Grant funding, particularly in STEM, was thrust into the spotlight earlier this year by the new administration’s attempt to cap indirect costs at 15%. This was met with public confusion, as many non-scientists (and scientists alike) aren’t familiar with research infrastructure and how funds are awarded. So, what are indirect costs, anyway?
Indirect costs are essential institutional costs that aren’t necessarily tied to one specific project or lab. Instead, these costs go toward the facilities, equipment, and personnel that are shared across all labs and projects such as environmental health and safety officers who ensure research is conducted in accordance with federal and state laws. For more information on the costs of federal research, check out this informative video from the Association of American Universities.
The current indirect cost system involves negotiating a specific rate for each institution, but within that institution, all modes of research face a flat indirect cost rate. This matters because not all types of research being performed, such as clinical vs. pre-clinical, have the same financial needs. Further, this model does not account for the dramatic increase in research costs since its inception.
To remedy these issues, the Joint Association Group on Indirect Costs (JAG) – representing research institutions nationwide – sought to develop a new model for indirect costs to improve efficiency and transparency to American taxpayers.
Aptly named the Financial Accountability in Research (FAIR) Model, JAG created an auditable payment structure that addresses a multitude of problems in the current model. Where the current model does not account for differences in resource requirements across scientific disciplines, the FAIR model aims to align project expenses with the type of research being conducted. Similarly, the FAIR model replaces the current model’s “indirect costs” with actual cost categories, providing more transparency to American taxpayers who are ultimately funding the research. This transparency also allows researchers to compare their costs with others in each category. Other benefits of the FAIR model are covering the actual costs of research mandated by government regulations, supporting NGOs receiving federal research funding, and designating research information services (i.e., librarians) as essential, highlighting their value. It would also ensure true reimbursement for federally funded research, ensure predictable reimbursements, and require changes to Uniform Guidance and salary/budget cap policies.
JAG’s FAIR Model, like any framework, has its drawbacks. One of the most significant challenges it faces is its implementation within the scientific community. Such dramatic changes require a complete realignment of technology and training to ensure that all employees and researchers understand the new structure. This process requires considerable time and financial resources. Additionally, detailing the specific cost categories outlined in the model adds to the administrative burden. Lastly, the FAIR model does not address equity concerns that persist in research settings. In other words, larger institutions with more resources may still benefit more than smaller ones simply due to higher volume of applications and ability to dedicate resources to detailed reporting.
The FAIR model aims to achieve transparency and efficiency by introducing three categories of costs:
- Research Performance Costs: Also known as “direct costs,” these costs are directly tied to research project- related activities, such as personnel or supplies.
- Essential Research Performance Support Costs: These are expenses incurred to ensure research compliance with regulations. This category includes costs for managing awards, paying for journal subscriptions to publish findings, utilizing facilities, and more.
- General Research Operations: This category encompasses costs related to institutional payroll, human resources, benefits, and other operational expenses.
JAG conducted community outreach to develop the framework and sent the proposal to Congress and the White House in July 2025. As of October of 2025, more than 280 national organizations (including AWIS) have expressed support for the FAIR model, however there has not been any movement toward implementation. JAG has committed to continue to work with legislators to agree on a model.
The current cost structure for grant funding continues to be a point of confusion for researchers and non-researchers alike. JAG’s proposed model aims to address many of the areas that continue to confuse the research community. While the model may not provide the perfect solution to the problem of complicated funding structures, it’s certainly a start. To learn more about the FAIR model, we encourage both researchers and non-researchers to explore the information found on this FAQ page. To help advance the FAIR model and support scientific research funding, we urge readers to contact their local representatives and share your thoughts.
Eposi Elonge, Bailey McLagan, Megan Pohlmann, RN, MSN, CPN, and Sydney Woods are members of the AWIS Advocacy Committee and would like to thank their fellow committee members who helped provide research for this article. The AWIS Advocacy Committee works to ensure that all women in science and STEM related fields can achieve their full potential. Our advocacy work focuses on achieving positive system transformation, equitable workplaces, and recognition of women’s scientific and leadership achievements.