Money is of key importance for conducting scientific research (see my earlier post in the Basic Introductions category on “Introduction to Money in Modern Scientific Research”). The tax-paying public is familiar with the use of research grant money to pay for the acquisition of chemicals, conduction of assays and measurements, procurement of research samples, purchase and repair of laboratory instruments, purchase of test-tubes and other research supplies, publication of research reports in journals, etc. All these expenses are for the direct costs of doing research. Most people are completely unaware that there is a second and very different type of expense in conducting a research study.
Research grants to universities, technology institutes, and medical schools also pay for the indirect costs of doing research. These include all the adjunctive expenses necessary to support using an active research laboratory to perform experiments (e.g., daily maintenance, distribution of regulated electricity, garbage collection and disposal, heating and cooling, painting, routine administration, safety activities and facilities, water provision and drainage, etc.). There can be no question that these indirect expenses are totally needed for the conduct of experiments in university research laboratories; corresponding expenses also occur for scientists working at industrial research and development labs.
Indirect vs. Direct Costs in Typical Research Grants
The amount of support used for indirect expenses is determined by periodic negotiations between each institution receiving research grant awards and the granting agencies. These negotiations are held behind closed doors, and the Principal Investigators composing and submitting applications for a research grant have no input into this process. The total indirect costs awarded by federal granting agencies are calculated as some agreed percentage of the total direct costs awarded by a research grant (e.g., 35-75%).
The public also is not very aware that the direct costs awarded in support of any research project can be less than half of the total dollars provided by a research grant. For some large very well-respected educational institutions in the USA, the official indirect cost rate is over 100%. In such cases, the total funds awarded to those institutions by any research grant actually is over double the commonly stated figure for the total direct costs. For example, with an approved indirect cost rate of 125%, a grant awarding $500,000 for total direct costs also gives another $625,000 for indirect costs, meaning the total award is $1,125,000. Hence, indirect cost awards can be a very substantial amount of money!
How do Science Faculty View Indirect Costs in Research Grant Awards?
I personally know that many funded faculty research scientists at universities have large doubts about realities in the current system for paying the indirect expenses of their lab research. One area of doubt is the official percentage figure for their institution, which often seems to be much too high. A second common doubt concerns the actual provision of the specified important activities listed in justifications for the approved percentage figure for indirect costs. Usually, funded faculty scientists choose to keep quiet about their misgivings, since these “involve something beyond my influence and control”. A few individual faculty members do occasionally complain about deficiencies in routine services provided by their employing institution (e.g., “My trash has not been picked up for 3 days now!”), but they never go on to ponder the various probable causes and possible misuses of their research grant funds designated for indirect expenses (e.g., diversion into other university accounts).
These common doubts lead to suspicions amongst university science faculty that the provision of research grant funds for indirect expenses is peculiar and really must have some additional unspoken function(s) beyond paying for the adjunct costs of doing laboratory research. This suspicion almost never is openly discussed, since most faculty scientists are much more personally concerned with their own research projects, and not with what their employer might be “receiving on the side”. In forthcoming posts, I will discuss some theoretical possibilities which could explain what might be happening.
The approved rates for indirect cost awards vary considerably between different institutions, as a function of their location, size, labor costs, number of faculty and other employees, type of construction, etc. As a blatant example of the very large variations in indirect expenses between different academic institutions, I once went to work with a faculty collaborator at a large academic institution in Philadelphia on 2 consecutive days. I saw with my own eyes that his laboratory rooms had a daily damp-mopping of the floors. I was totally astounded to see that happening because at my own institution the lab floors were never damp-mopped, and were wet-mopped only a few times each year. The indirect cost rates at these 2 universities certainly differed, but not by such a huge amount!
Who Pays and Who Does Not Pay for the Indirect Costs of Scholarship and Research at Universities?
Usually. only faculty scientists having a research laboratory are required to pay for indirect expenses via their research grants. Faculty members researching in other areas of scholarly endeavor mostly are not required to pay for the indirect costs of their investigations. Those others include nearly all faculty working in art and music, classics, computer science, history, library science, linguistics, literature, and statistics. This also can include some scholars working in astronomy, economics, engineering, environmental science, mathematics, psychology, or social science. In all such cases, their indirect expenses must be paid by some other institutional funds, and presumably are seen as simply representing the routine costs of university business. One should note here that smaller non-federal granting agencies often do not provide any payments for indirect expenses, yet most universities still are happy to receive those awards; the indirect costs for these smaller grant-supported investigations certainly still exist, but are being paid by some other budget.
Indirect expenses for faculty offices, teaching activities in lecture and laboratory classrooms, and small conferences held in a campus room, normally are paid by the university as a normal operating expense. It is only faculty scientists conducting research in laboratories who are required to pay for the indirect costs of their experimental investigations. Senior science faculty members studying education in their science courses are not charged for the indirect costs of these investigations.
Several conclusions now can be drawn: (1) research grants are used to pay for indirect expenses by all science faculty researching in a laboratory, (2) many scholarly investigations by faculty not needing to work in a research laboratory have their indirect expenses paid by some internal budget at the same institutions, (3) research grant awards for indirect expenses at some institutions exceed the amount given for direct expenses, and, (4) direct experience with paying for indirect expenses leads many Principal Investigators to have questions and suspicions that some type of hidden purpose or scam might be going on with the current system for using research grant funds to pay for indirect expenses.
With this brief background, we now must ask several very important questions! Why are only faculty scientists doing laboratory research being asked to obtain external funding to pay for their indirect expemses? Is this done simply because grants are available for scientific research, but funding programs supporting scholarly studies in many other disciplines are smaller and less available? Why are the indirect expenses for scholarly studies by many non-science faculty paid by institutional funds? Why are the indirect costs of faculty scientists doing laboratory research investigations not also being paid by the employing institutions? Where 2 different funded faculty scientists share a large laboratory room, does each grant provide support for only 50% of the indirect costs that would be awarded if there was only one occupant, or does each award pay for 100%? Quite frankly, the more questions one asks about this topic, the more new queries arise; true answers to these never-asked questions probably would be both very interesting and very distressing.
I will close by stating my own sincere conviction that something just does not make sense here! In several later essays, I will try to provide further insights and discussions about indirect costs, especially in the context of the current shortage of funding for research grants. These will include controversial proposals for useful changes in the present policies and practices for the payment of indirect costs.
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