Dear Friends,

Earlier this summer, Lynne attended a small meeting hosted by FasterCures on the topic of indirect rates paid by foundations to research institutions. This has historically been a challenging issue because foundations pay a much lower rate than the federal government. Although most academic institutions have a federally negotiated rate of over 30% and often much higher, public charities and private foundations usually pay a much smaller amount. Most Health Research Alliance members (an organization of non-profit medical research funders) pay about 10% while others do not allow for any indirect rates in their budgets.

Institutions incur real expenses to create the environment in which research is conducted such as facility maintenance and security, utilities, administrative staff, and ethics and safety reviews. (“Keeping the Lights On” in Nature, November 20, 2014 is an excellent article about this topic.) While government’s higher rates reflect its responsibility for establishing research as a public good, this isn’t part of most foundation’s mission. Hence, they are reluctant to pay higher rates.

Donaghue’s indirect rate has remained at 10% for a number of years. We recognize the complexity of issues involved in how research is paid for, and Donaghue will continue to work with the Health Research Alliance, FasterCures and others who are collaboratively addressing this topic.

Amy R. Lynch, JD
U.S. Trust, Bank of America, Trustee

Lynne Garner, PhD
President and Trustee

Click Here to view the 2016 Annual Report and the initial issue of the Donaghue Journal