How Much Research Really Costs? Look at That New Building (Or Whatever) To See

Most people are not aware that research universities negotiate an “overhead rate” with the government.  The simplest way to understand that is this example.

Professor X gets a $1,000,000 grant.  The grant pays her salary and benefits, and the salary for others.  Her summer salary (which she would normally not get) would be paid, even though she will probably do research in the summer, anyway.  There will be expenses for travel, etc…

Now for the Overhead Rate.  If the university’s negotiated overhear rate is 50% (just average) they will receive another $500,000 to do just about anything they want, like put up a new administrative building, etc…

Question 1:  Does Prof. X get a better salary and perks when she brings in big grants? Does the university care how she gets it?

Question 2:  Does Professor X want to spend time teaching well if it requires struggling with administrators – or, at the very least, no support from them – or does Prof. X want to spend time on research, even if she would love to teach well?

Here is a good description.

Harvard, MIT thwart effort to cap overhead payments – News Nation – Boston.com.