Have you heard an administrator say 'we lose money on research?' That sentiment often irritates faculty members for at least two reasons. First, the use of the term "lose" implies that the purpose of doing research at a university, medical center, or research institute is to make money at it rather than because it is a key component of their reason for existence. Wouldn't the term "spend" be more appropriate? Second, it can sound like the implication is that they would rather be out of the research business because it is costing them so much money.
The American Associate of Medical Colleges (AAMC) recently released a short report that provides some insights into how the cost accounting to reach conclusions about these costs. These data are based on surveys of 46 academic medical centers. The bottom line conclusion is that a collection of academic medical centers spend 53 cents for every dollar of sponsored research support that they receive.
These four largest categories include unrecovered indirect (facilities and administrative) costs on sponsored research, facilities and administrative costs on research supported internally, salary support for research effort not supported by sponsored research, and the costs of start-up packages. Additional categories include bridge funding, costs for salaries over the salary cap, and cost sharing either voluntarily committed or volunteered by the institution.
It is estimated that these costs average $111,151,553 with a 95% confidence interval of $21,143,786 per medical school. I am not sure how to interpret this average (aside from the significant figure issues) since the direct cost support of the 46 schools participating the study ranged from $26 million to $751 million, but this does give some sense of the distribution.
Do these figures make sense? If you were in charge, how would you try to allocate these institutional resources?