Academic Funding on Fire

Posted 5/17/2025

I’m now a postdoc involved in applying for research funding, and have more insight into the process than I did as a graduate student. Given horrifying cuts to funding throughout academia, I wanted to share my perspective with non-academic readers.

Where Does Research Funding Come From?

In corporate research and development, funding comes from the business’ revenue or investors and is driven by product development. In academia, things are a little more varied. Academic funding typically comes from government grants, philanthropists, and corporate partnerships.

Government grants come from agencies like the National Science Foundation (NSF), National Institutes for Health (NIH), Department of Energy (DoE), Department of Defense (DoD), and so on. Each agency has a broad mandate, issues calls for projects on topics within their mandate, and awards money to project proposals they find promising.

Philanthropists include the Gates Foundation, the Chan-Zuckerberg Initiative, the Sloan Foundation, and other charitable groups. These groups often have much narrower mandates than their federal counterparts - for example, the National Science Foundation funds fundamental research and education that they hope will lay the groundwork for future applied studies, while philanthropic charities are likely to fund more immediately applied work related to eradicating disease or other topics of interest.

Corporate partnerships are often narrower and more directly applied than even philanthropic funding. For example, Google funded some of my research into the longevity of open source software. Many Google products are built upon open source software, and they want to be confident that those building blocks are being actively maintained and aren’t likely to be abandoned due to lack of funding or founder burnout. Clear utility to them, of interest to us, win-win.

While the prominence of funding sources varies between fields, in most disciplines the vast majority of funding comes from government grants.

What do Grants Look Like?

Scientists apply for grants by proposing a project or series of projects under an advertised call for proposals. Along with the description of the research and an argument for why it’s valuable, each grant has a budget including:

  • Salaries for professors, postdocs, graduate students, and other research staff working on the project

  • Equipment (computers, software, fancy microscopes, you name it)

  • Travel and publishing costs (for fieldwork, attending conferences, open-access publication fees, and so on)

Once research staff have their salaries covered by a grant, they may work on additional projects without funding. This is entirely normal for letting students explore their own interests, and helps with future grant funding. Scientists often apply for grants to support projects they started unpaid, using their preliminary results to justify funding and allocating more resources to the work. In this way scientists are always a little out of sync, using existing grant funding to support both the grant’s work and the groundwork for the next grant.

Indirect Costs

Before the scientists apply for a grant, the university amends the budget to add indirect costs. This overhead covers expenses that support all research indirectly but don’t fit neatly into an individual research budget. For example, building maintenance, and covering human resources, accountants, janitorial staff, electricity, and so on. These indirect costs vary between universities, but often exceed 50% - meaning half the grant money awarded will go to the university rather than the specific research project.

Philanthropists often put strict limits on indirect costs, frequently 15%. If your mission is to eradicate Ebola, you don’t want to report back to Bill and Melinda Gates that half your budget went to university administrators and libraries. This puts universities in an awkward position - they need those indirect costs to cover operations, but don’t want to turn down free money from a private foundation. The typical compromise is to use indirect costs from federal grants to cover the university’s overhead needs, then take what they can get from the philanthropists.

It’s all Burning Down

The Trump administration has frozen (then unfrozen, then refrozen, then-) grant awards from the National Institutes for Health and the National Science Foundation. They’ve cut countless existing grants, retracting already awarded funding mid-project.

Academics are pivoting from federal funding to philanthropy and corporate partnerships, but this presents two problems: first, there isn’t nearly enough private funding to replace federal shortfalls, and second, these grants often have the aforementioned 15% indirect cost cap, and so provide much less money to universities.

More recently, Republicans in Congress proposed capping federal grant indirect costs at 15% under the argument that universities clearly get by on low indirect costs from charities, so why can’t they do the same with government grants? This of course misses that government grant overheads have been supplementing charity grants, and so capping federal indirect costs would be devastating.

In any case, the academic funding situation is dire. Even if these policies were all reversed tomorrow, there’s a long lead time on starting new studies, hiring scientists, and some research (especially medical studies) can’t just be paused and restarted with fluctuating funding. Add to that all the scientists leaving the United States to seek more reliable work elsewhere, and American academia is committed to a downward spiral for quite a while.