VCRED Links
Contact us
312 South Building
Campus Box 4000
UNC-Chapel Hill
Chapel Hill, NC 27599-4000
Tel: 919-962-1319
Fax: 919-962-1476
Why Carolina Depends on Facilities-and-Administrative Funds
What F&A funds mean to North Carolina.
Facilities-and-administrative funds, also known as the "overhead" from contracts and grants, enable Carolina to conduct vital research that provides 25,000 jobs in the state, attracts the brightest minds to our campus, and enhances the well-being of North Carolinians in all 100 counties. In fields such as medicine, chemistry, genomics, and biotechnology, scientific breakthroughs will soon inspire substantial new industries and technologies. With the use of F&A funds, Carolina has carefully positioned itself to become a national leader in these strategically important fields, laying the foundation for a surge of economic growth in North Carolina. To maintain our leadership and competitive advantage, we will need to retain the full use of our F&A funds.
^ to top
What depends on F&A funds?
- Financial soundness.
- Economic progress.
- Grants.
- Employees.
- Service.
- Research compliance.
- Projects under construction.
- Future capital projects.
- Equipping new buildings.
- Teaching.
- Libraries.
- Start-ups for new faculty.
- Innovation.
Financial soundness depends on F&A funds.
In almost every sector of the University, we rely on F&A funds to meet our financial obligations and to fulfill our mission of teaching, service, and research. A reliable stream of F&A revenues helps us achieve a highly favorable bond rating, which enables the University to lower construction budgets by reducing the cost of borrowing money. A substantial threat to our F&A revenue stream could jeopardize our bond rating and escalate our costs.
Economic progress depends on F&A funds.
Outside funding has a substantial impact on the state's economy. It also attracts talented faculty and students who create the new technologies and innovations North Carolina will need to recover its economic momentum. Carolina technologies have spurred the University to launch several new companies that will create jobs for the state. Since 2000, more than 20 companies have been launched. These include Qualyst, which develops and delivers products for screening drug adsorption, digestion, metabolism, and excretion, improving the efficiency and effectiveness of drug discovery and development. The technology originated with pharmacy professors Dhiren Thakker, Gary Pollack, and Kim Brouwer. The University also launched AlphaVax, which develops a proprietary viral vector gene expression system that supports innovative new vaccines in diseases, including AIDS and cancer.
Grants depend on F&A funds.
Since 1997, when we began receiving the full measure of our F&A reimbursements, total research funding has accelerated. F&A funds help us keep the research enterprise growing in ways that yield value to North Carolina. At Carolina, this enterprise attracts more than a third of the University's budget — $577 million in 2004. Many funding agencies require us to commit our resources to match some portion of the money received for a grant. Without F&A funds for this purpose, the University would lose many of the big grants that support our research programs and enhance the education of our students.
Figure
1. Extramural funding, UNC-Chapel Hill, 1976 to 2004. UNC-Chapel Hill began
receiving the full measure of our F&A reimbursements in 1997, leading
to the acceleration of total research funding.
Employees Depend on F&A Funds.
Figure
2. North Carolina counties with UNC-Chapel Hill employees paid from F&A
funds.
In January 2005, 995 Carolina employees were paid at least in part from the $24.4 million in F&A funds devoted to salaries campuswide. These salaries represent a $24.4-million impact on the state's economy. More importantly, they support a great many tax-paying employees and their families. These employees, who live in 43 North Carolina counties, are vital to our programs in research and education.
| Employees paid from F&A funds (January 2005). | ||||
|---|---|---|---|---|
| Employee Category | Permanent | Temporary | Total | Salary Costs |
| Faculty | 27 | 0 | 27 | $1.1 mil |
| EPA Non Faculty | 97 | 107 | 204 | $6.7 mil |
| SPA | 622 | 142 | 764 | $16.5 mil |
| TOTAL | 746 | 249 | 995 | $24.3 mil |
Service depends on F&A funds.
F&A funds help support a number of public-service projects of demonstrated value to the state. Here are just a few examples:
- Health: development of the "The Virtual Lung," a computer-based simulation that helps scientists model diseases such as cystic fibrosis.
- Environment: research and monitoring to enhance and protect fisheries, coastal resources, water quality, and mountain forests.
- Public health: studies of genetic abnormalities caused by viruses such as influenza, research into the relationship between influenza and nutrition, and investigations of racial and ethnic factors in health care.
Research compliance depends on F&A funds.
In many cases, F&A-funded employees provide services required by state or federal law. We estimate that the total campus F&A expenditure for the administrative activities necessary for research compliance is at least $3.7 million a year. For example, staff paid from F&A funds monitor the use of human subjects or laboratory animals in research, satisfying federal mandates. F&A-funded employees also administer research contracts and grants, fulfill reporting requirements, report and license inventions, create start-up companies, and help manage offices and labs. Without these employees, the University could not meet its legal obligations.
Projects under construction depend on F&A funds.
Several building projects now under way or recently completed depend heavily on F&A funds. Here are several examples:
- Science Complex, Phase I: $55 million from state and state bonds, $26 million from university bonds, $21.8 million from private fund raising, $12.3 million from F&A funds.
- Genetic Medicine: $9 million from the department (including F&A), $82.4 million from university bonds, $18.5 million from private fund raising, $16.5 million from F&A funds.
- Global Education Center: $20 million from state bonds, $5.8 from university bonds, $5 million from private fund raising, $5 million from F&A funds.
- Public Health Teaching & Research Center: $13.4 million from state bonds, $16 million from university bonds, $10 million from private fund raising, $6.4 million from F&A funds.
These projects successfully leverage public-private partnerships that attract private donations and increase the impact of public funds. And each of these buildings will house research programs designed to improve our citizens' health and quality of life.
Future capital projects depend on F&A funds.
In the bond referendum of 2000, UNC-Chapel Hill received $500 million for capital improvements, including badly needed buildings whose total projected cost will be $985 million. A large share of the construction costs for these projects—as well as the equipment needed to make them functional—will be covered by F&A funds. Our plan for paying for these projects assumes a stream of F&A revenues increasing at an average rate of 5 percent per year. In other words, our construction commitments are based on the assumption that our current F&A revenues will increase, not decrease.
Figure 3. Funding sources for all current construction projects at UNC-Chapel Hill. Departmental sources include F&A funds, and F&A funds will backstop fund-raising shortfalls.
Equipping new buildings depends on F&A funds.
Campus buildings, especially science buildings with high-tech laboratories and instruments, are expensive to furnish and equip. New buildings require an estimated 5-10 percent of the construction cost in additional funds to outfit them in ways that would maximize their potential. At Carolina, most of that investment will come from departmental sources comprised primarily of F&A funds.
Teaching depends on F&A funds.
Without F&A funds, it would be almost impossible to train students in the technical disciplines. Training graduate students is a primary reason for university research, and undergraduates learn by experiencing first hand the process of discovering new knowledge. Thirty percent of Carolina's graduating seniors report they were involved in a research project. In the last year, applications for undergraduate summer research fellowships have doubled. Despite more than $180,000 per year in private support, the Office of Undergraduate Research can only fund about 30 percent of those students who apply. Many students publish their findings in top-rated journals, and faculty report that pilot projects by students often lead to external research grants. This year, F&A funds will pay about $10,000 for undergraduate fellowships. More funds are needed.
In fiscal year 2004, F&A funds also supported several special initiatives, including the Future Faculty Program, the Academy of Distinguished Teaching Scholars, the TA Development Program, and programs that support science and public-health education.
Libraries depend on F&A funds.
Carolina's libraries use F&A funds to maintain facilities and obtain subscriptions to electronic databases and scientific journals for faculty and students. The Health Sciences Library spends more than $110,000 in F&A funds each year for acquisitions. F&A funding has also been used to purchase a new Integrated Library System and to complete the library's renovation. The Academic Affairs library spends $130,000 a year in F&A funds for facilities upkeep and $225,000 a year for library materials used primarily to support research. The Academic Affairs library also received one time F&A funding of $50,000 for the start-up operating needs for the Sonja Haynes Stone Center for Black Culture and History Library. These resources help Carolina compete for external funding.
Start-ups for new faculty depend upon F&A funds.
New faculty members require start-up funds to relocate, set up their laboratories, buy computers and software, obtain research animals and supplies, and conduct preliminary studies that lead to major grants. Without sufficient start-up packages, it is virtually impossible to attract top faculty to Carolina. In fiscal year 2004, the university spent more than $8.5 million in F&A funds on start-up packages for 96 new faculty members. In addition, schools contribute, drawing on their own allocations of F&A funds. Allocations for start-ups in the School of Medicine totaled $1.49 million for 15 start-ups. Allocations for start-ups in the College of Arts and Sciences totaled $5.5 million. In the sciences, the total cost of a start-up package can reach $500,000.
Innovation depends on F&A funds.
A small investment in seed funding can help a faculty member land a big grant or launch new research. Most of these seed grants are provided through F&A funds. Here are just two examples:
- The university used $100,000 in F&A funds to develop large-scale proposals to the National Institutes of Health under the "Roadmap" initiative. Carolina researchers won three of only 21 grants awarded nationally. The grants will be used to plan major research centers in obesity, inflammation, and genetic analysis.
- The university committed $15,000 in F&A funds for the Citizen Soldier Project, successfully leveraging federal funds for a national initiative to improve the lives of U.S. Reserve and National Guard families when members are on active duty.
^ to top
More Information and Downloads
- Download this page as a PDF [1.2 MB].
- Download a related factsheet from the office of the UNC System President.