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Comment by keiferski | Hacker News Reader

There’s a little thing called the profit motive. Universities aren’t perfect but few other institutions have deliberate spaces for non-commercial work.

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US universities are becoming for profit institutions using non-profit status to cook the books.

Yes and the administrative areas take up to 50% of all grant funding as "overhead"

Some overhead is necessary of course, you need buildings and offices and the people who take care of them but it's likely more bloated than it needs to be.

> administrative areas take up to 50% of all grant funding as "overhead"

I saw them take 60% as overhead at one of my institutions.

Are there no caps on admin overhead for grants? (it's been awhile since I've been close to academia)

At least in the US, an institution’s “facilities and administrative” F&A rate gets negotiated with the Federal government every four or five years.

I know of some institutions with F&A rates at or above 70%!! I presume that an institution trying to negotiate a higher F&A rate than this would have some significant pushback!

70% is not that high these days -- there are institutions (normally non-university-affiliated research institutions like the Salk Institute that still apply for NIH and NSF grants) have overheads of 90%! It's important to realize that overheads aren't taken out of the grant given to the researcher, they are added to it. So if a researcher gets a $100K grant at institution with 70% overhead, the institution gets $170K.

Many grant giving institutions limit what they are willing to pay. For example, from my understanding the European research council will only pay 25% even if you university demands more.

Ivy league schools in particular are essentially just endowment funds with some teachers around to keep their non-profit status. There are plenty of great educational institutions out there but the most prestigious ones are suffering from their success and attracting money-minded management that is more focused on growing their investment portfolio and handing out juicy bonuses than attracting good staff and ensuring a good educational environment.

And even with all that universities still have better a more altruistic profit alignment than most private firms.

> There are plenty of great educational institutions out there but the most prestigious ones are suffering from their success and attracting money-minded management that is more focused on growing their investment portfolio and handing out juicy bonuses than attracting good staff and ensuring a good educational environment.

People keep trotting this line but without any substantial proof. Harvard's highest paid employee is a faculty member, David Malan, of the popular CS50 course earning $1.6 million annually [1]. It's always been faculty members earning even more than the President.

I assume you're counting Harvard Management Company, the firm managing Harvard's endowment. Yeah, the CEO earns $9 million annually, which is quite high [2]. But there's a catch; were he in the private industry managing a $50 billion+ fund, he'll easily clear $50 million+ in annual compensation, if not $100 million depending on the performance.

The endowment managers operate differently from the institution, and salaries are actually much lower than in the private sector. Maybe you want to complain about inequality, sure, but that's another thing entirely. They're paying the least they can to get expert fund managers..

1- https://projects.propublica.org/nonprofits/organizations/421...

2- https://projects.propublica.org/nonprofits/organizations/237...

The number of $100 million+ buildings a New England town of 8,000 can have is staggering. The problem is the idle hands and minds these buildings house. The number of administrator looks like a make work project to create more jobs.

I think the profit motive thing is stupid. It only matters if the organization itself is a volunteer organization. For example, if an organization is being run by nuns, I agree that profit doesn't matter because nuns aren't allowed to own any assets or have an income (by their own profession of course). However, in a 'normal' non-profit organization, the various stakeholders (employees, grant recipients, etc) actually have a huge profit motive.

To me it doesn't matter if a CEO is working to get money for investors or to pad his own pockets. at the end of the day, the incentives are the same.

So, no, I don't think this matters at all. While true that universities do have space for non-commercial work (which is usually funded by outside parties like the NSF or corporations anyway), the university leadership have a huge profit-motive to get more students (via attracting to professors) to pad their own pockets.

In some ways, the non-profit sector is even more self-serving than the private one. At least private companies have to seek the best for their investors, while many non-profits simply seek the best for the CEO.

This hyper focus on CEOs is fascinating to me. Everyone acts like CEOs are dictators that enslave their people. It's likely the other way around and we have to pay them so much because nobody would do the job otherwise.

Managing an organization of any complexity is like herding cats. It's got a life of its own and you're at the top just leaning on the helm trying to steer the ship 2° starboard.

Any large group is going to form into a hierarchy naturally. The senior leadership at any large organization are ridiculously talented individuals at the tops of their classes. Half the reason the top jobs pays more is to signal the hierarchy.

I have nothing against ceos. More power to them. I have an issue claiming that a well paid CEO at a non profit is not motivated by his own potential profit.

And researchers without a profit motive are free to continue to work for peanuts.

But that research is important and benefits us all - so, with how much excess and wealth stratification we're seeing in the modern world, isn't it worth it to divert some of that to supporting that research? If we're too focused on profit we'll optimize for a local maximum and miss out on highly impactful developments that might initially seem to be dead-ends.

The NSF and DoE and other government agencies make insane amounts of capital available for research. The CHIPS act included ~$53 billion in funding on its own.

The NSF may be getting its budget cut to about $9 billion, which is not a huge amount considering all the areas they cover.

Now compare that with the profit of big tech… that is truly insane.

I dont think I agree with any of your assumptions.

1) Private research doesn't benefit all

2) Private research precludes public research

3) A local Maximum would be a problem or trap

4) The underlying view that the public has a right to individual wealth and it is underutilized resource.

If you want to do AI research along a line that doesn't seem to currently represent big immediate profits, you aren't going to be competing with SV firms anyway.

You still have to get grants and all for that area, and then "profit motive" of one form or another might sneak back in, but that would be true even without SV firms as well.

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