For comparison, German federal government research grants (from the BMBF) explicitly have a 20% markup that is reserved for non-research stuff. Typically this goes to the university to cover the offices of the employees who work on the project and into a fund for other stuff (grant application overhead etc). The rest is all used for salaries and project specific investments.
Theoretically that's pretty good. However if you look at a lot of the research projects you kind of scratch your head at the actual output (which imo is the real problem).
- Often less than corporate research. I know because I've also worked with them.
- Pays for things like startup packages for new faculty, administrative support, things shared by multiple groups, etc. (as well as, without a doubt, some waste, but I mean, private research companies have that too).
- Is negotiated in advance with the government.
- Is often less than the cost of doing research.