Universities must tap endowments to sustain biomedical research

Biomedical research is one of America’s great superpowers. It’s also one of its most expensive hobbiesright up there with rockets, professional sports stadiums, and trying to make a printer behave like a normal appliance.

For decades, the basic deal looked simple: federal agencies (especially the NIH) fund discoveries, universities provide the environment, and everyone celebrates when a new therapy makes it out of the lab and into real lives. But the modern research “operating system” has started to lag. Costs are rising, grant outcomes are choppier, and policy whiplash around research overhead has made long-term planning feel like building a skyscraper in a wind tunnel.

That’s why universities need to do something that sounds controversial but is actually pragmatic: tap endowmentsstrategically, transparently, and within legal and fiduciary guardrailsto stabilize biomedical research. Not as a panicked endowment raid. More like installing a surge protector on a system that keeps getting power spikes.

Why the biomedical research funding model is wobbling

Direct costs vs. indirect costs: the unglamorous backbone

Most people picture research funding as money for microscopes, reagents, and brilliant people having ideas at whiteboards. That’s “direct costs.” But every functioning lab also depends on “indirect costs” (often called Facilities & Administrative, or F&A): the electricity that keeps freezers cold, compliance offices that keep humans and animals safe, cyberinfrastructure that keeps patient data secure, hazardous waste disposal, building depreciation, and the staff who manage grants so scientists can do science.

When indirect-cost support becomes uncertain, research doesn’t just get less comfortableit becomes harder to do responsibly. Universities end up patching holes with one-time funds, deferring maintenance, shrinking core facility hours, or quietly reducing the number of trainees they can support. And because biomedical research often runs on multi-year timelines, instability today shows up as fewer breakthroughs tomorrow.

Soft money: when your paycheck has an expiration date

On many campusesespecially in academic medical centersfaculty salaries are partially (sometimes heavily) supported by grants. This “soft money” structure can help universities expand research quickly, but it also turns scientific careers into high-stakes subscription plans: if renewal fails, everything gets awkward.

The human cost is real. Labs hesitate to start bold projects if they can’t trust staffing beyond the next budget cycle. Early-career investigators feel pressure to chase “safe” aims over risky, high-reward ideas. And departments spend a surprising amount of time making contingency plans instead of mentoring, teaching, and collaborating.

Volatility is the new normal

Even if you never read a single budget document for fun (healthy choice), you’ve probably noticed the vibes: universities have faced intense scrutiny over research overhead, and proposed federal changes have created uncertainty across the research ecosystem.

When policy proposals threaten to cap indirect cost rates, universities don’t simply “lose admin money.” They lose the funding stream that keeps research infrastructure runningoften with ripple effects like hiring freezes, reduced graduate admissions, delayed equipment replacement, and scaled-back clinical research support. That uncertainty alone can slow momentum because institutions plan for worst-case scenarios long before court challenges or reversals play out.

Endowments: powerful, but not a bottomless checking account

Why “just use the endowment” is both right and wrong

Endowments are frequently misunderstood as giant vaults labeled “BREAK GLASS IN CASE OF BUDGET PROBLEM.” In reality, most endowments are collections of many individual fundsmany with donor restrictions. A gift might be legally limited to scholarships, a specific professorship, a particular disease area, or a defined academic program. Even “unrestricted” endowment is typically governed by a spending policy designed to preserve purchasing power across generations.

That’s the “wrong” part.

The “right” part is this: within those constraints, endowments are one of the few financial tools universities control that can support long-horizon priorities. And biomedical research is the definition of a long-horizon priority. If universities want steady discovery pipelinesand want to remain globally competitivethey need a stabilizer that isn’t reset every fiscal year by politics, inflation, or sudden shifts in grant reimbursements.

Spending more is possible, but has tradeoffs

Most institutions aim for an endowment spending rate in the neighborhood of 4–5% annually. That range is not randomit’s meant to balance current needs with the long-term goal of maintaining the endowment’s value after inflation and investment costs.

Spending above policy levels can be justified in limited circumstances, but it carries risks: reduced future distributions, pressure on liquidity (especially if a large share is invested in less-liquid assets), and potential reputational damage if stakeholders believe the university is ignoring donor intent or acting imprudently.

So the case for tapping endowments is not a blank check. It’s an argument for a disciplined, mission-aligned allocation: a defined research-sustaining distribution that is transparent, time-bound where appropriate, and paired with reforms that reduce the need for future emergency spending.

A practical case for tapping endowments specifically for biomedical research

Endowment dollars are uniquely suited to “bridge” the messy middle

Biomedical progress rarely moves in neat one-year increments. Translational research can take years of iteration: validating targets, reproducing findings, building animal models, running early clinical studies, and meeting regulatory and ethical requirements. The messy middle is where a lot of promising work diesnot because it was wrong, but because the team couldn’t keep the lights on long enough to prove it.

Endowment-supported bridge funding can keep labs alive between grants, prevent the loss of skilled staff, and preserve high-value datasets and patient cohorts. This is especially critical for:

• Early-career investigators building their first sustained program
• Teams waiting on resubmissions after promising but not-yet-funded reviews
• Clinical research groups maintaining trials infrastructure and compliance staffing
• Core facilities that serve many labs but can’t run on grant-to-grant luck

Stabilize people, not just projects

If universities want less churn and more creativity, they need fewer scientists living on financial cliff edges. Endowments can help shift the system away from maximum soft money dependence by funding:

• Endowed faculty lines where a portion of salary support is stable
• Shared research staff positions (biostatisticians, research nurses, lab managers)
• Protected time for mentoring, teaching, and collaborationactivities that make research better but are hard to “bill” to a grant

This isn’t about making universities “comfortable.” It’s about preventing talent loss and reducing the perverse incentives that make researchers chase incremental work over ambitious science.

Protect the invisible infrastructure that makes discovery possible

Biomedical research is a systems endeavor. Even the most brilliant lab fails if the institution can’t support biosafety, IRB operations, animal care, secure data storage, equipment servicing, and compliance training. These are not optional extras; they are the price of doing credible, ethical research.

When overhead reimbursements are threatened or unpredictable, universities tend to defer infrastructure investments first because they’re not as visible as “a new grant.” Endowment-backed infrastructure support can keep the basics healthyso researchers aren’t running world-class science on duct tape and hope.

Keep the training pipeline alive

The U.S. biomedical enterprise depends on trainees: graduate students, postdocs, research technicians, and clinical fellows. But in a shaky funding climate, universities often reduce cohort sizes, freeze hires, or delay admissions. Those choices can take a decade to unwind.

Targeted endowment distributions can support training grants matching funds, stipend backstops, and shared training resources (like statistics support and responsible conduct programs). The payoff is long-term national capacityexactly what endowments are designed to enable.

How to tap endowments without torching them

1) Create a “Biomedical Research Continuity” distribution inside the spending policy

The simplest sustainable model is not “spend more.” It’s “spend smarter.” Universities can reserve a defined slice of existing endowment payoutwithin the normal spending policyfor research continuity. That might mean reallocating part of unrestricted distributions or aligning discretionary endowment income with research stabilization as a stated priority.

Key design features:

• Clear annual cap (e.g., a fixed percentage of payout, not a floating wish list)
• Transparent criteria for awards (bridge funding, core facility support, compliance staffing)
• Independent review to prevent politics and favoritism
• Public reporting on outcomes (publications, follow-on grants, patents, clinical milestones)

2) Use endowment funds for time-limited bridge support (6–18 months)

Bridge funding works best when it is time-bound and paired with a plan. A strong program looks like this:

• Short runway to keep staff and experiments going
• Milestones (submission dates, pilot data targets, collaboration agreements)
• Coaching (grant-writing support, statistical consulting, mentorship committees)

The goal is not to replace federal funding. The goal is to prevent temporary gaps from causing permanent damage.

3) Build “F&A shock absorbers” for core infrastructure

Universities should identify which overhead-funded functions are truly non-negotiable for biomedical research safety and continuitythen create a protected reserve for them.

Think of it like hospital backup generators. You don’t buy them because you love spending money. You buy them because the moment you need them, you really need them.

Eligible uses might include:

• Animal facility operations and veterinary support
• Human subjects protections and IRB staffing
• Data security and HIPAA-compliant research IT
• Environmental health & safety and hazardous waste handling
• Core facility preventive maintenance contracts

4) Pair endowment spending with fundraising that’s actually usable

Universities love big numbers on campaign banners. Research continuity needs flexible dollars in the right places. Development teams can help by:

• Creating semi-restricted funds for “biomedical research resilience” (broad but mission-aligned)
• Encouraging donors to support core facilities and shared resources, not only named buildings
• Funding endowed research staff roles that stabilize multiple labs
• Offering sunset gifts (multi-year current-use funding) to complement true endowment

5) Tell the truth about restrictionsand make it legible

One reason “use the endowment” becomes a public argument is that the public sees a big headline number and assumes it’s spendable. Universities should publish a plain-English “endowment map” that explains:

• How much is restricted vs. unrestricted
• What the spending policy is and why it exists
• How much is tied up in less-liquid investments
• What changes are legally possible under donor intent and applicable endowment laws

Transparency lowers the temperature and raises the quality of decision-making.

What leaders should say out loud (and what they should stop pretending)

If universities want biomedical research to survive and thrive, they should stop treating instability as a personal character-building exercise for scientists. “Adversity” is not a funding model.

They should also stop pretending every lab can be supported entirely by federal dollars in perpetuity. The evidence is in the outcomes: success rates move, policies shift, and the cost of doing rigorous, compliant science does not politely pause while budgets argue with each other.

A credible message to stakeholders sounds like:

• We will stabilize essential infrastructure so research remains safe and reliable.
• We will reduce harmful reliance on soft money where it undermines innovation and careers.
• We will use endowment payout strategically, not impulsively, and we will report results.
• We will advocate for strong federal support while building institutional resilience.

Counterargumentsand the guardrails that make this workable

“Endowment spending just rewards overspending and overbuilding.”

This critique has teeth. Universities should not use endowment money to paper over structural mistakeslike expanding lab space without sustainable operating plans, or hiring researchers with no realistic pathway to long-term support.

Guardrail: tie endowment-backed support to reforms, such as realistic startup packages, caps on soft-money salary expectations, and disciplined space planning.

“Only wealthy universities can do this.”

Not every institution has a massive endowment. But many universities do have some endowment payout, some discretionary reserves, and some capacity to redirect spending toward the highest-leverage research supports. Also, the goal isn’t to match the richest campuses dollar-for-dollar. The goal is to prevent avoidable collapse in labs and programs that matter to regional health systems, disease communities, and national innovation.

Guardrail: scale the approach. Even a modest “continuity fund” can protect a core facility contract or provide a semester of bridge support to keep a promising team intact.

“If you spend endowment now, you hurt the future.”

Spending policy exists for a reason. But so does the mission. If a university allows research capacity to erodeby losing talent, letting facilities decay, or shrinking training pipelinesthat’s also harming the future. The right question is not “spend or don’t spend.” It’s “what level of spending is prudent to preserve both financial health and scientific capacity?”

Guardrail: keep most support within the normal spending policy, use time-limited bridge funding, and treat any extraordinary draw as a documented, board-approved exception with a sunset.

The bottom line

Biomedical research is too important to run on a funding model that assumes stability will magically return “next year.” Universities cannot control every federal policy debate, grant success rate, or cost shockbut they can control whether they build a resilient internal foundation.

Tapping endowmentscarefully and transparentlyis not a betrayal of stewardship. It is stewardship, when the alternative is letting research infrastructure and human talent quietly leak away. The best universities won’t choose between “protect the endowment” and “protect discovery.” They’ll design a plan that does both, because that’s what endowments were meant for: enabling long-term mission in a short-term world.

Experiences related to the topic: what it looks like on real campuses

Across universities, the lived experience of funding instability looks less like a dramatic movie scene and more like slow-motion friction that wears people down. One common story starts in a lab meeting: a principal investigator shares that a renewal scored “close” but not close enough. Nobody panics at firstthere’s still a resubmission window, maybe a foundation application, maybe internal bridge support. But the lab manager begins quietly cutting purchase orders, the postdoc starts updating a résumé “just in case,” and a promising technician takes a job in industry because stability is a feature, not a luxury.

On the operations side, research administrators talk about the constant triage behind the scenes. When overhead reimbursements are uncertain, departments delay equipment maintenance, postpone replacing aging freezers, and stretch compliance teams thinner than anyone feels good about. The lab doesn’t see those decisions immediatelyuntil a core facility reduces hours, a queue for sequencing grows longer, or an instrument goes down at exactly the wrong time. Scientists don’t want a deluxe experience; they want predictable uptime, predictable staffing, and predictable rules.

Graduate programs feel it too. When universities anticipate budget gaps, admissions committees become cautious. Fewer students are admitted, rotations shrink, and some labs stop taking trainees because they can’t guarantee support through a multi-year program. That creates a weird paradox: at the moment the country needs more biomedical talent, the pipeline narrows because institutions can’t risk commitments. The long-term impact is hard to measure in a single fiscal year, but it shows up later as fewer experienced researchers, fewer cross-trained clinician-scientists, and less capacity to respond quickly when new public health challenges appear.

Clinical research teams describe another version of the same stress. Trials need continuity: trained coordinators, reliable data systems, and consistent monitoring. When budgets wobble, teams spend time searching for backfill funding rather than enrolling participants or analyzing outcomes. For patient communities waiting on therapies, “administrative uncertainty” doesn’t feel administrativeit feels like delay.

In places that do have endowment-backed continuity funds, the tone changes. Researchers still hustle (science is not a spa day), but they’re not forced into emergency mode every time a grant cycle goes sideways. A six- to twelve-month bridge award can keep a skilled lab intact, preserve hard-won datasets, and prevent the kind of stop-and-start research that wastes time and money. The most encouraging experiences come when bridge funding is paired with real supportgrant review help, statistical consulting, mentorship committeesso the institution isn’t just writing checks, but strengthening the overall system.

Ultimately, the “experience” of tapping endowments well is not flashy. It’s boring in the best way: fewer layoffs, fewer abandoned projects, better-maintained cores, and a steadier training pipeline. In biomedical research, boring usually means things are workingand that’s exactly the point.