Thread by @CohenAtTPPF

GOOD. This weekend my LinkedIn was melting down after the NIH made this announcement. Many outlets (such as this bad take by WaPo: (washingtonpost.com/health/2025/02…) allege that the federal government immediately turned off grant dollars to life-saving research. Not true at all. /1 x.com/NIH/status/188…

This style of alarmist journalism requires its reader to 1) have no clue how sponsored research works, and 2) hold the assumption that 100% of that funding goes directly to lifesaving interventions. /2

Let's keep this within NIH for this hypothetical. Universities (via their executive research offices) negotiate with HHS their maximum allowable "indirect" rate, the money taken by the university to keep the lights on. E.g., @UTAustin is 59%, @TAMU is 52.5%, etc. /3

So, using UT's 59%, if a project was granted $100,000, the University would be pocketing $59,000 to pay for admin and facilities, with $41,000 going to cover research staff, faculty time, expenses, services; basically everything needed to do the research. /4

More realistically, anticipating the 59% hit, if a PI thought a project needed $100,000 to actually execute, they would have to request ~$244,000, leaving them with $100,000 and the U with $144,000 in the proposal. /5

The problem with this arrangement is that there is no value check on the indirect money. Grant reviewers are seldom mandated to check for efficiency in project budgets, and there is no incentive for institutions to keep costs down (more $$$ = more prestige) /6

This arrangement has led to where we are today, with major universities taking 60-70% of every research dollar sent to the institution, money that never reaches the researcher or lab. /7

This NIH directive (and I pray DOJ and others follow suit) simply says that if the federal government is funding a study, 85% of that money needs to go to ACTUALLY PERFORMING THE RESEARCH AND PAYING RESEARCHERS, with not more than 15% used to keep the lights on. /8

Contrary to the fear-mongering headlines, this mandates that a much larger percentage of granted funds go to the proposed project, not less. Regarding the misleading WaPo, this means MORE money explicitly dedicated to funding biomedical research! /9

Private foundations, the other sponsor of university research, often cap their allowed indirect rates at 10%-15%. Why? Because as a private venture with a budget, they're acutely focused on supporting scientific progress, not buildings and administration. /10

And universities still gleefully take that money, even at that rate. Is it because they are charities or that private research is a loss leader? Nope, it's because they can make the numbers work, especially if the feds are bailing out the rest of the operation. /11

In sum, this means more money where the rubber meets the road, and less on admin. If that imperils the sponsored projects status quo, then universities need to a long look at that department's business model and the value that they provide to the field. /end

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