Research: It’s Not About Prestige, But Money

In an otherwise excellent article about the failures of the U.S. collegiate educational system, Kevin Carey makes a common mistake: he assumes that the pressure to publish is primarily about prestige for the university. It’s not. It’s about revenue.
But I’m getting ahead of myself. Carey (boldface mine):

Universities like to pretend that great scholars make great instructors, but one indifferent, outdated lecture from a tenured professor is enough to conclude otherwise. Because scholarly outcomes are visible, in the form of publications and citations, while teaching outcomes are currently not, colleges privilege the former above the latter. Tenure-track professors are routinely discouraged from spending too much time teaching, lest students distract from the mandate to publish. Legitimate evaluations of professorial teaching skill are practically unknown.

What this ignores is overhead on grants. I’ve discussed overhead before:

Overhead, also referred to as indirect costs, are a surcharge on the direct or actual costs* of the grant. More people on a grant and more research costs mean more ‘indirects’ for the institution. Typically, these indirects run 50-75% of direct costs. Personnel are a particularly good way to run up indirect costs**, since you can not only charge on the salary but on an additional 16% which pays for Social Security and FICA (and some places add on more than 16%–these costs are often referred to as fringe).

A certain amount of indirects is needed: all institutions have administrative and infrastructure costs (e.g., personnel, IT, utilities, and so on). But 50%-75% is exorbitant (and, incidentally, reduces the total number of awards federal agencies can give. Federal granting agencies subsidize higher education to the tune of billions of dollars every year***). At smaller colleges, a large federal grant can underwrite much of a department, and at larger universities, science departments are often ‘profit generating centers.’****

To put this in context, a professor (and it’s telling that, within administrative circles, they are often referred to as ‘PIs’–principal investigators–and not by an educational title) who brings in a single modular R01 NIH grant ($250,000 per year) is also bringing in $100,000 of extra money, much of which goes straight to the university (to the chagrin of faculty who want it to remain in the department). Faculty who bring in more money, and $500,000 – $1,000,000 per year in some departments is not unusual, are free money for the university.

Even in disciplines that aren’t flush with money, administrators would prefer faculty that bring in grants: why have a history professor who brings in no overhead, when you can have one that brings in $10,000 per year?

I’m always amazed that when colleges are discussed, this never comes up. As I mentioned earlier, I’m not telling most ScienceBlogs readers something they don’t already know (or, in fact, are intricately familiar with). Many science departments are unhappy with the amount of overhead siphoned off to the general fund (whether justified or not). This is not a secret. If you want to reform teaching at universities, and if you think there’s a tradeoff between teaching and research, then you have to follow the money.

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8 Responses to Research: It’s Not About Prestige, But Money

  1. Don’t forget that this is primarily an American problem. Universities in other countries get little or no financial contribution from their researcher’s successful grants.
    Most scientists want to publish their results because that’s what science is – discovery and communication. If the validity of your ‘results’ hasn’t been confirmed by peer review, and your ‘results’ aren’t available for other scientists to read, then you haven’t really accomplished any science.
    And most scientists aren’t tempted to neglect their teaching because their money-hungry institution wants them to get more grants. Instead we’re tempted because research is more fun than teaching – we value our own learning more than we value the learning of our students.

  2. Moopheus says:

    “Most scientists want to publish their results because that’s what science is – discovery and communication.”
    Yes, that’s true–scientists still care about the science. The problem is that university administrators care about the money. My wife works at a local well-known university, and her group not only has to pay overhead, but some IT services and utility charges are extra. It seems that overhead mainly pays for the administrators that collect the overhead.

  3. Morgan Price says:

    It can be the other way round — sometimes tuition is used to subsidize startup packages so that more prestigious faculty can be hired. Most of the startup packages are ultimately paid back from the overhead, but it’s not enough.

  4. A says:

    The overhead problem is widely unknown by most people, even (at least beginning) graduate students. When people hear, ‘[famous university] announces [important research finding]’,most people even assume that [famous university] funded this research itself, and completely ignore that it was most often a government grant which made this research possible.
    I’d think that at major research universities in the hard sciences, the overhead raised by a professor should be a multiple of the salary, and when someone’s grant support goes away, he’d get a visit from his department chair, pointing out the benefits of alternate careers, or excessive teaching loads.

  5. Lyle says:

    Just a sign that universities are money grubbing institutions, else why solicit graduates for money. Look at how many business schools have been renamed for a contribution. We also have professorships, buildings, conference rooms and lecture halls named. I will plead guilty of donating a decent amount to my undergrad institution, but not in the buy a name for something class. Note that in the past one university (Purdue) sold its name for a contribution from John Purdue, as well as numberous private universities. I suspect that if one walked up to a university president with 10 billion, but said rename the institution to Joe Schmo Univ. The answer would be where do I sign.

  6. Craig Heinke says:

    @A; typically we’re not bringing in *that* much, unless we lead a major (say, NIH) project with multiple Ph.D. researchers–an average professor at a research university gets enough external funding to pay their summer salary and a grad student or two. (Another point not yet mentioned; salaries for US professors depend on continued external funding, else your salary drops by a quarter.) More common is the reverse of your scenario; a professor at a less famous university who brings in a major grant gets some teaching relief.
    I appreciate my current (Canadian) position, where overheads are unknown; since Canada runs all the universities, why play a shell game with the money. I suspect that Canada saves a lot of money by simply giving grants to researchers, and money for infrastructure to universities, without all the bureaucracy of overheads.

  7. echidna says:

    And Craig Heinke explains it well.
    A well-run government system has lower losses due to overheads and profiteering.

  8. antipodean says:

    Overhead that the university steals from researchers is actually higher in the antipodean countries than in the US.
    One university that shall remain nameless was running at about 115%.
    My understanding is that UK universities also do this so I thik your situation in Canada may be the exception rather than the rule, at least in the English speaking countries

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