Impending National Institute of Health (NIH) funding cuts will "significantly" impact Stanford research, according to a statement released Friday from Provost Jenny Martinez, Dean of the School of Medicine Lloyd Minor and Dean of Research David Studdart.
The Office of the Director of the NIH announced Friday that the agency will reduce federal funding for "indirect costs," in research, specifically calling out institutes of higher education (IHEs) -- including Stanford -- as those who will be impacted. On average, 26% of NIH spending goes towards these indirect costs. Now, the NIH will limit the funding of indirect costs to 15%.
Indirect costs refer to a large category of operating costs that cover anything from maintenance to personnel wages for support staff. At Stanford, funding for indirect costs allows for "construction of laboratory space, the purchase and maintenance of scientific tools, and research computing," Martinez wrote in the statement.
In 2023, 54.4% of Stanford's NIH funding went toward indirect costs. Now, the NIH will limit that funding to 15%. According to Martinez, the shift would reduce NIH funding to all Stanford departments by approximately $160 million per year.
This cut in funding was made to "ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead," according to the NIH memo, which also noted that "indirect costs" are difficult for the agency to oversee.
The NIH is the largest public funder of biomedical research in the world. Stanford Department of Medicine has been one of the top recipients of NIH funding, receiving $172.6 million in total awards in 2022. In 2023, the agency awarded over $35 billion in grants to more than 2,500 research universities, with $9 billion designated for facilities and administration.
The NIH memo noted that other grant-awarding institutions like the Bill and Melinda Gates foundation have similar policies limiting indirect cost rates to 10% of grants for research universities.
The change is set to take effect on Monday Feb. 10, affecting all grants awarded after that date. While the agency will not retract funding for indirect costs awarded before Feb. 7, the memo wrote that retroactive defunding is within the NIH's authority.
The NIH memo is the latest in a series of actions from the executive branch concerning funding towards universities and university research. A recent Office of Management and Budget (OMB) memo also threatened to cut funding for federal agencies, but the order was blocked in court and has since been rescinded.
University president Jon Levin '94 had previously directed the Stanford community to continue ongoing research efforts, although he acknowledged at the Faculty Senate meeting on Thursday that the University is anticipating "many potential issues." Aside from advising faculty to continue their research, neither Levin nor Martinez has offered a comprehensive response to executive actions.
Martinez acknowledged the uncertainty of the situation. "We will keep you informed as the situation evolves, and will be doing everything we can to ensure support for the research mission of the university," she wrote in her statement.