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Business travel and professional development — considered “non-essential expenses” — are usually prime targets for cutting when higher-education budgets are tight.
The Department of Government Efficiency (DOGE) cost-efficiency initiative executive order includes a section for “Non-Essential Travel Justification”: “The Agency Head shall prohibit agency employees from engaging in federally funded travel for conferences or other non-essential purposes unless the travel-approving official has submitted a brief, written justification for the federally funded travel within such system.”
Recently, the American Council of Education and the Carnegie Foundation published the 2025 Research Activity Designation. The designation that matters most is Research 1 (R1) institutions and universities, which traditionally receive significant federal funding —at least $50M in research spending. There are 187 R1 universities in 2025, up from 146 R1 institutions in 2021.
We’ve analyzed the audiences of dozens of large meetings with significant attendance from colleges and universities. For many of these meetings, more than half of their attendees (including graduate students) come from R1 universities.
The Primary Threat
While it appears that federal research funding will continue, one of DOGE’s targets seems to be to cap indirect costs included in a grant — which include such expenses as utilities and laboratory maintenance — at 15 percent. Which would seem to make sense on the surface because the 15-percent cap is a common practice of private funding bodies, like the Gates Foundation and The Rockefeller Foundation. But many R1 universities negotiate the indirect expenses to be much higher — 25 percent or more of the grant funding. That means R1 universities are getting a really big haircut that will have a trickle-down effect on travel to conferences and even association memberships. The fact that the number of R1 Institutions has increased from 146 to 187 in four years is another data point that certainly would get the attention of any audit.
Associated Press recently published a story on how this may impact Duke University, whose current “indirect costs” rate is 61 percent — cancer and neurology research facilities and lab equipment are costly. Last year, Duke received $580M in NIH grants and contracts. With the new cap on indirect costs, my back-of-the-envelope calculation estimates that Duke could receive about $265M less in funding for the year.
Business travel and professional development — considered “non-essential expenses” — are usually prime targets for cutting. There likely won’t be as much of an impact in the first half of this year but its negative effects on attendance and financial performance of meetings thereafter could be significant.
In other words, this could hit our industry fast and hard — and have broader repercussions throughout society. A recent Forbes article said it best: “It takes relatively little time to tear down the academic science enterprise, a system that’s been key to the country’s decades-long leadership in science, medicine, technology, and business innovation. But it will take much longer to build that enterprise back, putting the nation at risk for economic decline, weakened security, impaired health, and a poorer quality of life.”
Early Indicators
The stock market doesn’t like uncertainty. Ditto for the business events industry. Some of the early indicators to help monitor how this executive order may be having a measurable impact on meetings with high attendance from the government and/or the academic sector include:
- Last-minute cancellations from both registrants and speakers
- Decline in abstract submissions
- Lower association member renewal from academia — professionals and students
- Resignations from committee or task forces
Dave Lutz, CMP, is managing director of Velvet Chainsaw Consulting
On the Web
Read how major universities like Cornell and Stanford are reacting to expected funding cuts.