The Council on Governmental Relations’ June 2014 executive summary, “Finances of Research Universities,” provides an analysis of the fiscal challenges facing major research institutions in the United States. The document emphasizes that both public and private research universities are confronted with constrained and shrinking revenue streams—particularly noting a substantial drop in state appropriations for public universities—and highlights how these financial challenges complicate the ability of universities to sustain or expand critical research programs. Moreover, it underscores the increasingly uncertain federal funding landscape, pointing out that federal contributions to university research have declined to their lowest proportion since the 1950s, thereby compelling universities to contribute more of their own funds, often exceeding $13 billion annually.
The summary further explains how federal limitations on reimbursement for research-related overhead costs (F&A rates) exacerbate these financial pressures, forcing universities to divert resources from other areas to subsidize research activities, potentially compromising their core missions and long-term strategic planning. The report concludes by stressing the importance of maintaining a robust and balanced partnership between the federal government and research universities to ensure the nation’s continued leadership in basic research, warning that ongoing financial uncertainty and funding imbalances threaten the productivity and sustainability of the research enterprise in the United States.
