July 11,2025 , Press release from the JAG
The following is a joint statement from the Association of American Universities (AAU),
Association of Public and Land-grant Universities (APLU), Association of American Medical
Colleges (AAMC), American Council on Education (ACE), Association of Independent
Research Institutes (AIRI), Council on Governmental Relations (COGR), National
Association of Independent Colleges and Universities (NAICU), American Association of
State Colleges and Universities (AASCU), Science Philanthropy Alliance (SPA), and the
National Association of College and University Business Officers (NACUBO).
Joint Associations Group on Indirect Costs Releases Recommendation for Updated,
More Efficient, Transparent Research Funding Model
Today, the Joint Associations Group (JAG) on Indirect Costs released its recommendation to
Congress and the executive branch for a new model to replace the current facilities and
administrative (F&A) cost structure that the federal government uses to fund the indirect
expenses that universities and other research organizations incur when conducting
federally funded research on behalf of the American people.
Indirect costs are the essential institutional costs associated with conducting sponsored
research. Examples include building and facility maintenance; supporting the preparation,
submission, and financial management of grant proposals and awards; funding for human
resources, payroll, acquisition, and essential utilities and space upkeep; secure data
storage and high-speed data processing; complying with multiple federal research security,
human subject protections, environmental health, and safety requirements; and much
more. Indirect costs do not include other institutional activities unrelated to research, such
as education, training, athletics, and more.
The federal government funds indirect costs so universities and other research institutions
can provide scientists and researchers with the resources and support they need to drive
breakthroughs in science, technology, and medicine – advancements that keep our nation
globally competitive, economically strong, and that improve the lives of all Americans.
While the current system for reimbursing indirect costs has served the nation's research
objectives well for decades, it is difficult for taxpayers to understand and can be made
more efficient. Members of Congress have called for a new approach, and the JAG has now
delivered a comprehensive model that is simple, more easily explained, and enhances
transparency and efficiency.
The JAG, a group representing a wide variety of colleges, universities, medical schools,
hospitals and medical centers, and independent research institutions, launched the effort
in April to explore alternative indirect costs models, assembling a team of subject matter
experts (SME) with extensive experience in both direct and indirect costs. These experts
conducted a thorough evaluation of the existing indirect costs framework and assessed
potential alternatives.
Since April, the JAG has hosted four "town hall" webinars, each drawing roughly 2,000
participants from across the higher education and independent research communities.
These sessions outlined the JAG process for developing a new model, introduced two
provisional models, and invited feedback from the research community to help inform the
final recommendation.
Informed by robust feedback from the community, the final Fiscal Accountability in
Research (FAIR) model incorporates elements of the two provisional models and effectively
accommodates the differing operational and research support needs, and the wide array of
other characteristics, of institutions that conduct research on behalf of the federal
government.
Foundational elements of the FAIR model include:
• Reducing confusion and misunderstanding: FAIR employs a total-project-costs
calculation to determine indirect costs; this is designed to reduce confusion as to
what percentage of an award goes to indirect costs. This approach offers a simpler,
more intuitive understanding of how costs are calculated.
• Promoting transparency: FAIR provides greater accountability and transparency to
the American taxpayer, to researchers, to administrators, and to the federal
government about the true costs of federally sponsored research. To this end, the
new model requires greater accountability from universities to demonstrate that
funds provided for essential institutional research support are being spent
appropriately. Further, rather than treating every project the same irrespective of
scope or discipline as in the current F&A structure, the new model specifically
accounts for such differences, providing a common-sense approach to allocation of
interest costs.
• Greater efficiency: The new system eliminates the intensive process of negotiating
university-wide indirect cost rates with specific federal oversight and accounting
offices within the Office of Naval Research and the Department of Health and
Human Services. This saves time and money while reducing confusion about how
indirect cost rates are determined, why they differ from one institution to the next,
and how they translate to the actual dollar amount of total grant funding devoted to
indirect costs.
"Although no model for recovering indirect costs is perfect, I believe we have arrived at the
best solution for helping maintain American global leadership in research and innovation,
keeping our research enterprise strong across all types and sizes of institutions, and
providing greater accountability to the American taxpayer," said former White House Office
of Science and Technology Policy Director Kelvin Droegemeier, who helped lead both the
JAG effort and the team of subject-matter experts who helped propose the FAIR model.
"We owe a debt of gratitude to the many talented individuals who put their personal and
professional lives on hold and worked under extreme time pressure to develop the FAIR
Model. The national research community provided hundreds of helpful suggestions and
analyses that guided our work, and we were blessed to have a supportive, productive
collaboration with our government colleagues."
With the recommendation now finalized, the JAG will host a town hall webinar on Tuesday,
July 15 to present the FAIR JAG Model to the research community. The JAG is committed to
working with Congress and the executive branch to advance a fair, bipartisan model for
indirect costs that strengthens U.S global leadership in research, innovation, and
education for generations to come.
Additional information about the JAG and the subject matter experts team as well as prior
statements and recordings of webinars is available here; materials on the FAIR model are
also available.
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Kathleen Larmett
Executive Director
National Council of University Research Administrators
Washington, DC
202-466-3894
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