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).