Memorandum to Mr. Fosdick re Fluid Research
The form of grant known as Fluid Research Fund has been in the majority of cases 
an appropriation over a period of years and often on a tapering scale to a university for defraying the expenses of various research projects in one or another of its faculties, or in some general field analogous to the interests of one or another of the divisions in the Rockefeller Foundation.  The projects, usually selected by the Dean and a special Faculty Committee, are not ennumerated or described to the Rockefeller Foundation in advance. The purpose of the fund is to provide to the university a fluidity or ease of manoeuvre in the support of the best available local research projects, and to stimulate interest in research.  It is not a form of grant that has had much if any application outside North American institution; nor has it been increased during the past two years as a Foundation activity.
Historically the Fluid Research Fund would appear to occupy a transitional position between the  time when the Foundation's interests were largely in terms of teaching institutions as such, and the later developments of our emphasis upon defined fields of research.  The order of objectives was (1) effectiveness of institutions Anth for teaching without regard to research (2) support of any good research work in institutions Anth without regard to teaching (3) support of research work in subject I without regard to institutions. The Fluid Research Fund 
was launched in the intermediate period (2) and represented in many instances what was needed to get the well-trained personnel of reorganized faculties actually at research work - previous expenditures of the GEB and RF having been used to secure their salaries and/or provide adequate laboratories for them (cf. Rochester, Vanderbilt, Oregon, etc.).
The advantages of this form of support to research work are numerous if it is conceded that good research work as a university activity deserves stimulation and support regardless of what subject is investigated. The advantages of a Fluid Research Fund are:
1. It builds up and stabilizes the habit and desire in a faculty to do research work. This may go on to insistence that funds for research must exist or be provided as one of the essential expenditures of the university.
2. It sharpens the critical judgment and discrimination of professors and the university administation since it repeatedly poses the question of relative merit or probable excellence of performance in research of a number of applicants.
3. It is a marked stimulus to the effort and self-respect of the recipients  who feel that their peers or professional colleagues find them worthy of confidence
4. It has met what is at once the most constant need and the most probable source of individual and institutional pride, and is consequently a Foundation activity never likely to be criticized by the recipients in complete detachment of spirit.
5. It would be the universal testimony that Fluid Research Funds have been administered with a notable economy of time to Foundation officers and a high degree of supervision and control locally.
6. With the principal criterion in the local committees' mind being demonstrable excellence of performance, the Fluid Research Fund is better as an institutional support than as a tool for the advance of any particular field.  It would meet the greatest institutional needs in the U.S. in the years 1934-36 almost regardless of what faculty is involved.
The disadvantages of the Fluid Research Fund as given by the RF are:
1.Admirable as the taper system is in times of prosperity the present circumstances in American universities remove the possibility that tapering fluid research funds will be in most instances taken up by other supporters than the RF.
2. With awards given locally instead of by the National Research Council or some extra-university group, there is danger of insularity of judgment and personal issues interfering in the selection of recipients. European scientists have expressed fears of cliques and university politics if any such arrangement were tried in their 
institutions by the Rockefeller Foundation.
3. Fluid Research Funds are better considered as possible objects for endowment since such funds should be in the hands of the best universities.
4. They are too wide in application to be of particular value, however, in special programs, and are in a sense inconsistent with highly concentrated program.
5. Experience shows that existence of Fluid Research does not preclude requests for special funds.
Alan Gregg