As has been previously noted, HN seems to be convinced 50% overhead means that 50% of the grant is taken to cover overhead.

This is inaccurate. That would be 100% overhead, which is vanishingly rare (I've only encountered one institution above that rate, and they have to maintain research ships).

50% overhead means that the indirect costs of a grant are 50% of the direct costs, i.e. 1/3rd of the total grant. Notably, a lot of grant mechanisms (i.e. NIH R01s) are discussed at the direct cost rate, instead of the totals, so this doesn't "sting" nearly as badly as you all seem to think it does.

Additionally:

- I've seen private industry overhead rates. They're not lower. Indeed, many of them are quite a bit higher.

- A funder can specify a cap on overhead costs, and as long as that's public and known, every university I've ever been at has accepted it. The Gates Foundation is notorious for this, as are most charities. Hell, I had a grant from Merck that didn't pay "full freight".

- We push back on overhead costs all the time. Faculty are wily creatures. We have lots of ways.

I saw a "private grant" project funded at $500k, the budget that hit floor where work actually happened was $25k. The accountants went to absurd lengths to turn that into "$75k spent" in the year end statements, but it didn't help: the CEO met with the grant givers the next year on the porch of his brand new house, to explain why the actual goals they'd funded hadn't been realized yet. The people doing the work weren't invited; but we heard the story later about how much blame we took for the failure.

I think the problem though is that whatever those indirects are, they exceed the actual costs, and those direct costs are covering important things. So the indirects are being used as profit at what is supposed to be a nonprofit.

That might be fine except then it leads to massive distortion in incentives, so faculty are being driven to bring in money rather than do research per se.

It's kinda like the classic stereotype of a drug company not putting any RD money into something where they can't control the profit, despite efficacy, only now you're talking about this happening at a nonprofit that's supposed to be committed to research for its own sake.

These rates are negotiated with the government, and aren't exceeding the actual costs. Indeed, someone I know crunched the numbers for my institution, and the "margin" is exceedingly tight, and for some projects, negative.

I am faculty, and while yes, we are incentivized to bring in money, we also have output too. And believe me, when talking to funders, "gee, I didn't do any work because I was bringing in more grants" is a pretty dangerous strategy.

Indirects also cover important things. On my current grants, the following are covered by indirect costs, just as examples.

- The data center and networking infrastructure where my particular nodes on our cluster live.

- My actual office, including things like the facilities folks that keep it clean, lighting and heating, IT infrastructure again, as well as things like paper for the printer because I prefer to read on actual paper.

- The library and journal subscriptions that provide me the material I actually need to read.

- The admins who are helping shepherd a position I'm hiring for through the process of doing that, posting the position descriptions on the relevant sites, etc. The one who put in a bunch of orders for me for an international project where it's cheaper to buy the stuff here, set it up, and then carry it with me than it is to get it there. The one who knows the reporting requirements I don't. The IRB admin who helped us figure out some human subjects issues around doing research that involves university employees in their capacity as employees. The admin that helped me actually prepare and submit the proposal.

- The attorney that helped review and sort out several fairly complex agreements, as well as a whole host of fairly simple ones that still needed to be checked.

- The senior level administrator (the usual boogeyman in these things) who is spearheading an effort to consolidate several of individual-level efforts into something that's coherent at the university level, so we can actually act on things that don't require individual-level researchers like me to have the bandwidth to keep a relationship alive, and which persists past turnover either at the university or the organizations we are working with.

- The startup funding for a new disease ecologist before I can put them on some new grants.

All of these help propel my research forward. My indirects pay for my share of these people's time and expertise. And importantly, they help cover things that I can't foresee, or are enough layers of removed from me that I don't even really know who we're paying as much as "This thing gets done".

Is there waste in our indirects? Sure. There's waste everywhere. But it's both hardly the terribly oppressive burden HN seems to think it is (even leaving aside that HN consistently does the math wrong) and something that exists in industry as well - it's just hidden in the total price.

Incidentally, my institution is also perfectly happy to just quote folks a fully burdened price.

What happens when we don't charge full indirect costs?

The taxpayers of my state end up making up the difference, because the lights, and the reporting bits, and the IRB, etc. still have to exist to get the work done. And for some projects one might be able to justify that, but for some others (waves at industry) I have a problem with it.

> (ie 50%+ of grant contracts going to university overhead!).

This is why a lot of grants are made in-kind rather than in cash. Give the research $750K in equipment instead of $1M in cash where the university pockets $500k of it.

As noted elsewhere, that's not how overhead works, and vanishingly few grants are in-kind.

Also, expressly, large capital expenditures like equipment are exempt from indirect costs at most universities.

HN's notion of how universities work is probably about as accurate as my notions of how VC funding works.

In-kind grants are fairly uncommon and generally aren't a "substitute" for cash: salaries, even being what they are, are a fairly major expense for most labs.

In my experience, in-kind grants mostly occur when the "giver" has/gets the "gift" cheaply. For example, NVIDIA gave out tons of graphics cards, but they certainly don't pay full retail for their own product. This lets them give you a grant "worth" $5k, but costs them substantially less. Ditto pharma companies, which may not even sell the thing given.

It seems clever to give the funder a shopping list, and then get an "in-kind" grant for exactly what you want. However, many places will waive/reduce indirect costs on equipment (which, per the NIH is $5000 and lasts for >1 year).

also

- getting paid below (barely above if you are lucky) 6 figures

- requires 3+ years of postdoc training which paid even worse

Yeah. 6 figures would put me back on ramen.

the successful professors that I've seen out source everything but number 1 and get a healthy cut of number 5.