STAT+: Why NIH pays universities far more for indirect costs than private foundations
Universities accept less than their actual overhead costs from private sources because they're a minor piece of research budgets.
One of the key justifications the Trump administration has offered for its bombshell proposal to sharply cut what the National Institutes of Health pays research grant recipients for overhead costs is that most private organizations place similar restrictions on funding for what’s known as indirect costs.
“Most private foundations that fund research provide substantially lower indirect costs than the federal government, and universities readily accept grants from these foundations,” the agency wrote in its guidance for the proposed changes.
This is true, but scientific funding experts told STAT the comparison is not a fair one — and plaintiffs challenging the policy change in federal court have made a similar argument. While the 15% cap on indirect costs proposed by NIH is on par with what most foundations pay, universities have gone along with taking significantly less than their actual overhead costs from private sources because they get much more of their research dollars from the federal government. Private foundation funding serves as a beneficial add-on.
