[transcriptase]

One of the main issues with overhead on grants is that it has nothing to do with overhead on the research itself. It’s instead a tax that a university applies to money that researchers bring in, that they use as general revenue to fund, for lack of a better term, bullshit including hiring more admin instead of professors.

A $8M grant doesn’t cost a university any more than a $1M grant for university admin in terms of “indirect costs”. The fact that they think they’re entitled to several million of it to waste on things that shouldn’t be coming from taxpayer funded NIH grant money is obscene.

[secabeen]

> A $8M grant doesn’t cost a university any more than a $1M grant for university admin in terms of “indirect costs”. The fact that they think they’re entitled to several million of it to waste on things that shouldn’t be coming from taxpayer funded NIH grant money is obscene.

Sure it does. An 8M grant is going to have roughly 8X more researchers working under it than a 1M grant. Each of those researchers needs space, parking, IT support, HR supports, etc. There are some economies of scale, but the idea that you could increase the staffing of a business by 8x and not have to hire more HR and accounting people is silly.

[robwwilliams]

Yes, I agree the overhead scales close to linear unless a grant is very heavily dependent on one type of cost such as bulk sequencing of 10,000 subjects. In that case the overhead is usually much lower or disallowed. And there is no overhead allowed on equipment.

[syndicatedjelly]

This is such a wasteful way to think...do economies of scale not apply to universities at all? They're allowed to just bill as if there is 0 savings to be found in bulk construction and administration?

[secabeen]

Generally, no, they don't bill at 0 savings. The rate is set on a per-institution basis. The rate setting process incorporates the documented economics of scale that that institution is achieving already. This is why schools have different rates; the more resources (instruments, facility use, computational, etc.) the university provides at no/low-cost to the researchers, the higher the rate.

If the rate wasn't set in this way, the overhead would be well above 100%, as it is in most labor-heavy businesses like consulting and law.

[jeffbee]

You don't seem to have any experience with the subject. The "overhead" in question is, for example, the person who keeps clean glassware in inventory for chemistry, or the veterinarian for animal subjects, or the ethics board.

[transcriptase]

And in the case of massive projects where service providers do the wet work, your lab primarily deals with data analysis, or you don’t even do your research with university space/equipment, they still get 30-60% just because.

This isn’t some conspiracy theory. Look at how much grant money a given university brings in annually and ask yourself if 30-60% of that number is being spent on overhead related to research. It’s not.

[secabeen]

> Look at how much grant money a given university brings in annually and ask yourself if 30-60% of that number is being spent on overhead related to research. It’s not.

Look at a consulting company or law firm. Most will charge you 2-3x the salary cost of the consultant or lawyer you're getting. This limits universities to 1.15x.

[meetingthrower]

Right - but as a consulting partner I take home that margin to spend on my boats, homes, and watches. What are universities getting? More university...

[secabeen]

To be clear, this is not margin, it's non-direct expenses. So the consulting partners probably take home half of that multiplier as profits, and the other half goes to pay for the paralegals, AR/AP, HR, IT, office lease, janitorial .... all the things that Universities use their overhead to cover. What a surprise!

[jeffbee]

It is. The larger the institution, the higher the overhead ratio, perversely because they are more efficient scientific organizations. UCSF can get a grant to study something and 2/3rds of the costs are overhead because absolutely everything at that institution is shared.

[Mortiffer]

I have not found a single prof that thinks the trend have having higher and higher % of university staff be administrators is a good thing.

I wonder if it is possible for them to connect funding to a maximum allowed ratio of admin to prof / lectures