When I am considering supporting any organization, one of the first things I want to know is what their overhead percentage is. In other words, for every dollar I donate, how much is going to the actual work that organization does and how much is paying for mail, computers and the Director’s salary. There is huge market pressure to get these overhead costs as low as possible in every non-profit organization out there. If I get an answer back from a charity that says they are “wasting” more than 20-25% of my donation on overhead, I walk away. Lots of people do.
Our government does not have the same sense of fiscal responsibility that we as individuals do. The federal and state governments frequently sponsor research at universities. This is a very good thing. Universities have something called indirect costs, which they deduct from incoming grants (grants less than 20-25K are usually immune). Indirect costs are the same thing as overhead. This is money the tax payers are donating for scientific research in the form of grants that never actually goes to research. Indirect Costs are not new. They were an issue in the 80s when I was in grad school, and probably before that. Time magazine even wrote an expose on indirect costs back in 1991. If the indirect costs were reasonable, I would have no complaint. Every group has to pay some basic bills. But the indirect costs at universities ranges from 50-70%!!
That means if a brilliant researcher is donated 1 million dollars by the tax payers in the form of an NSF grant, he will actually receive only a half a million dollars or less. This is NOT the sort of organization I would normally donate money to. Agencies can refuse to pay indirect costs, and most universities have policies in place for how to deal with this. ( you can see an example for the University of California).
In this time of fiscal trouble, it seems wrong to me that our tax dollars are willingly being donated not to the source we thought they were, but to pay the 150-400K salaries of deans and others at Universities.
If we agree as a nation that we need to subsidize Public Institutions of Higher Education, I am in agreement with that- and we do. But there needs to be transparency in how and where that money is being spent.
If universities are facing increasing deficits because of decreasing enrollment and higher costs, they should be getting creative about cost cutting and savings, not sitting down and negotiating higher Indirect Cost rates with Federal funding agencies, like many recently have. Scientific research and innovation are the things that will continue to make us strong- the government should be looking for ways to funnel more money in that direction, not less.