Universities Getting the Most Government Money

The federal government gave out more than $40 billion for research and development (R&D) to universities across the country in fiscal 2011. Universities depend heavily on federal funding, with many of the top programs relying on the government for more than 60% of their R&D budgets. As a result, many research program directors fear that the federal cuts promoted by the sequester will hurt future funding.

A few of the top schools received a disproportionate share of the government’s spending on grants for R&D. Of all 896 schools that received federal money for R&D, approximately 20% of those funds went to just 10 universities, according to a study by the National Science Foundation. Johns Hopkins University alone received nearly $1.9 billion from the federal government in 2011, more than twice as much as any other university in the country. Based on data from the National Science Foundation, these are the 10 universities receiving the most federal funding for research and development.

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The same schools consistently receive the most money every year, said Ronda Britt, a survey statistician with the National Science Foundation who oversaw the study. The universities “have big research programs that receive a lot of support year after year, and have a lot of infrastructure that helps them keep the money stable,” Britt said.

In addition to federal funding, the schools on this list also tend to have large endowments that support prestigious research facilities. All but one university on this list has an endowment of at least $1 billion, and five of them had among the 15 largest endowments as of 2012. Stanford University’s endowment of more than $17 billion is the fourth largest in the United States, while the University of Michigan’s is nearly $7.7 billion and is the seventh highest.

While the schools on this list rely on massive endowments, the federal government comprised the majority of funding for R&D in all cases. At Johns Hopkins, 88% of the research budget came from federal funds. At the University of Pennsylvania, 80% of all R&D money came from federal funds.

With the exception of Johns Hopkins, the Department of Health and Human Services provided the majority of funds the universities received from the federal government. All of these universities have medical schools, and the vast majority of R&D funding goes toward programs at many of the universities on this list. At Duke, $831 million of research expenditures went to its medical school, while just $191 million was spent elsewhere.

Between 1998 and 2004, the amount of money given to colleges for R&D, especially medical research grants, grew rapidly because the National Institute of Health — an agency of the Department of Health and Human Services (HHS) — doubled its budget during that time, Britt explained. Federal funding then flatlined until the past two years, when it once again grew due to increased funding for research authorized by the stimulus package passed in 2009.

Sequestration could pose a challenge for these schools. It is not clear if certain universities or projects will be hurt more than others, although many expect a squeeze on their finances, Britt noted. “But it depends on how much money these agencies have going to universities versus other places,” Britt said. “It is an open question until we see budgets for 2013 and 2014.”

Regardless, the schools already have started making plans for the sequester and are preparing students and staff for a host of different scenarios. The University of Washington indicated that it may lose up to $83 million in federal funding for projects, potentially grinding some projects to a halt and leading to layoffs. The sequester could cost Stanford University around $51 million in federal grants.

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Based on data provided by the National Science Foundation, 24/7 Wall St. reviewed the 10 universities that received the most money from the federal government in fiscal 2011. The National Science Foundation provided breakdowns on the departments giving funding to universities, as well as also how much funding state and local governments, businesses and other groups gave to research and development. We also looked at each university’s endowment as of 2012, provided by the National Association of College and University Business Officers.

These are universities getting the most money from the government.

1. Johns Hopkins University
> Total federal R&D grant money: $1.88 billion
> Pct. R&D spending from government: 87.8%
> 2012 endowment: $2.59 billion

No college received more money from the federal government than Johns Hopkins University, which raked in nearly $1.9 billion in 2011. Unlike the other universities on this list, money from HHS did not constitute the majority of funding. More than $609 million came from the Department of Defense, while more than $202 million came from NASA. The reason for this is that one division of the university, the Applied Physics Laboratory, employs thousands of engineers and scientists primarily in support of defense programs. The university also has managed to rake in billions from fundraising as well. Billionaire New York mayor Michael Bloomberg pledged $350 million to the university to expand research for issues such as global health and, as part of the total pledge, will provide $100 million for need-based scholarships for undergraduate students as well. He is the first person to give more than $1 billion to a single university over a lifetime.

2. University of Washington, Seattle
> Total federal R&D grant money: $949 million
> Pct. R&D spending from government: 82.9%
> 2012 endowment: $2.11 billion

The University of Washington in Seattle acts as the primary public medical school for Washington, Alaska, Idaho Montana and Wyoming by offering subsidies to students from those other states. This is likely a reason the federal government gives them a lot of money. Although the majority of the money came from HHS, the university was the top recipient of money from the National Science Foundation, receiving more than $145 million in 2011. Researchers at the university said the institution could face $83 million in budget cuts due to the sequester. Among the concerns expressed are that entire labs could shut down and that employees whose money is tied to federal grants could lose their jobs.

3. University of Michigan
> Total federal R&D grant money: $820 million
> Pct. R&D spending from government: 64.1%
> 2012 endowment: $7.69 billion

While 64% of the University of Michigan’s R&D budget came from the federal government, the university spent a nation-high $363 million from its own money to finance research and development. The university also attracted attention when alumnus Charles Munger, the vice chairman of Berkshire Hathaway, recently pledged $110 million. The majority of the money will be used to construct a new graduate student resident hall, but $10 million will be used to fund fellowships across the university’s 19 different colleges and schools.