The front page of the June 28, 2004 Wall Street Journal
(WSJ) carried an article titled, “At Pitt, Scientists Decode the Secret of Getting Grants -- Marketing Helps University Win $350 Million a Year from NIH, Irking Critics”. For a copy of the original article, click here
In reading the article and corresponding by e-mail with the author, Bernard Wysocki, Jr., I realized that the article outlining Pitt's grantsmanship strategy with NIH serves as a valuable template for other nonprofits in what to do as well as in what not to do.On the positive side:
However, Pitt has also developed a few bad habits:
- Pitt is goal-oriented and goal-directed -- it knows it wants to be a leader in government-funded scientific research
- Postdoctoral fellows and faculty receive exhaustive training in grant application development
- There is an explicit expectation that all relevant staff members will produce credible, fundable grant applications
- Faculty and administrators publicize their research initiatives, theories, and approaches at conferences where NIH staff and colleagues -- especially peer reviewers -- are likely to be in attendance
- Pitt has established a presence near NIH headquarters so staff can network in person with NIH staff, building relationships and trust through physical proximity
- Pitt faculty and postdoctoral fellows review each others' concept papers and applications to improve quality prior to submission -- a team-based internal peer review process
- Projects that are the subject of grant applications are tightly focused (ambiguity is a key reason for denial of funding)
- With all these positives, an organization can develop an effective grants development program.
- Heavy reliance on grants for infrastructure and overhead (Pitt is building a new $205 million biomedical center with $75 million in annual operating costs -- more than 80% of which is expected to come from grants!)
- High indirect cost structure -- 40% of grant funds are earmarked for indirect costs. This is common of large universities, but exceedingly rare for other nonprofits. This means that $140 million of Pitt's $350 million a year from NIH is being used for indirect (administrative/overhead) costs!
- Bonuses to staff for funded grants. Pitt pays an amount equal to 10% of a funded grant to the scientist who prepared the application. This practice is considered unethical by all major fund raising professional societies. Bonuses paid in this way are both percentage-based and contingency compensation outside ethical fundraising practice, according to the Association of Fundraising Professionals (AFP) and other key societies. [NOTE: I clarified with the article's author that these bonuses at Pitt are not paid from grant funds, but from other sources. Using grant funds to pay such bonuses might constitute civil or criminal fraud.]
- Pitt sets specific numerical targets for submitted applications, apparently without regard to application quality and relevance to mission of either the school or the funder.
Pitt has developed a serious, focused effort to direct NIH research grant funds to its institution using several techniques successful nonprofits have used for a long time. However, the fact that NIH research funds are growing at a much slower pace than was true several years ago raises red flags for Pitt. They are now under pressure to "increase market share" in a more competitive NIH grants environment in order to support the infrastructure they committed to in more affluent times. In other words, they face a potential sustainability problem. Finally, if I were in the advancement (fundraising) department at Pitt, I'd be asking some serious questions about the ethics of the bonuses being paid for funded grants.