The June 2014 report “Finances of Research Universities,” prepared by the Council on Governmental Relations (COGR), analyzes the evolving financial environment of research-intensive universities in the United States. The report provides a comprehensive overview of the key revenue sources and expenditures of these institutions, emphasizing the increasing pressure on non-state funding streams such as federal research grants, tuition, and private gifts, particularly as state appropriations for public universities continue to decline. The analysis demonstrates that both public and private research universities now depend similarly on net tuition revenues and federally sourced research funding, with state appropriations playing a diminished yet still significant role primarily for public universities. Expenditure patterns are generally consistent across both sectors, with a large share committed to instruction, research, and public service, highlighting the core missions of these institutions.
A critical component of the report is its in-depth discussion of research funding and cost recovery mechanisms, particularly the challenges related to reimbursement of facilities and administrative (F&A, or indirect) costs by federal and other sponsors. The report documents persistent shortfalls in F&A cost recovery, caused by caps on allowable reimbursement and sponsor policies, which require universities to subsidize a substantial share of research through institutional funds—an obligation that has increased over time and now constitutes a notable portion of total research expenditures. This growing institutional contribution raises sustainability concerns, as further increases could jeopardize universities’ capacity to maintain research infrastructure and compliance capabilities. The report concludes by underscoring the fragility of the government-university partnership, especially in the face of volatile economic conditions and uncertain federal funding, and stresses the need for renewed dialogue and policy reforms to ensure equitable cost-sharing and sustained U.S. leadership in research and innovation.
