Indicator 10.2.5Research indirect cost recovery by source, Universitywide, 1997-98 to 2009-10
Budgets for externally funded research projects include both a direct cost component — the actual amount of salaries, benefits, equipment and materials needed to conduct the project — plus an overhead percentage to cover the facilities and administration required to house and support the research project. These overhead activities are the "indirect costs" of research.
The "indirect costs" of research are substantial, and typically much higher than the rate that research sponsors are willing to pay to UC, or to other research universities, for that matter. They also vary among research sponsors that negotiate their indirect cost recovery rates separately with UC (again as with other universities). Rates negotiated with federal agencies are among the highest, but still estimated at between 5 and 18 percentage points below the true indirect costs of conducting research. Most nonfederal research sponsors, including corporations, non-profit organizations and the state of California, have policies that limit indirect cost recovery to well below federal rates. For these and other reasons the UC Commission on the Future set an annual goal of $300 million in additional indirect cost recovery.
