Financial pinch. A declining stock market has shrunk Hughes’s endowment, leaving it with less money to support investigators such as Berkeley’s Carolyn Bertozzi.

Howard Hughes Feels the Pinch

The U.S. economic slump has hit the lab bench. A major blow landed last week, when the Howard Hughes Medical Institute (HHMI), one of the world's largest private research philanthropies, confirmed that it will trim spending by about 10%, or $100 million, over the next 2 years.

“The great expansion is over,” says HHMI president Thomas Cech. “We're spending too much, so we have to make some hard decisions.” HHMI's endowment has shrunk to about $10 billion from $13 billion in 2000, according to Cech. As a result, it no longer produces enough income to cover the institute's annual spending, up 60% since 1996 to nearly $700 million for the fiscal year that ended 30 September.

To pare back, HHMI's governing board started at home. It has cut this year's administrative budget by about 6%, or $3.5 million, and frozen hiring at its Chevy Chase, Maryland, headquarters. “You have to clean your own house before you ask others to do the same,” says Cech. But most of the savings will come out of the institute's prestigious $442 million biomedical research program, which currently supports about 330 investigators and their 3000 staffers. The investigators, who are employed by HHMI but work at universities, will have to cut spending by up to 10% annually in 2003 and 2004. The average investigator receives $500,000 to $1 million a year in support for 5 years, renewable after a rigorous review.

To soften the blow, HHMI is allowing investigators to squirrel away spare cash saved over the next 8 months. Researchers will also be able to plead their case to HHMI officials, who will decide budgets on a case-by-case basis. “It might be a mistake to make an early-career investigator take as big a cut as a more mature investigator,” says Cech. If the cuts succeed, Cech says, the result should be a budget that can accommodate a new class of investigators within a few years. But he expects the steady-state number of investigators to be about 300, down from a high of about 350 last year.

Researchers are bracing themselves. Organic chemist Carolyn Bertozzi, an HHMI investigator at the University of California, Berkeley, says she's already cancelled some expensive service contracts, stopped paying some travel costs for job candidates, and plans to reduce the size of her 34-member research group through attrition.

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