Funding Policies
Policies: Indirect Costs Policy
The James S. McDonnell Foundation does not pay indirect costs. Indirect cost recovery is the result of negotiations between the federal funding agencies and universities who carry out government-sponsored research. As described in a Rand report (URL provided below) The US Federal funding agencies have negotiated to cost share facilities and administration with Universities and private research institutes. Unlike other federal government contractors, Universities are not able to recover 100% of facility and administrative expenses because their mission of education, scholarly research, and public service overlaps to some extent with government sponsored research.
At the outset, the federal government provided research funds to universities on terms markedly different from those governing relations with industry. Whereas industrial firms were eligible for reimbursement of full audited costs, universities were permitted to recover only a fraction of their indirect costs. The theory was that since research was a regular function of universities, some of the university's own budget should go to the support of the research performed by its faculty, whatever the source of that support. The earliest NIH reimbursement rate for indirect costs was 8 percent. As federal subvention increased, however, the universities argued that they were in effect subsidizing government in ever larger degrees. In response, the regulations were changed to permit reimbursement of 20 percent of indirect costs and finally, in 1965, by act of Congress, the policy was changed to provide for a negotiated reimbursement of costs, but not full reimbursement. The principle adopted was that of "cost-sharing," a notion growing out of the original assumption that some of the charge for university research ought to be borne by the university.
http://www.rand.org/publications/MR/MR1135.1/MR1135.1.chap2.html
The James S. McDonnell Foundation is not a federal funding agency supporting “sponsored research”. Rather, JSMF grants assist Universities in successfully fulfilling their three-part mission (education, scholarly research, and public service) by supporting research that is an integral component of the activities of Universities. As such, JSMF is philanthropically alleviating a portion of the costs that would usually be borne totally by the University.