Needed:A Transparent Indirect Cost Model

In “Three Months on the Way to FAIR” (Issues, Fall 2025), which recounts the development of the Financial Accountability in Research model, Kelvin Droegemeier, Barbara Snyder, Toby Smith, Nancy Andrews, Willie May, Kurt Marek, and Farin Kamangar highlight the remarkable collaboration and cross-sector partnership that made the effort possible. As one of the participants in this intense, short-term effort, I can confirm the sense of urgency and the difficult nature of the group’s work.

The debate around the US model for federal reimbursement of institutions’ indirect costs for research has called attention to the need for reform. While the complexity and true costs of research have grown dramatically, the indirect cost reimbursement model has barely changed in decades. We need a system that aligns costs with the research performed in a complex, modern research ecosystem, that is calibrated to the regulatory and compliance framework, and that will maintain (or increase) US competitiveness in the global scientific arena. The current system is overly complex and difficult to understand, even for experts, which undermines clarity and obscures how costs are determined.

A transparent indirect cost model rebuilds trust in the partnership between the federal government and institutions, ensures that policymakers understand the true costs of world-class research, and enhances national competitiveness. The federal government’s investment in the full spectrum of research, ranging from discovery science to applied translation and innovation, underpins US health and economic strength. This investment has fueled national productivity, created jobs, and generated real-world applications in new commercial products, therapies, and other innovations that the private sector relies on. This is why federal investment in the broader US research ecosystem is so incredibly important.

US leadership in science and technology is proportional to the investments that the federal government make in the nation’s research infrastructure. Research institutions rely on a strong federal partnership to sustain the research ecosystem that makes scientific achievements possible via merit-based funding. The shared investments cultivate the competitive environment to advance the best science in the country (and the world).

A new model that reimburses the essential costs of research on a per-project basis with built-in accountability and transparency measures ties this investment back to the actual science. Such a model supports the collective ability to drive technological progress, catalyze medical breakthroughs, and develop the scientific workforce that powers the private, government, and nonprofit sectors—all so critical to the nation’s long-term economic prosperity and global leadership.

While the scientific community can see and appreciate this, it is not so evident to the broader public. It was highly motivating to see the research community come together—public and private, large and small, academic and nonacademic—to create a path forward to support the nation’s research infrastructure in short order. Knowing that the effort was backed by the leading higher education associations was tremendously encouraging. It is a strong testament of the commitment to work collaboratively with our partners in the federal government to strengthen the nation’s systems and continue to deliver exceptional value to all its people.

Penny Gordon-Larsen