannot be spent on, and the rules are specifically set up to try and prevent administrators from taking more than what is reasonable for keeping the lights on, staff paid, etc.
To everyone getting outraged in the comments about evil universities and schools 'stealing' research dollars: you are being manipulated by a computational researcher who likely is not even remotely aware of the costs of the infrastructure to support them, such as computational/storage clusters they utilize. Those clusters, if supported from F&A/indirect costs, often cannot have usage charges, because that would be "double dipping."