Another Discussion About Teaching Versus Research That Ignores Overheads

I wish I was a Thought Leader so I could write thinkful and thoughty pieces that aren’t grounded in reality. Which brings us to this post by Clay Shirky about how professors, like it or not, are going to do more teaching more and less research. It’s…OH SWEET BABY INTELLIGENT DESIGNER, HAVE YOU EVER BALANCED A BUDGET, THINKY LEADER?

Here’s what Shirky doesn’t seem to realize–and I realize this is ‘science-centric’: if the research money goes away, universities lose many millions of dollars of overhead. While these can’t be used for anything the university wants (no more yachts, Stanford!), money is rather fungible, and ‘costs’ can be shuffled and inflated (we live in a country that has $676 saline IVs). It should go without needing to be said: no time for research, no research money. Here’s how it works (boldface added):

I’ve discussed overhead and fringe costs on grants before, so the short version is that on a federal grant, usually somewhere between 30-40% of the total grant award doesn’t go to the researcher for research costs (salaries, supplies, etc.), but to the institution. Now, some of that money is spent on actual administrative costs, but the rest goes to the university. So if the university spins off $50 million, or $100, or, in the case of the University of Iowa, $169,175,021 of NIH funding alone (never mind other government sources), that’s tens of millions of dollars that have to be recovered.

One option is a Magic Pony that craps platinum bars:
If you crapped bars of platinum, you would look like this too. You would not be happy.
(from here)

Meanwhile, on Planet Earth, you either have to raise tuition (or state taxes for public universities), or hope someone ponies up a huge honking endowment. I realize “huge honking” is a highly technical term, so to put some concrete numbers to this, if a university loses $15 million of indirect costs, it needs to raise $300 million of endowment ($15 million is a five percent annual payout).

In 2014–2015, the University of North Carolina, Chapel Hill (just that campus) received $477,315,721 from NIH, FDA, and CDC alone. This does not include NASA, NOAA, NSF, DOE, or the Department of Defense. The overheads from only NIH, FDA, and CDC funding are in the neighborhood of $150,000,000 per year. The University of Iowa received $193,709,887 from from NIH, FDA, and CDC alone, while the University of Michigan (the Ann Arbor campus only) received $482,777,467 (again, only from NIH, FDA, and CDC).

No administrator can walk away from this kind of money. For the University of Michigan, in 2014, student fees and tuition totaled $1,108 billion. $150 million–or even half of that–is a serious chunk of change.

I realize numbers are boring and not very Thoughtful at all, but, in the end, accounts must balance. The professor-as-researcher is here to stay–as long as she can bring in the grants….

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8 Responses to Another Discussion About Teaching Versus Research That Ignores Overheads

  1. Crprod says:

    Excellent discussion. When I worked at UNC, the actual admission of overhead funds was so complex and granular that it caused an IT coworker of mine to complain of a headache when the very word was mentioned.

  2. Reblogged this on The Grey Enigma.

  3. Contingent Cassandra says:

    The president of my university (who is not at all averse to research; in fact, he very strongly supports our R2’s longterm goal of becoming an R1) is very clear that funded research actually *costs* the university money (about 10%, I believe he said). In other words, the overhead from grants, large as it is, isn’t large enough to pay for the actual overhead of the grants (which I suspect includes the staff that support getting the grants and publicizing the effects of the research, so this number may be somewhat fungible, but still. . .).

    On the other hand, gen ed classes (especially in low-overhead fields such as the humanities, especially when taught by relatively low-paid faculty) do bring in more money than is necessary to support them. It’s not a huge amount of money by research-grant standards, but we’re still talking about net gain vs. net loss.

    Mind you, I’m all for research (funded or not) as a basic mission of the university. And I’m not necessarily agreeing with Shirky (among other things, I already teach a 4/4 load, and if my research-oriented colleagues’ load goes up, mine probably will as well, and I’m pretty much at my limit). And I haven’t got any citations to support this assertion — but I also don’t see any reason for my university president, or provosts (former and current) to be lying about this, nor do I have any reason to believe they’re not competent at either planning or reading budgets.

    I suspect the inconvenient truth is that both research and teaching are public goods that require significant support from the public, through direct support to institutions as well as through grants, tuition, etc.

  4. Rugosa says:

    Contingent –
    I’ve worked for a couple of research institutions, both university and hospital, as support staff. I have attended many meetings where we were told by higher-ups that the institution is losing money hand over fist. They lose money on research, teaching, patient care, administrative assistants, the cafeteria, and parking. It’s amazing that they stay in business, let alone that anyone would want the job of running the place. Apparently, the only thing that doesn’t cost money is the salaries of people in the big offices.

  5. Those last nine words. There’s the rub.

  6. anthrosciguy says:

    Research emanating from a university is also advertising, resulting in both more paying students and in endowments.

  7. Chris G says:

    Shirky is oriented towards undergraduates. It doesn’t appear to register with him that a core mission of research universities is to educate graduate students. If a professor has a research grant then educating grad students is part of their job. A modest fraction of grad student education takes place in the classroom but at a research university the vast majority of it happens via conducting research. Having professors engage with their grad students while they (students+professor) conduct research is central to the educational process. Make professors spend more time lecturing undergraduates and the active engagement component of educating grad students will suffer.

  8. If I were hiring newly-graduated science majors (i.e. BA/BS degree) and a given candidate didn’t have a glowing recommendation from a research adviser, that candidate would probably not be considered. This is partly because I know that college grades are not a reliable indicator of success.

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