https://www.city-journal.org/article/nih-university-funding-research-budgets-indirect-costs
It seems like just yesterday that medical institutions were touting their antiracism efforts. In October 2020, the American Association of Medical Colleges published “Framework for Addressing and Eliminating Racism at the AAMC, in Academic Medicine, and Beyond.” The publication calls for “individual self-reflection on systemic racism,” “anti-racism efforts within the AAMC,” “anti-racism efforts within the academic medical community,” and “anti-racism efforts within the broader community.” In 2021, the David Geffen School of Medicine at UCLA launched an initiative called “Anti-Racist Transformation in Medical Education.” The initiative aims to “mitigate racism in the learning and work environment of medical schools through a formal management change process.” In January 2023, an antiracism committee at the University of Pennsylvania Perelman School of Medicine offered a Facing Microaggressions in the Workplace training, part of the school’s Action for Cultural Transformation. ACT aims to eliminate “structural injustice across Penn Medicine”; it is overseen by the medical school’s vice chairs for Inclusion, Diversity, and Equity.
Now the University of Pennsylvania, the University of California, and the AAMC are telling a different tale about science and medicine. These fields are unqualified civilizational triumphs, they say, jeopardized not by racism but by MAGA ignorance. What changed?
On February 7, 2025, the National Institutes of Health, the nation’s biggest funder of biomedical research, declared that henceforth it was limiting the amount that it would pay universities for the indirect costs of NIH-funded science. Indirect costs (also known as overhead, or facilities & administration) might include the salaries of administrators across the university, campus-wide building and equipment maintenance and depreciation, utilities across the university, janitorial services, and general office equipment. Direct costs, by contrast, are grant-specific, covering particular researchers’ salaries, lab materials, animal specimens, cell lines, and the like.
Previously, the NIH was adding up to 69 percent of a research grant to cover the facilities & administration infrastructure that allegedly undergirded subsidized research. For every dollar that a university received to support a particular project, NIH would throw in as much as an additional 69 cents for indirect costs, say, bringing the total amount of the grant to $1.69. The NIH negotiated indirect cost rates individually for each university in a complex, resource-consumptive process; after a university’s rate was determined, that rate applied for the next three to four years to every NIH research grant that that particular university might receive, as well as to grants from other federal agencies.