CHAPEL HILL (June 13, 2025) – There’s been controversy this spring over the Trump administration’s proposal to cut the “overhead receipts” universities receive on federal research grants.
Dr. Penny Gordon-Larsen, Vice Chancellor for Research at UNC-Chapel Hill, describes very clearly in the accompanying video what overhead receipts are, what such a reduction would cost the university and why those dollars can’t be replaced with endowment dollars.
Overhead receipts are dollars the University receives on top of federal grants to pay for facilities, equipment, electricity, air conditioning, law enforcement and compliance with extensive federal reporting requirements to support its research.
In short, the boring but vital parts of what it takes to make world-class research happen.
“They’re not really directly visible to the public. But they are really essential for being able to carry out research,” Gordon-Larsen says.
$150 million?
UNC-Chapel Hill receives $1.55 billion a year in research grants. In its shared investments with the federal government, Carolina receives 55.5% in overhead receipts. If the University receives $100 for research, Gordon-Larsen explains, it receives another $55 for overhead. (Duke University receives 61%.1)
If that reimbursement was reduced to 15%, as the Trump administration proposed in February and in its newly released budget proposal,2 cost Carolina $150 million a year, she says.
“It would be a significant amount for us. It would be very hard for us to carry out and sustain research,” she says.
(Gordon-Larsen serves on a nationwide panel studying how to make overhead expenditures more transparent and accountable to both the public and investigators. “Stay tuned,” she said.)
Endowments ‘not a substitute’
Some suggest universities with large endowments can cover cuts to overhead receipts with their multi-billion-dollar endowments.
But if a donor wants to give millions to a university, they will often specify how it’s to be used – say, for student financial aid. The donor restricts use of the money to a specific purpose.
“We don’t have other sources to cover those (overhead) dollars,” Gordon-Larsen says. “And while a university may have endowments or they have tuition dollars, those are not appropriate to make up the cost…
“So they are not a substitute for what we receive in the way of this overhead.”
1 https://www.usnews.com/news/business/articles/2025-03-08/universities-are-facing-big-cuts-to-research-funding-at-duke-its-a-time-for-damage-control.
2 https://www.usnews.com/opinion/articles/2025-06-10/health-trump-medicine-science-budget-nih.
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