This document provides a comparative analysis of private foundation and federal government support for biomedical research, with a particular focus on the treatment of facilities and administrative (F&A) or indirect costs. While private foundations contribute only about 6 percent of overall U.S. academic research and development funding, in contrast to the federal government’s 55 percent, their impact is particularly significant in targeted or specialized research areas, often addressing diseases and conditions that may receive less federal attention. Private foundations, such as the Gates Foundation, typically offer greater budgetary flexibility, allowing certain facilities, administrative, and project support expenses to be included as direct costs, which are usually categorized as indirect by federal standards (e.g., NIH). This distinction is illustrated with sample budgets, showing that although the applied indirect cost rates differ—50 percent for NIH and 10 percent for the foundation—the actual share of total funding allocated to F&A and similar expenses is relatively comparable (approximately 25.7 percent for NIH and 21.7 percent for the foundation).
The document emphasizes that direct comparison between federal and foundation funding models can be misleading without recognizing their distinct funding priorities, allowable cost structures, and the nature of their research activities. For example, foundation-supported research may be based in resource-limited settings overseas and focus more on fieldwork, whereas federally funded projects often require extensive on-campus infrastructure. Furthermore, each foundation employs unique funding policies, and the proportion of funds devoted to F&A expenses can vary by grant. Thus, a nuanced approach that considers the methodologies and research contexts of each funding source is essential for an accurate assessment of their respective contributions to scientific advancement.
