What aspiring R2 universities need to understand before they build a growth strategy
HERD Is More Than a Number
What aspiring R2 universities need to understand before they build a growth strategy
For universities pursuing Carnegie Research 2 status, the Higher Education Research and Development (HERD) Survey can look deceptively simple: research expenditures go in, a number comes out, and the institution measures its distance from the $5M threshold. However, HERD is not merely an accounting exercise. It is an institution-wide litmus test of whether a university can identify, classify, document, and explain the research and development it actually performs.
Under the 2025 Carnegie Research Activity Designations, an R2 institution must report at least $5 million in total Research & Development expenditures and award at least 20 research doctorates. The expenditure measure is based on total R&D reported through HERD—not simply the value of external awards or the expenditures visible to a sponsored programs office. That distinction can materially change an institution’s understanding of its current position and its path forward.
The Common Misnomer
“HERD is our grant expenditures.” This shorthand is understandable, but incomplete at best. Externally sponsored research is important; however, HERD is also interested in internal institutional R&D expenditures – and this is where many universities miss out on capturing their full arsenal of support. Depending on the classification and accounting, these may include university research funds and startups, seed funding provided for research, and graduate research assistantships. Conversely, not every externally funded activity is R&D. Recently, through a conversation with a fellow colleague at another university, one of their faculty secured a $10M DOE grant and the university felt they were ‘set’ when submitting to HERD in January. Unfortunately, that impressive award is a training grant so the expenditures from that grant will not count towards their HERD numbers. This was not the information they wanted to hear, but they were appreciative to have the information now. Public service outreach, training grants, ordinary curriculum development, and other valuable sponsored activities tend to fall outside the HERD definition.
The better question is: Are we measuring the research our institution actually performs—or only the research activity that is easiest to see?
HERD Myth and Reality
MYTH
REALITY
A grant award increases HERD immediately.
HERD measures expenditures during the reporting period, not the face value of an award when it is received.
Only externally funded research counts toward HERD
Qualifying and separately accounted-for internal institutional R&D can also contribute to the total.
HERD is primarily about STEM.
Qualifying R&D can occur across education, business, communications, humanities, law, social work, and the arts, as well as science and engineering.
All sponsored project awards are research.
A grant number does not determine whether an activity meets the federal R&D definition.
The research office owns the number.
Reliable reporting depends on coordinated definitions, data, and documentation across research administration, finance, institutional research, academic affairs, colleges, and graduate education.
Why This Matters for R2 Strategy
A university can underestimate its research enterprise when qualifying internal R&D is fragmented across financial systems, coded inconsistently, or never surfaced beyond the college level. It can also overstate its position when sponsored activities are included simply because they carry an external funding source. Both errors weaken planning.
The strategic goal is not to “find” expenditures for the sake of a designation. It is to build repeatable institutional capacity: shared definitions, defensible decision rules, consistent account coding, cross-office reconciliation, and documentation that can withstand inquiry. The data beneath the label matter as much as the label itself.
Questions Leaders Should Ask
Do our financial systems distinguish qualifying R&D from instruction, service, training, and other sponsored activity?
Can we identify separately accounted-for institutional research, startup, and seed expenditures across every college?
Are academic units and central offices applying the same R&D definition?
Can we reconcile HERD reporting with finance records and explain the source of each major category?
Are we tracking expenditures—not merely proposals, awards, or budget authority—on the correct reporting timeline?
Does our R2 plan build durable capacity, or does it depend on a one-time threshold calculation?
Do we have a comprehensive, systemic platform for capturing all HERD data across the university?
A Practical First Step
Begin with a HERD data audit before setting the growth target. Map the institution’s research activity across funding sources, account structures, fields, units, and reporting offices. Test inclusions and exclusions against the federal definition, then document the decision logic. This creates a credible baseline for investment decisions and a clearer R2 trajectory.
Academic Advance Partners’ HERD Audit System is designed to help institutions conduct that disciplined review—surfacing qualifying activity that may be missed, flagging possible misclassification, and translating the findings into an actionable R2 growth strategy without substituting accounting creativity for sound documentation.
Selected References
Carnegie Classification of Institutions of Higher Education. (2025). Research activity designations FAQs. Available online
Harmon, P., McKnight, S., Hildreth, L., Godwin, I., & Greenwood, M. (2019). An alternative to the Carnegie Classifications: Identifying similar doctoral institutions with structural equation models and clustering. Statistics and Public Policy, 6(1). Available online
Kosar, R., & Scott, D. W. (2018). Examining the Carnegie Classification methodology for research universities. Statistics and Public Policy, 5(1), 1–12. Available online
Mohammadi, E., Olejniczak, A. J., Walker, G. E., & Nagarkatti, P. (2023). The impact of geographic inequality in federal research funding: A comparative longitudinal study of research and scholarly outputs in EPSCoR versus non-EPSCoR states. PLOS ONE, 18(6), e0286991. Available online
National Center for Science and Engineering Statistics. (2025). Higher Education Research and Development Survey definitions and instructions. National Science Foundation. Available online