Flypaper financing: The sticky world of research overheads and indirect costs

As a child, I was always a little grossed-out by flypaper. They were like sticky streamers of death hanging from the ceiling; anything that touched them was lost forever, including the eponymous fly.

Indirect costs, also referred to as “indirects” or overheads, are the flypaper of global health research funding.

Indirects reflect the money from a grant that is caught by the Finance Department before it is made available to the researcher. The money keeps the organisation going: the lights stay on, the rent is paid, the cleaners and security guards turn up, and the management services work.

If a researcher wins a $100,000 grant, after the financial flypaper has caught the indirects, she might receive $80,000. Those who do not come from the worlds of research or global health and development may be slightly appalled by this 25% overhead. Some research funders are. They see the indirect costs as a kind of sleazy tax on the worthwhile research they are supporting. Other funders are reluctant to pay indirect costs or will only pay at a significantly reduced rate, such as 8%. I should also add that there are funders that are fully aware of the issues, and will pay the indirect costs with little or no complaint.

I understand why some funders don’t like the indirect costs. They want to achieve the most significant impact possible for every dollar spent, and this means they want as much of their money to go into doing the research itself and as little money as possible going into general organisational support. Of course, they also want great researchers, good research infrastructure, and appropriate governance and compliance mechanisms. And herein lies the funder-research paradox. There is an obvious relationship between strong research organisations and strong research. Strong research organisations are strong because they have good governance, financial oversight, HR policies and procedures, procurement processes that are transparent, fair, and competitive, decent infrastructure, access to library services, and they also invest in their staff. Continuous professional development of the scientific and non-scientific staff is crucial for the development of strong research organisations. All that (infrastructure, processes and staff development) costs money above and beyond the cost of doing the research itself — and it costs more money than one might think.

Funders need to recognise indirect costs as part of their achievement, not a hindrance to it. Through their funding, they support research and research organisations.

The failure to pay reasonable indirect costs, in effect, forces a form of cross-subsidisation. I know of one university that encouraged staff not to apply for nationally competitive grants because too little was paid by the funder for indirect costs. For every grant that was won, the university ended up having to subsidise the research by picking up the indirect costs. Any research organisation that does that for too long will find itself bankrupt. That was in the Global North.

The situation is different, and in some ways worse, in the Global South research organisations. If the research organisation is essentially regarded by the (usually Global North) funder as a data manufacturer (sample collector) and not an intellectual contributor to the science, there is a greater reluctance for indirect costs to be paid. This recalls the theme of “trickle-down science” that I have discussed in another post.

Having argued, however, about the necessity for indirect costs for research organisations to survive and develop, there can be a darker side to indirect costs. It is the daisy chain of financial flypaper — reminiscent of a recent story I read of a botched assassination in China. A hitman subcontracted an assassination to a colleague, who subcontracted the assassination to another colleague… Five assassins were in the daisy chain and each one took money off the top, before passing on the residual. In global health and development, the financial daisy chain can be seen in large contracts awarded to management companies that skim money off the top as indirect costs, and hand on the residual…

Multilateral agencies can do this with sub-awards. They receive a grant from, say the Gates Foundation, they’ll take out the indirect costs and pass on the residual to an implementing agency — often cautioning them not to overcharge indirect costs. It can also arise from the use of sub-awards offered by research organisations. I have even heard about organisations taking indirect costs from a grant and then a management fee associated with a sub-award before passing it on to the sub-awardee, which will need to remove indirect costs before passing on the residual to the researcher. This can even happen within the same organisation. I win a large grant. The organisation takes out indirect costs. When I pass on a sub-award to a colleague, like a hitman, I take out my management fee first.

Let me say it again, funders need to recognise indirect costs as part of their achievement, not a hindrance to it. Research organisations, however, need to be clear about which part of an award should truly carry an indirect cost and which parts should not.

Conflicts of interest in research leadership (Part II)

(The fond farewell. When enough is enough)

When I started my research career, a research leader’s retirement was a moment to celebrate. Their lives and their contributions were recalled through their research, their papers, their PhD graduates and Postdocs. The Festschrift was often published, literally celebrating their intellectual contribution to a field. Some of those researchers truly retired. Many took honorary appointments that gave them a desk or space in their old laboratory, and access to the library and email. They might mentor junior staff or be a part of a PhD student’s supervisory team. Many continued to do fabulous, original research. Others became the departmental raconteur, recalling embarrassing stories of now senior departmental researchers who were once their postdocs. The retired research leaders were appreciated but no longer had a formal role in the organisational structure.

My experience today with research leaders approaching an age that would, before, have been the time to retire — the time that I am beginning to see on my horizon — is somewhat different. The game now is one of holding back the younger researchers, and hanging on, limpet-like, to substantive position for as long as possible. It is cast as an age discrimination issue. If I am capable, and I am performing at a high level, then my age should not be a barrier to my continued leadership role. Indeed, I have vastly more experience than junior colleagues, and it would be perverse to choose them over me.

While it is true, age need not be a barrier to the capable performance of one’s duties, it is also true that senior positions are rare, and if they are held by an increasingly ageing leadership, how will we train and develop younger cadres of leaders? Turning over leadership refreshes ideas and organisations.

I recall a radio interviewer with a well known Australian clinical researcher. He recounted how, as a junior researcher, his supervisor put him down as the first author on a significant scientific paper — a career launcher. He had not earned the spot, but the supervisor saw his potential and also recognised his capacity to influence the trajectory of a promising career. Without debating the ethics of that particular decision — it was a different time — there is little doubt that the paper launched one of Australia’s great scientific careers. Forty-plus years after those events, I have seen very capable, senior research leaders forsake their leadership role in favour of hanging on to power. They do not surround themselves with bright, eager, up-and-comers. They do not mentor and position their staff to take over. Instead, they retain non-threatening doers, many of whom will not even appear in the acknowledgements of their scientific papers.

In a post I wrote a little over a year ago I observed that in the interests of gender fairness, men had to be prepared to relinquish power. I have a similar view of intergenerational fairness. Those research leaders among us who were born in a twenty-year, golden age between about 1945 and 1965 have been extraordinarily lucky with the opportunities that we have had. In the interests of fairness and, frankly, in the interests of science, we need to know when to step away. We can still be a part of an exciting research agenda; maybe we do not need to be seen to lead it.

Perhaps the last act of truly great research leaders is to step back.

A literary bibelot

Within a minute I swung from apoplectic to flummoxed. My erudition had been called into question with an unkind gibe. A friend — truth be told, an impious ragamuffin — started this small, mental kerfuffle by suggesting I would not be able to use a set of 21 words in a single blog post. Was this louse, this piebald swiller serious, or was it waggish humour? Apparently, he was serious. There was no playfulness here.

I confess the challenge did give me the collywobbles. Could I obfuscate? Could I substitute an alternative, thesaurus challenging vocabulary and get away with it? Perhaps there was a set of lexical dregs or suppositious words to hornswoggle the reader. I had it …. a story laden with sesquipedalian, polysyllabic nonsense.

“The mountains ached for the moon to rise and break the thick, tenebrous night. The canvas of a small ketch caught the zephyr wind to pull it across the ….”

Ugh! Jabber! I had macerated this nubbin long enough. If I wasn’t careful I would choke on the challenge, and no wine to quaff. On the other hand, there would be a simple joy in succeeding. With an exuberant ululation from the balcony, I would announce my victory to the world, and he (he who had created this casus belli) would withdraw — vamoose — tail between the moose’s legs.

There was one small problem. Yenta. As in, “she’s such a Yenta”; a person, especially a woman, who is a busybody or gossip. It was a little too xenophobic for my taste, not to mention misogynistic. What to do? I could not meet the challenge. Hubris won. Who was the moose now?

Staff who want to leave

Learning from a member of staff that she wants to leave can feel surprisingly hurtful. It can be particularly upsetting when he wants to stay within the organisation, just not in your unit.

As bosses, we very often spend far more time with our staff than we do with our own family or friends. We invest time and resources in their development. They become a part of our lives and our plans. When they announce their intention to leave, it can feel like rejection.

I thought you liked it here. You can’t leave now, I’ve invested too much in you. Your the only person who can… And finally, “How ungrateful!!!!”

I have been that person who my boss cursed for leaving, and I have been that boss who cursed (silently) the person who wanted to leave. I have also seen colleagues abuse, belittle and try to destroy the careers of staff who want to leave. No surprise really, with a boss like that, that a person wouldn’t want to stay. Pathological behaviour by a boss in one quarter portends pathology in other quarters.

The most relevant advice I ever received about leaving was from Steve Schwartz, former vice-chancellor or Murdoch, Brunel, and Macquarie Universities. “You have to remember, Daniel”, he said, “the person most interested in advancing your career is you.”

And that is the heart of it. As bosses, we do not act solely with the best interests of our staff in mind. Sure, we are not indifferent to their welfare but that is not the raison d’être of the workplace. When we engage them, challenge them, mentor them, and develop them, it is at least in part because we hope to have smarter more engaged and more productive staff in return.

Inevitably, of your good staff, some will stay and some will leave. If your sensible, you were already a part of the discussions about long term career planning and you had plenty of warning– maybe not in detail, but at least in direction. When the time comes and they want to leave, do not curse them (outwardly). Congratulate them on their new opportunity and wish them well. If there is some outstanding work that desperately needs their skills to complete, you may be able to negotiate a better departure date. Do not try and bully them into staying. When staff cannot leave, it is not employment, it is servitude.