The NY Times discusses one of the recent Trump Orders, namely forcing Universities to reduce the R&D overhead to 15%. They note:
The change is aimed at reducing the amount of tax dollars that universities spend on overhead costs. The National Institutes of Health, which announced the move Friday evening, said $9 billion of $35 billion — or about 26 percent — of grant dollars distributed last year had gone to overhead. The new policy, which takes effect on Monday, will cap “indirect funds” for costs like buildings, utilities and support staff at 15 percent and is aimed at saving $4 billion.
Back when I was at MIT, the overhead often reached 70%! Now it depends on how you count of course. If you can include salaries and benefits, materials, rent, etc, the 15% is then for anything above and beyond what the research costs. Namely the research is paid for but the "goodies" above that are not. Thus DEI Divisions such as that at MIT would take a massive cut. So should all the other indirect overhead. Sports teams are typically covered by tuition but as they explode in breath it gets pushed into overhead. In 1971 MIT had no varsity teams. The intramural football team played local High Schools. Now however they have tons and they are costly. Have these improved MIT research? Hardly.
The solution is simple. Namely line item costs are included such as maintenance and upkeep. DEI etc costs get pushed to the 15% number. The devil is in the details. Take a breath and think of what you are doing. Change can be upsetting but sometimes it helps.
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