In June 2025, a group of National Institutes of Health (NIH) employees signed what they called the “Bethesda Declaration,” a letter of protest criticizing recent budget reforms and staffing decisions imposed by the Trump administration and current HHS leadership. Signed by researchers across all NIH Institutes and Centers—some anonymously, others publicly, including a handful of Nobel laureates—the document lays out a series of objections to what the authors describe as politically motivated interference in science and a threat to public health research.
But while the declaration makes emotional appeals about the value of scientific discovery, the financial reality behind the protest reveals a different picture—one grounded in routine budget reform, cost containment, and oversight that many argue is long overdue.
What Are NIH Scientists Protesting?
The Bethesda Declaration outlines several main grievances:
- Peer-reviewed grants being pulled from funding after scoring well,
- A proposed blanket 15% cap on indirect costs (down from negotiated rates often exceeding 50%),
- Staff layoffs and departmental restructuring that the authors claim have slowed science,
- An overall reduction in NIH spending that they argue violates the agency’s duty to use its full Congressional appropriation.
The letter accuses HHS officials of “redirecting funding to unvetted projects,” citing the administration’s support for a universal flu vaccine pilot as an example. It further warns that the indirect cost cap would “risk the viability of universities and hospitals” that depend on NIH grants to fund not only lab research but also administrative and infrastructure costs.
Understanding NIH Indirect Costs
When the federal government funds research through agencies like the NIH, the money is typically divided into two parts: direct costs and indirect costs.
- Direct costs cover expenses that go straight into the research itself—things like lab supplies, salaries for research staff, software, and data collection.
- Indirect costs, sometimes called overhead, cover everything else that keeps the institution running: building maintenance, electricity, HR, accounting, and administrative support.
Large research universities had traditionally been allowed to negotiate their own indirect cost rates with the federal government, often securing reimbursements between 40% and 60% of their direct costs. Some elite institutions, like Harvard and Yale, had received even more. Nationwide, NIH reports that the average effective indirect reimbursement rate across all grantees is around 27–28%.
Say a university has $500,000 in direct research costs. Under the previous system, it might have negotiated a 60% indirect rate, and NIH would have added another $300,000 for overhead—bringing the total grant to $800,000. Under the new policy, the indirect rate is capped at 15%, meaning that same grant would come with just $75,000 for overhead, for a total award of $575,000.
This policy change is at the center of the current dispute between NIH leadership and many of its researchers and partner institutions.
The Numbers Behind the Outcry
At the center of the Bethesda Declaration is a policy change that imposes a flat 15% cap on indirect costs—a category of overhead expenses that includes administrative salaries, utilities, building maintenance, and other institutional costs not directly tied to research.
Prior to this change, the NIH allowed research institutions to negotiate their own indirect cost rates, typically between 40% and 60% of direct costs. Some elite universities—including Harvard (69%), Yale (67.5%), and Johns Hopkins (63.7%)—secured even higher rates. These figures applied to Modified Total Direct Costs (MTDC) and added up to billions in overhead reimbursements annually.
According to NIH’s own guidance published in 2025 (NOT-OD-25-068), the average effective indirect cost reimbursement across all institutions has historically been between 27% and 28% of total grant funding. That means the new 15% cap represents a reduction of roughly 12 to 13 percentage points—or, put another way, a drop of less than half in average indirect reimbursements.
NIH’s notice also includes a telling comparison: most large private foundations already enforce far stricter caps. A table of benchmark caps listed by NIH shows that:
| Foundation | Max Indirect Cost Rate |
|---|---|
| Gates Foundation | 10% |
| Smith Richardson Foundation | 10% |
| Moore Foundation | 12% |
| Robert Wood Johnson Foundation | 12% |
| Chan Zuckerberg Initiative | 15% |
| Packard Foundation | 15% |
| Rockefeller Foundation | 15% |
By capping indirect costs at 15%, NIH is now simply matching the most generous private-sector limit. Yet the Bethesda Declaration frames this policy change as an existential threat to science—ignoring the fact that most private funders of medical research operate under even stricter limits, with no equivalent outcry.
In other words, NIH isn’t being gutted—it’s being brought in line.
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10 Real NIH-Funded Projects That Sparked Scrutiny
Amid budget tightening, critics have pointed to specific grant examples that raise questions about spending priorities. These include:
- $215K for a transgender voice-training app.
- $370K to infect beagles with parasites to test an experimental drug.
- $371K to study whether mothers love their dogs more than their kids.
- $387K for Swedish massages on rabbits to study stress.
- $417K for “energy healing” therapy studies on HIV patients.
- $533K on meditation tied to Buddhist texts.
- $1.5M for a smartphone game addressing picky eating in children.
- $2.4M to study gambling behavior in monkeys.
- $2.84M to inject steroids into hamsters and force them to fight.
- $10.9M to insert marbles into cats’ rectums and shock them until they defecated.
While some of these were part of broader research agendas, many produced inconclusive or negative results. Others were criticized for duplicating existing studies or pushing into ideological or pseudoscientific territory.
A Broader Government Effort
Importantly, NIH is not the only agency affected by these reforms. Similar caps and accountability measures have been proposed across research-intensive agencies like the National Science Foundation (NSF) and the Department of Defense (DoD). However, a federal judge struck down NSF’s 15% cap in June 2025, calling it “arbitrary, capricious, and contrary to law.” The NIH policy remains in effect—for now.
That hasn’t stopped institutions from pushing back. Research universities warn of hiring freezes, lab shutdowns, and reduced capacity to train graduate students. Lawsuits are underway, and lobbying efforts have ramped up to pressure Congress into reversing the cap.
The Central Question
What the Bethesda Declaration never fully confronts is whether the current system of grant funding delivers value for taxpayers. If a university receives $50 million in grants, but only $25 million goes to direct research, is that sustainable?
Supporters of the reform argue that research institutions—particularly large, well-endowed universities—have grown accustomed to a flow of overhead subsidies with little fiscal accountability. Opponents say the cuts threaten innovation and long-term progress in medicine.
For now, the NIH leadership remains caught between the administration’s demand for fiscal restraint and internal pressure from scientists claiming that even modest belt-tightening amounts to sabotage. As the federal budget heads into another contentious cycle this fall, the future of the 15% cap—and the NIH’s funding model—hangs in the balance.
Dave Soulia | FYIVT
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