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Crazy claims about faculty productivity are bouncing around like ping pong balls.  Public research universities in Texas are getting more than their fair share of attention from agenda-driven politicians because their professors are not spending enough time in class.  They’ve even invented a classification system based on this one-dimensional view of academic life:

  • dodgers
  • coasters
  • Sherpa
  • pioneers
  • stars

I don’t think I’d want to be a coaster, but to be honest, I wouldn’t want to be a Sherpa, either.

CCAP’s Richard Vedder has looked at the same data through a conservative economic lens and concluded that significant costs savings can be found by adjusting teaching loads — upwards, of course. Like CCAP I think there needs to be more emphasis on undergraduates, but just lopping off a part of an institutional mission is not the way to do it.  Unless, of course, you are of the opinion that everything outside the classroom is overrated in American universities.

Maybe I travel in different circles, but the faculty workday appears to me to be an already overstuffed suitcase.  Anyone who wants to cram in another sock needs to take a look at what’s already there. Mission creep, bureaucratic bloat, crushing compliance requirements, and the willful bliss with which research universities give away research time have filled every nook and cranny.

I talked a few weeks ago about how research is given away, and it’s a topic that always draws phone calls and email.  But let’s take a look at the same data that CCAP uses.  The John William Pope Center recently published a national analysis of teaching loads.  It should come as no surprise that they have gone down over the last twenty years, but more interesting is the trend.

The decreases virtually track the increased workload by program officers at Federal funding agencies. But since staff spending at agencies like NSF has been stagnant for twenty years, program officer workloads really just measure proposal submissions.

Why the decrease at Carnegie Research and Doctoral institutions?  According to an NSF study the tendency in most NSF program offices is to deliberately underfund project proposals.  Over half of the researchers surveyed reported that their budgets had been cut by 5% or more and that their grant duration had been slashed by 10% or more.  There is little room for padding an NSF budget, so these are real cuts in funds that are needed to successfully complete a research plan. One more sock stuffed into the productivity suitcase.

What does a winning proposal cost?  The same study reported:

…PIs’ estimate of the time it took for them and other people—for example,
graduate assistants, budget administrators, and secretaries (not including time spent by
institutional personnel)—to prepare their FY 2001 NSF grant submission was, on average, 157
hours, or about 19.5 days. It should be noted this is the time for just one proposal that was
successful.

Since the NSF success rate is currently around 25%, that’s about 80 days just to prepare a winning proposal.  Add to that the time needed to conduct the research that goes into every proposal submission, and you get a rough idea of what needs to be funded just to make research pay for itself.  This is lost productivity, and it shows up in reduced faculty teaching loads.

The trends at Comprehensive, Liberal Arts, and Community Colleges measure something slightly different: each of these institutions sees climbing the Carnegie hierarchy as important to their missions.  For example, NSF awarded $350M to community colleges last year.  The lions’ share of these funds went to worthy projects to train technicians, broaden participation in the sciences and support research experiences for returning veterans.  Individual awards for some of these programs start at $200,000 and solicitations for larger, center-scale proposals are encouraged. Like their research cousins, Community Colleges reduce classroom productivity to compete for federal research awards. An institution with an undergraduate research mission can easily get drawn into a system they cannot afford. And the data supports the claim.  For the period covered by the Pope Center report, proposal submissions from these institutions have increased almost in lockstep with lost classroom productivity.

Measuring technical productivity is not a job for the faint of heart. You have to take into account all uses of time, and outcomes that are often unpredictable events influenced by factors beyond an organization’s control. Modeling productivity is complex and frequently contentious, but I have yet to find anyone who seriously proposes measuring engineering productivity by the amount of time spent at a single activity.  Outside higher ed.

There is an easier explanation for the disturbing downward trend in teaching loads. It is mission creep.  There is really only one way out, and it has nothing to do with cramming more into a Texas-sized suitcase.  How about if everything from sponsored research to intercollegiate athletics had to pay its own way?  The academic suitcase is full of stuff already.  Let’s figure out where to put everything else one sock at a time.

Normally collegial discussions took a nasty turn after I suggested that most universities lose money on sponsored research.

Incredulous: “I don’t believe it. My department tacks a 50% surcharge to all my contracts; how can they lose money?”

Defensive: “Here are all the reasons that doing research is a good thing, so what’s your point?

Defensive with an edge: “Why are you attacking research?

Let’s be be clear about it:  if it’s your institution’s mission to conduct research, then spending money on research makes perfect sense.  In fact, it would be irresponsible to deliberately starve a critical institutional objective like research.

On the other hand, there are not all that many universities with an explicit research mission.  But there is an accelerating trend among  primarily bachelor’s and master’s universities to become — as I recently saw proclaimed in a paid ad — the next great research university. The university that paid for the ad has absolutely no chance to become the next great research university.  Taxpayers are not asking for it.  Faculty are not interested. Students and parents don’t get it either.

The administration and trustees think it’s a great idea.  Research universities  are wealthy.  Scientific research requires new facilities and more faculty members.  Research attracts better students. Best of all, federal dollars are used to underwrite new and ambitious goals. Goals that would be out of reach as state funding shrinks. As often as not, the desire to mount a major research program is driven by a mistaken belief that sponsored research income can make up for shrinking budgets. It’s a deliberate and unfair confounding of scholarship and sponsored research

If your university is pushing you to write grant proposals to generate operating funds, then alarm bells should be going off.  Scholarship does not require sponsored research. Chasing research grants is a money-losing proposition that can  rob funds from academic programs.  It’s an important part of the mission of a research university, but for almost everyone else, it’s a bad idea.  It’s a little like shopping on Rodeo Drive:  there’s nothing there that you need, and if you have to ask how much it costs, you can’t afford it.

How is it possible to lose money on sponsored research?  After all, professor salaries are already paid for.  The university recovers indirect costs. Graduate and undergraduate students work cheap.

A better question is how can anyone at all can possibly make money on sponsored research. Many companies try, but few succeed.  A company that makes its living chasing government contracts might charge its sponsors at a rate that is 2-3 times actual salaries. Even at those rates, it is a rare contractor that manages to make any money at all.

On the other hand, a typical university strains to charge twice direct labor costs.  Many fail at that, but the underlying cost structure — the real costs — of commercial and academic research organizations are basically identical.  There is a widespread  but absolutely false assumption that underlying academic research costs are lower  because universities have all those smart professors just waiting to charge their time to government contracts. The gap between what universities charge and what sponsors are willing to pay commercial outfits is the difference between making a profit and losing a lot of money. Just like intercollegiate athletics, sponsored research programs tend to lose money by the fistful.

Let me say up front that the data to support this conclusion are not easy to come by.  Accounting is opaque. Sponsors know a lot about what they spend, but relatively little about what their contractors spend.  It is in nobody’s interest to make the whole system transparent.  But my conversations with senior research officers at well-respected research universities, paint a remarkably consistent picture.  With very few exceptions, it takes $2.50 to bring in every dollar of research funding.

Fortunately, the arithmetic is easy to do.  If you know the right questions to ask, you can find out how much sponsored research is costing your institution. Here are ten sure-fire ways to lose money on sponsored research. You do not need all of them to get to a negative 2.5:1 margin.  If you are clever just a couple will get you there.

  1. Reduce senior personnel productivity by 50%: university budgets are by and large determined by teaching loads, a measure of productivity. It is common to adjust the teaching loads of research-active faculty. Sometimes normal teaching loads are reduced by 50% or more.  It is, some argue, table stakes, but a reduced teaching load is time donated to sponsored research because funding agencies rarely compensate universities for academic year support.
  2. Hire extra help to make up for lost productivity: Courses still have to be offered, so departments hire adjuncts and part-time faculty.
  3. Do not build Cost of Sales  into the contract price: The sales cycle for even routine proposals can be  months or years.  Time spent in proposal development converts to revenue at an extraordinarily small rate. In nontechnical fields and the humanities where research support is rare, the likelihood of a winning proposal is essentially zero.
  4. Engage in profligate spending to hire promising stars: Hiring packages for highly sought-after faculty members can easily reach many millions of dollars.  A sort of hiring bonus, there is little evidence that this kind of up-front investment is ever justified on financial grounds.
  5. Make unsolicited offers to share costs: Explicit cost-sharing requirements were eliminated years ago at most federal agencies.  Nevertheless, grant and contract proposals still offer to pay part of the cost of carrying out a project.
  6. Allow sponsors to opt-out of paying the indirect  cost of research: An increasingly common practice is to sponsor a research project with a “gift” to the university.  Gifts are not generally subject to overhead cost recovery, so a university that agrees to such an arrangement has implicitly decided to subsidize legal, management, utility, communication, and other expenses, and
  7. Accept the argument that indirect costs are too high: The  meme among federal and industrial sponsors is that indirect costs are gold-plating that must be limited. Rather than believe their own accounting of actual costs of conducting research, they argue that universities, should limit how much they charge back to the sponsor.
  8. Build a new laboratory to house a future project: Sponsors argue that it is the university’s responsibility to have competitive facilities.  But that new building is paid for with endowment funds or scarce state building allocations that might have gone toward new classrooms or upgraded teaching labs.
  9. Offer to charge what you think the sponsor will pay, not what the research will cost:  Money is so tight at some funding agencies that program managers are told to set a (small) limit on the size of grants and proposals independent of the work that will be actually be required.
  10. Defray some of the management costs of the sponsoring agency: It has become so common that it is hardly noticed.  University researchers troop into badly-lit conference rooms to help program officers “make the case” to their management.
The list goes on. It is so easy to turn a sponsored research contract into a long-term commitment to spend money for which there is no conceivable offsetting income stream that institutions routinely chop up the costs and distribute them to dozens of interlocking administrative units.  The explosion in the number of research institutions has all the elements of an economic bubble.
  • It is motivated by a gauzy notion that all colleges and universities are entitled to federal research funds..
  • It is fed in the early stages by accounting practices that make it easy to subsidize large expenditures.
  • It has the cooperation of funding agencies who know that the rate of growth is not sustainable.

Virtually everyone involved in university research knows that the bubble will burst.  A colleague just showed me an email from his program director at a large federal research agency.  It said that — regardless of what he proposed — the agency was going to impose a fixed dollar amount limit on the size of its grants. But in order to win a grant, he had to promise to do more.  His solution: promise to do the impossible in two years instead of three.  Just like the famous Sydney Harris cartoon,  a miracle is required after two years. At least there would be enough money to pay the bills while a new grant proposal was being written.