NIH reduced indirects from 60+% to 15%: 10 things you should know

Implications of Friday's 'enjoy your weekend' announcement

You might not realize that when the National Institutes of Health gives out grants, it also pays the institution getting the grant with “indirects”, which can be used for any purpose. That means if 100 dollars is paid to the individual grant recipient, 60 dollars or more may be paid to the university. For some facilities it is 90 (see links below). This is obviously money that can’t be spent on more grants.

On Friday, the NIH announced it will cap this at 15%.

You would think scientists would say “Great, less money given to my boss and more money given to me!” But few are delighted.

I want to make 10 points

1. The NIH is now in line with many philanthropic associations that cap indirects at 10-15%. See below. This is widely considered acceptable by universities.

   

2. This will dramatically change academic incentives. Many universities have an unspoken rule that you cannot become associate or full professor without NIH funding. They claim that this rule exists because NIH funding means your work has passed the highest hurdle— acceptance by peers—but that was always a bad argument. If you publish papers, you have acceptance by peers. Instead, admin made this rule because it enriches them.

3. The university has become a bloated bureaucracy. Redundant admin, and excessive administrative hurdles to do research. Because money is fungible, this exists because of indirects. This will force universities to fire many unessential personnel. We need to make less paperwork to open trials. This might even improve research, as we strive for efficiency.

4. Indirect costs are taxpayer money that vanishes. The NIH states, “Indirect costs are, by their very nature, “not readily assignable to the cost objectives specifically benefitted” and are therefore difficult for NIH to oversee.” We don’t know what they money is spent on, but, because money is fungible, indeed some of it is spent on things that Americas disagree with: mandatory DEI training classes and modules and other programs of this nature. Some of it is spent on alcohol at social events, business class international travel, and lavish retreats. That’s the nature of money. How do you justify taxing the plumber to pay for you to fly Business class to Singapore?

5. At first, I believed that the NIH should have made this change more slowly. Turned the indirects down year by year, but with a little more reflection, I think the shock and awe approach has some virtue. It will scare universities to immediately work to lower their administrative costs. If they turned it down slowly, changes may not occur.

6. Does NIH research lead to cures? Absolutely. Some claim that less indirects will reduce discoveries. There is no evidence to support this claim. And, of course, NIH discoveries sometimes lead to medical advances. But the question is whether money is optimally spent. I can spend a million dollars and grow 1 grain of rice, but that is not efficient. I should be able to grow 10 tons. The NIH is spending 47 billion dollars for 5 grains of rice, and 2000 DEI training seminars. (That’s a joke, but you get my point).

7. Universities never took their NIH indirects and tried to make research reproducible. If universities, really cared about veritas, they could have used some of these funds to advance reproducibility— making sure published experiments are able to be replicated. If an experiment cannot be replicated, you did not learn anything true or enduring about the universe. Universities have not made substantive efforts to tackle this problem— which means, they largely don’t care about veritas. They are happy with the status quo. That’s why I said this:

8. 15% is a starting point for debate. Perhaps it could be negotiated to 25% or something a little less immediately painful. But sometimes you have to open with a strong gambit.

9. Universities will no longer shield faculty with NIH grants who face disciplinary complaints. It is well known that Universities ignore or downplay harassment and abuse if the person doing it is a well funded NIH researcher— again because they don’t want to lose the indirects. Now this will change that. It will make faculty more accountable.

10. Cutting indirects might even mean more science. Less money spent on the administration is more money to give out to actual scientists. I am shocked to see researchers crying about how much money the university gets— it means more grants can be given per cycle.

Additional reading for subscribers…