Startup Funds That Expire On Grant Award

Jul 11 2018 Published by under Academics, Ask DrugMonkey, NIH Careerism

From the email bag:

My question is: Should institutions pull back start-up funds from new PIs if R01s or equivalents are obtained before funds are burned? Should there be an expiration date for these funds?

Should? Well no, in the best of all possible worlds of course we would wish PIs to retain all possible sources of support to launch their program.

I can, however, see the institutional rationale that startup is for just that, starting. And once in the system by getting a grant award, the thinking goes, a PI should be self-sustaining. Like a primed pump.

And those funds would be better spent on starting up the next lab's pump.

The expiration date version is related, and I assume is viewed as an inducement for the PI to go big or go home. To try. Hard. Instead of eking it out forever to support a lab that is technically in operation but not vigorously enough to land additional extramural funding.

Practically speaking the message from this is to always check the details for a startup package. And if it expires on grant award, or after three years, this makes it important to convert as much of that startup into useful Preliminary Data as possible. Let it prime many pumps.

Thoughts, folks? This person was wondering if this is common. How do your departments handle startup funds?

10 responses so far

  • qaz says:

    I'm sorry, but that's insane. I have never heard of any university doing this.

    1. This punishes a lab for getting funding.

    2. As everyone knows, it is even harder to get funding renewed. You need this money to carry you through the next gap.

    3. Furthermore, as everyone knows, federal funds are limited in what they can be used for. There are many situations where a little bit of truly fungible money can make all the difference in a lab's success.

    4. The idea that people try harder when their back is against the wall is wrong. When people have their back against the wall, they get desperate and do stupid things that cost them. Actually, people try harder when they have safety nets. Success comes from risk. People take risks when they have a safety net. Take a look at work on scarcity in both human and non-human animals. Scarcity drives sub-optimality in every experiment I've ever seen.

    But I come back to my most important statement.

    1. This punishes a lab for getting funding. If a university were smart, they would add a bonus to startup when a lab gets an R01.

  • lojidegari says:

    My institution sets an expiration date on the startup: 3 years. It even sets expiration dates on when salaries/stipends can begin (i.e. can't start paying a grad student in year 3). I would actually prefer it if the startup were instead pulled upon a funded R01. Right now, my back isnup against the wall. Will I be out of funds in year 4? I'd be more than happy to give up funds in year 2 if I had an R01.

  • Jim Woodgett says:

    I think it's OK to step down start-up support to a degree as grants are awarded as this does free up what is usually a very limited resource for future recruitment (and emergency support for established scientists "in between" grants). But the devil is in the details. How much to claw back? What sort of awards? Value-based?

    Start-up funds also play a major role for new investigators to plan their budgets and who doesn't want to have an insurance fund for when times get tight (though this is surely more efficiently done centrally)? The fact is, most people don't have this luxury and despite careful budgeting, get left high and dry.

    If the terms are clearly laid out at the time of recruitment, the PI can assess whether a claw back upon external funding or expiration is justified (I don't think expiration dates make a lot of sense if there is some clawback). There is plenty of incentive to bring in external awards. No one gets promotion based on how much they've left in the start-up account. And perhaps a recruit may appreciate a department that looks to parse funding for future recruitment and support of colleagues as a significant benefit?

  • zb says:

    "4. The idea that people try harder when their back is against the wall is wrong. When people have their back against the wall, they get desperate and do stupid things that cost them. Actually, people try harder when they have safety nets. Success comes from risk. People take risks when they have a safety net. Take a look at work on scarcity in both human and non-human animals. Scarcity drives sub-optimality in every experiment I've ever seen."

    I think a misunderstanding of the reality you describe here drives a lot of failures to address broken systems, from education, to drug addiction, to homelessness, to the academy and yes, grant funding.

    To implement this concept, that when one lab is well off, meeting goals, what you need is not to put people on the edge of a cliff, but to give them a safety net. Otherwise, they will, reasonably, try to build their own safety net by hoarding resources. So, in some theoretical world, redistributing startup funds, but, only because the department/university also promises to have the lab's back if they suffer a subsequent funding drought. Not the current funding model at universities.

    (Also, in my take an argument for why PI salaries should be backstopped, and not 100% or 90% or . . . . dependent on outside funds)

  • Draino says:

    My institution gives a large startup that is supposed to last five years, and you don't have to give it all back if you still have some at the end of five years. It goes into an account for emergencies, or opportunities, or trying risky new things. More money goes into that account each year, automatically, to cover the agreed percent of your salary, which is very nice. Also, if you bring in lots of indirect costs, the annual gift gets larger, as a bonus for helping the foundation. Again, the extra money is useful for emergencies, or opportunities, or trying risky new things. But we don't have tenure. It's a private research foundation. There's no teaching or clinic to justify those annual gifts and salary support if you don't have funding. So if you don't bring in grants, you won't be able to stay very long.

  • J. David Jentsch says:

    If a University wants to withhold start up funds initially promised for any reason other than a contractual breach by the hired faculty, that fact should be addressed in the offer letter that was signed by both parties prior to the engagement of employment. If the possibility of this is not so stipulated in the offer letter, the funds should not be reduced or removed for any reason. If I heard that my institution was trying to do this to someone - whether that be due to an undisclosed expiration date, the awarding of a grant, etc - I would oppose it with every bit of force that I could muster.

  • baltogirl says:

    My former department "disappeared" all startup funds when the first grant came in, while my current department has an eternal startup retention policy. (Even after ten years I had a few thousand in there -very handy for things that NIH grants can't cover!) In my former department new PIs naturally spent their startup funds as fast as possible, so sometimes unwisely. In the current department, most new PIs who get funded seem to save this money for inter-grant emergency funding, risky ideas, or opportunities- (eg fantastic postdocs who unexpectedly write you that you have not budgeted for). BUT it can also get used for partial salary support if you can't make your percentage- that takes it down fast...!

    I understand why departments don't want to make startup eternal, both to fund new labs and because it is a budgeting nightmare- but it is really, really, REALLY good for the PIs. And generally what is good for the PIs is ultimately good for the department.

  • Almost tenured PI says:

    I have about 50% of my startup left after 6 years because I had success in getting grants and fellowships for my lab. The money gives me peace of mind, which allows for clear thinking. It also gives me the ability to allow rotation students to rotate regardless of whether my grants can cover them, because if they're good I'll just use my startup to pay them. It also allows us to buy new pipets or freezers when they break and to buy software and computers that NIH grants won't cover. If my startup had an expiration date, I certainly would have found ways to spend it, but I honestly don't think my science would have progressed any faster, and it would be seriously detrimental to my sanity to lose that safety net.

  • AcademicLurker says:

    My previous institution had a claw-back on receipt of external funding policy for startup funds.

    Fortunately, my startup was so small that it was almost all gone when I got my first R01. Win!

  • drugmonkey says:

    If a University wants to withhold start up funds initially promised for any reason other than a contractual breach by the hired faculty, that fact should be addressed in the offer letter that was signed by both parties prior to the engagement of employment.

    I think (?) in most cases I've heard of this that indeed it is stated policy. The kvetching is mostly about whether it *should* be, and if a given prospective hire can negotiate around it.

    In the minority of cases where I've heard or seen relatively arbitrary behavior on the part of the institution it tends to be "we're in dire straits so lets pull together chums" OR "hahahah, like you have any power eff you go ahead and leave".

    I mean yeah...sucky work situations suck.

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