Any reduction in the indirect costs NC State has earned and earmarked would have a devastating impact.

1. Indirect costs pay for themselves
   Indirect costs save taxpayers money. They have a multiplier effect: By wisely investing them back into the university's research enterprise, NC State can leverage nonappropriated dollars to support more research at no additional cost to North Carolina's citizens. For example, NC State recently used indirect costs to recruit new faculty members in the field of genomics. In one year, these researchers brought in more new research funding than the combined total of what was spent to recruit them. This research will, in turn, help the university attract additional funding and recruit and retain other top faculty members.
   
   
2. Indirect costs help create world-class programs and facilities
   The breadth and quality of research, teaching, service and extension programs across the university benefit from indirect costs.
   
   The existence and phenomenal growth of Centennial Campus, a national model for university-industry-government partnerships, would not have been possible without the investment of indirect costs. The General Assembly has allowed NC State to use tax-exempt revenue bonds to finance research buildings on the campus -- buildings that provide the classroom and laboratory space our world-class College of Engineering needs to grow. The security for these bonds is the rental stream from indirect costs. (Our government and industry partners are in buildings leased to them by the university or a private developer. All partners and developers must pay full costs and all state and local taxes.)
   
   Without indirect costs, the future of Centennial Campus, as well as the future of the entrepreneurial spirit that drives the campus, is severely threatened.
   
   
3. Indirect costs boost North Carolina's economy
   External grants and the indirect costs that accompany them are the fuel that drives the NC State research enterprise -- an enterprise that accounted for $170 million last year in external support and has a significant impact on the state's economy.
   
   The companies and jobs created by the research enterprise give North Carolina a distinct economic advantage over neighboring states, and the state has emerged as a leader in biotechnology, microelectronics and other new technologies.
   
   
4. Indirect costs foster entrepreneurial spin-offs
   The facilities and services paid for by indirect costs enable NC State's researchers to create the technologies that ultimately mature into spin-off and start-up companies. NC State is the birthplace of more than 38 new companies in the past eight years and currently ranks fourth nationally in the number of startup companies arising from university research.
   
   One of our best-known spin-offs, Cree Research, is a world leader in the production of electronic devices made from silicon carbide. In the company's early development, however, its researchers lacked a laboratory where they could produce devices to demonstrate to potential investors. Luckily, they were able to use NC State's microelectronics lab, which was established and supported by indirect costs. The result: They secured the venture capital they needed, and Cree, one of the Triangle's most successful start-ups, was launched.
   
   
5. Indirect costs help us retain and recruit top researchers and teachers
   Recruiting and retaining the best faculty is essential for providing students with top-quality education to prepare them for leadership roles in today's knowledge-based economy.
   
   
   • Using indirect costs, NC State was able to recruit Dr. Ralph Dean, one of the world's top experts on fungal genomics, and to build the state-of-the-art Fungal Genomics Laboratory where he and his staff conduct their research aimed at protecting the world's food supply. Since arriving in 1999, Dean has brought in more than $11 million in research grants -- paying for our investment to recruit him many times over.
   
   
   
   • Using indirect costs, NC State was able to retain Dr. Ron Sederoff, one of the world's top experts on forest biotechnology and a member of the National Academy of Sciences. Sederoff's work on pine genetics is helping improve the productivity and environmental sustainability of southeastern forests. NC State used indirect costs to help build a new $3 million Forest Biotechnology Laboratory for his research team -- a lab that helped convince him to remain at NC State despite an outside offer. By the time the lab was opened in July 2000, Sederoff's team had parlayed its new resources into a three-year, $4.4-million grant from the National Science Foundation. The investment paid off -- for NC State and the southeastern timber industry.
     
     
   NC State also has used indirect costs to recruit a top engineer from MIT; to retain one of the world's premier computer engineers; and to recruit two new world-renowned geneticists to the College of Veterinary Medicine, where they will lead efforts to create transgenic pigs for use in veterinary and human medicine.
   
   For more examples of the type of top researchers the university is recruiting and retaining through indirect costs, check out Results, NC State's online research and graduate studies newsletter.
   
   
6. Indirect costs help fund research that improves quality of life
   Indirect costs have benefits that reach far beyond the boundaries of campus.
   
   
   • About $500,000 in indirect costs has been used to support a new lab for X-ray crystallography. Researchers are using the crystallography to help develop drugs to control viral and bacterial infections, and to devise new strategies for the production of vaccines against viral diseases in humans and domestic animals.
     
     
   • Indirect costs have enabled the Department of 4-H Youth Development to expand its efforts in workforce preparedness, after-school programs, migrant education and job-hunting services for the state's Hispanic population. More than $100,000 in indirect costs was invested into the program to train field faculty who, in turn, will provide training to thousands of North Carolina families and consumers on topics including nutrition, food safety, aging, care giving, health, housing and disaster preparedness.
     
     
   • At NC State's Genome Research Laboratory, indirect costs help pay the bills for research aimed at creating new, high-value products for North Carolina agriculture. Studies are now under way to produce pharmaceutical and nutriceutical proteins from tobacco plants; develop sweet potatoes that can serve as a source of bio-based fuel; improve the germplasm for regionally adapted varieties of corn; and develop a new type of bacteria that improves dairy fermentation. In addition to helping pay for lab facilities, staff and supplies, indirect costs are helping to defray the administrative costs of workplace safety programs, animal care and hazardous waste storage.