Frequently Asked Questions: Research Funding

Many. In the past year alone, federally funded research conducted at Caltech on behalf of the American people has resulted in:

• A technique that enables the mass production of long-lasting wearable sweat sensors that would help patients and physicians monitor vitamins, hormones, metabolites, and medications in real time.
• An algorithm that helps autonomous robots determine the best movements to make as they navigate the real world.
• An artificial intelligence strategy that would help aircraft respond safely to sudden turbulence.
• A headset-based device that can be used to noninvasively assess a patient's stroke risk.
• A method that uses seismic technology to measure soil moisture in real time, crucial for managing water use and conservation.
• A first-of-its-kind tool for genetically modifying plants in ways that could address challenges such as food insecurity and protect ecosystems from invasive species.
• Virtual sensors that help keep aerial vehicles aloft when rotors fail.

Federal funding makes possible the fundamental research that eventually leads to applications and discoveries—in energy, national security, health, and other critical areas—that benefit society and spur economic growth. The federal government has the unique ability to steer research toward public needs and priorities that philanthropy does not address, and, unlike private industry, to make large, long-term investments when innovation is at its earliest stages.

Federal research funding supports the direct and indirect costs associated with research. Both are essential to research activities.

Direct costs are expenses that can be directly attributed to a research project, such the salaries and benefits of scientists and others who work on the project, as well as the lab supplies and equipment they use.

Indirect costs, sometimes referred to as facilities and administrative (F&A) costs, include the infrastructure and operations that make it possible to conduct research: expenses like the maintenance of research buildings and instruments, as well as the professionals whose work and expertise support research activities. These individuals include technical research staff who manage and facilitate access to state-of-the-art instruments, custodial service and tradespeople who support operations, as well as professionals in environmental health and safety, human resources, legal counsel, security, accounting, communications, and other areas. The federal government does not pay these costs directly, but rather reimburses them based on a pre-negotiated rate.

Yes. For more than 30 years (since 1991) the percentage of direct costs that the federal government will reimburse for administration has been capped at 26 percent.

Federal funding supports a significant portion of Caltech's overall operations, so substantial reductions in federal support would disrupt our research enterprise overall. The full impact depends on the nature of any cuts, for example, on whether they apply across federal agencies or are focused on specific fields of research.

Caltech's endowment is an investment fund designed to provide support—for students, faculty, and their research and education endeavors—over the Institute's lifetime. University endowments are made up of hundreds, sometimes thousands, of separate funds, each initially established by charitable donations.

Caltech's endowment already supports research and education, but there are important reasons endowment funds cannot replace federal dollars. For one, to ensure that research and education needs are met for decades to come, Caltech, like most universities, spends the payout (investment income) and not the principal of our endowment each year. Moreover, as at most non-profit universities, the funds that make up Caltech's endowment are largely restricted. That means the payout from those funds can only be spent in ways that meet the legally binding terms specified by their donors.

Caltech puts its endowment to use every day in support of our mission of world-leading research and education. For example, over the past five years, Caltech's endowment has made possible $200 million in financial aid, helping to ensure that more than 75 percent of students graduate from Caltech debt-free. Endowment revenue also supports curiosity-driven science that improves lives and fuels discovery and innovation.