Successfully raising third-party funds is a major prerequisite for highly innovative research that is internationally competitive. The DFG overhead allowance (Programmpauschale) is a key instrument to support research at universities in an unbureaucratic and direct manner.
Without this allowance, any indirect, additional and variable (overhead) expenditure in third-party funded projects that is not covered by direct project funding would have to be fully financed from universities’ basic funding. Paradoxically, this means that the more successful universities are in competing for third-party funds, the more limited their scope for action becomes.
In 2007, the DFG Programmpauschale (DFG-PP) was introduced as the second pillar of the Higher Education Pact to counter this effect. Up to 2015, the allowance amounted to 20 percent of funding spent directly. From 2016 onwards, the Länder have been contributing a share of two percent of the funds spent directly, and the overhead allowance increased to 22 percent.
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22 Billion
%
22 percent of project funds spent are covered by the DFG-PP.
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5,8 billion
€
5.8 billion euros were made available for the DFG-PP by the Federal Government between 2007 and 2023.
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0,3 billion
€
0.3 billion euros were provided for the DFG-PP by the Länder between 2016 and 2023.
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516 Million
€
516 million euros were provided by the Federal Government and the Länder for the DFG-PP in 2023.
On 1 January 2021, the DFG overhead allowance was integrated into the DFG’s institutional budget. The DFG implementing agreement stipulates that the percentage amount and the federal and Länder funding shares will remain unchanged until the end of 2025.
Between 2007 and 2023, the Federal Government provided a total of approx. 5.8 billion euros for the DFG-PP. As from 2016, the Länder had contributed just under 0.3 billion euros to the increase of the allowance. In 2023, the Federal Government and the Länder together provided a total of 516 million euros for the DFG-PP.
The university or research institution concerned takes its own decisions regarding the use of the overhead allowance while observing relevant legal requirements. The Federal Government and the Länder expect that the institutions ensure transparency in the use of the overhead funding through complete integration into their general budget as well as appropriate and transparent allocation. Since 30 June 2023, payment of the DFG-PP is dependent on the adoption of institutional guidelines for the verifiable use of the overhead allowance.
Development of the DFG-PP
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2007
Introduction of overhead allowance of 20 percent of the funds spent as the second pillar of the Higher Education Pact 2020. Funded solely by the Federal Government in the form of a special grant
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2016
The allowance is increased by two percentage points to 22 percent. The increase is financed by the Länder. Continued provision of the overhead allowance as a special grant under the Higher Education Pact III
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2021
After the expiry of the Higher Education Pact, its provisions concerning the overhead allowance were integrated into the DFG implementing agreement, thereby transferring overhead funding to the institutional budget from 2021.
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2023
Revision of DFG guidelines for the use of funds and introduction of a guidelines model for the use of overhead funds at funded institutions
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2026
The rate of the allowance and the funding shares remain unchanged until the end of 2025. Negotiations between the Federal Government and the Länder for the period after 2025.