Reply to ‘The new project fee – a boost or a hindrance?’

First and foremost, I would like to thank Joe and Marie for bringing attention to an issue that concerns many employees at the University. I fully understand that a change in project fees can cause confusion at the University. My message to Joe, Marie and others is that there is no need to worry.

The new project fee at SDU is based on an agreement between the universities and several private foundations, according to which the foundations will cover more of the indirect costs of a project via a project supplement. Typically, a research project has indirect costs equivalent to 50–60 øre per research krone. Until now, when a university has not received coverage of a project’s indirect costs, the university has used money from the its annual grants in the Finance Act to cover the indirect costs of the research projects.

When foundations provide overheads or a project supplement as part of a research grant, the University can use these funds to release Finance Act funds that have previously been tied up to cover the lack of coverage of indirect costs. The released Finance Act funds can then be reallocated to the faculties via SDU’s budget model. The faculty can use the Finance Act funds, for instance, to employ assistant, associate and full professors.

If SDU does not ensure better overall coverage of indirect costs on research projects, the University will tie up even more Finance Act funds in co-financing research projects in the future as SDU secures more research funding. It is therefore due diligence to ensure a better balance in university finances with the new project fee.

At SDU, the Executive Board has decided to implement the new agreement by changing the project fee as of 1 January 2026 by increasing the project fee itself combined with the introduction of a new calculation method. At the same time, SDU’s 2026–2029 budget assumes that the extra project fee resulting from the new model will be returned 100% to the faculties.

SDU’s estimates show that the effect of the new project fee and the redistribution of released Finance Act funds to the five faculties will be largely neutral – with minor pluses/minuses in individual years.

It is a matter for each faculty to determine what the increased project fee means for its departments and research groups. The dean decides how the released Finance Act funds will be distributed among the departments, and the heads of department decide how received overheads/project supplements and received Finance Act funds will be allocated at the departments. In SDU’s budget model, the project fee is not settled with the individual research group but with the department.

Joe and Marie ask if most applications will be directed to foundations that include overheads and project supplements in their grants, if the project fee will have an uneven impact among research groups, and if foundations that do not include overheads or project supplements in their grants will not be applied to at all. Applications for research funding should be driven first and foremost by research relevance and not by whether overheads or project supplements are included in the grant. There are many great opportunities to apply for overheads and project supplements, and of course it makes sense to utilise these opportunities if you are applying to a foundation. If it is not possible to get overhead and project supplements, the department (or faculty) will still have to finance the project fee, which the head of department or dean can decide to make room for in the local economy. In other words, management can actively decide to promote applications to foundations that do not provide overheads or project supplements. The head of department will still have to approve project applications and thus approve both the research relevance and the financial aspects.

In their column, Joe and Marie list different calculation examples. In several of the examples (the Fabrikant Mads Clausen Foundation and the Marie Curie Fellowships) it may be academically relevant to apply, as mentioned above. The head of department or dean can actively decide to fund the project fee, even if there is little or no overhead/project supplement on a grant.

In the example of DFF – and in the case of other public foundations – overheads of 44% are already being granted. These overheads should not be used to fund research but to cover indirect project costs, so Joe and Marie’s claim that there will be DKK 140,000 less for research is not correct. With the new project fee, there will still be 24% allocated to the department, and the faculty will also receive a redistribution of Finance Act funds.

In the example regarding Novo Nordisk Fonden, which grants no project supplement for equipment and infrastructure, this is a real issue. On the one hand, Universities Denmark raise the issue in their dialogue with NFF and the other foundations. On the other hand, SDU’s Executive Board will discuss whether an infrastructure pool should be established at SDU, which would also cover all/part of the project fee on special infrastructure grants.

The example regarding foundations with whom no project supplement has been agreed on, features very large grants of DKK 25 million and with DKK 5 million in project fees. At SDU, it is already possible to cover co-financing costs for very large grants via the Executive Board’s Strategic Pool (DSP). In the coming period, SDU’s Executive Board will discuss whether more funds should be reserved in the DSP to cover co-financing as SDU is receiving more large grants.

In conclusion, I would like to reiterate the main message: nobody has any reason to worry. It is fundamentally positive that there will be better coverage from the foundations of the derived project costs, which means that old imbalances in the overall research funding system in Denmark can be corrected. At the same time, we see a significant development in private foundations’ distributions of funds in the coming years. Overall, there will be more money for research at SDU.