The Great Partnership: How Universities, Researchers, and the Public Improve the World

Posted July 18, 2017 by Jay Walsh

In a simplified view of life, two kinds of problems exist: those that can be solved and those for which we have no easy good solutions. Society has many more options to tackle the former; researchers, on the other hand, take on the latter challenges and in doing so transform the world.

Most of us agree on this, at least: research can provide tangible breakthroughs that make life better for vast numbers of people around the globe. A remarkable partnership drives this progress. It’s a parternship among the public, which provides the funding for research and encouragement to discover new knowledge; research institutions, which develop an infrastructure – buildings, libraries, IT, networks of world-class thinkers – so that new discoveries can thrive; and researchers, who devote their lives to creating innovation through ideas.

More of us are living longer, healthier, and happier lives thanks to advances in biomedicine, chemistry, and materials science, or because of innovations in sustainable energy production, plant science, and digital technology. Much of the research fueling these improvements occurs on university campuses and in conjunction with federal support from the National Institutes of Health (NIH), the National Science Foundation (NSF), and other federal funding agencies. I’ve previously shared my perspective about the enormous social value of such discovery.

Where people sometimes disagree is on how to pay for all this progress. Some of that disagreement may stem from misunderstandings about how university research happens, and about the kinds of things that need funding to ensure that innovation thrives.

Frankly, great research does not come easy. Creating new knowledge is expensive and time-consuming, but the outcomes can be life-changing. Today’s transformative research — both basic and applied — is complex and costly, involving high-end instrumentation, facilities, and infrastructure that must be maintained and enhanced. This work demands exceptional faculty and administrative expertise to get the most return on the research investment. In other words, there are both direct and indirect costs associated with this science.

Direct costs are those that can be specifically identified with a particular sponsored research project, according to Uniform Guidance, produced by the Office of Management and Budget (OMB), the federal entity tasked with overseeing the Executive Branch’s policy and budget vision. Indirect costs are the wide-ranging facilities and administrative (F&A) expenses that also make discovery possible. Indirect support is vital to universities, especially since direct federal investment does not come close to covering all of the overhead associated with university research. Lab equipment may be one obvious tangible expense, but there are many other indirect costs, including operations and maintenance, utilities, safety training, hazardous waste removal, libraries, and more. (See infographic.)

Since World War II, the US government has supported university research. It made sense to do so because that research helped win the war and, later, would enable Americans to establish a higher standard of living as a result of technological advances. By 1947, the Office of Naval Research, in collaboration with universities, began to formalize the funding process. Over time, these negotiations became codified, and included consideration of direct and indirect research costs. Historically, the federal government has reimbursed universities for F&A costs at a negotiated rate. That rate has fluctuated and varies widely from institution to institution, but over the past two decades F&A costs recovered by research institutions have remained flat, averaging about 28 percent of the total amount of a grant, according to data from the Council on Governmental Relations (COGR). This consistency has occurred despite increases in federal regulations and reporting requirements that result in additional compliance efforts.

Now, some in the federal government are proposing to cap F&A at 10 percent, a move that would have serious implications for research universities and — most importantly — for society.  Such a change would dramatically alter the partnership among the public, universities, and researchers.

Let’s be clear: federal funding is very important for the University. It is the largest single source of revenue, accounting for about 28 percent of Northwestern’s total budget. Any cut to F&A would hinder the overall research enterprise and stunt potential discoveries. At the same time, federal support has always been part of a larger portfolio of funding — including the philanthropy of our private donors and returns from our institutional endowment. Federal funding also comes with stipulations and limitations. For example, in many instances, the amount of salary funds that we can use to support faculty on an NSF or NIH grant is limited; the rest of the salary provided for NIH- or NSF-sponsored research is paid from Northwestern’s institutional funds.

Northwestern has always viewed its relationship with federal sponsors as an important partnership, one with a shared goal of making extraordinary discovery possible. As partners, we have many of the same aims, including creating knowledge that strengthens the economy, enhances national security, and improves the overall quality of life for our citizens.

To hold up our end of the bargain, Northwestern continuously strives to enhance the scope, rigor, and societal impact of its research. We remain dedicated to our core research and teaching mission, which is why we look to our federal partners to sustain their funding of university-based research, a major driver of the US economy.

The investment in research is the wise choice for today and tomorrow.

Jay Walsh is Northwestern University’s vice president for research.