> Look at how much grant money a given university brings in annually and ask yourself if 30-60% of that number is being spent on overhead related to research. It’s not.
Look at a consulting company or law firm. Most will charge you 2-3x the salary cost of the consultant or lawyer you're getting. This limits universities to 1.15x.
Right - but as a consulting partner I take home that margin to spend on my boats, homes, and watches. What are universities getting? More university...
To be clear, this is not margin, it's non-direct expenses. So the consulting partners probably take home half of that multiplier as profits, and the other half goes to pay for the paralegals, AR/AP, HR, IT, office lease, janitorial .... all the things that Universities use their overhead to cover. What a surprise!
Look at a consulting company or law firm. Most will charge you 2-3x the salary cost of the consultant or lawyer you're getting. This limits universities to 1.15x.