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Prior to 1988, private and non-VA federal funds available to support VA-approved research could be administered only through the General Post Fund (established primarily to give gifts to veterans and to administer their bequests) which has restrictive policies regarding transfers of funds. Alternatively, non-VA funds were administered by an affiliated medical school which significantly reduced the amount available for research projects by charging substantial "overhead" rates and retaining such amounts for university purposes.

 In 1988, Congress passed United States Public Law 100-322, Section 204. This legislation broadened VA's ability to conduct research by authorizing the establishment of nonprofit research corporations (NPCs) affiliated with VA medical centers and, through these corporations, opened the door to new sources of research funding. VA has separate, state-chartered corporations scattered throughout the country, each of which can be scrutinized by several levels of federal investigators at any time.

Legislation passed by Congress on November 16, 1999 expanded the authority of the NPCs to include education as well as research, allowing NPCs to administer education funds and activities. VA regulations require that expenditures by an NPC must support research or education. Within this principle, the NPCs have tremendous latitude in how they serve their affiliated medical centers and principal investigators. Low administrative overhead charges and a high level of service-quick turnaround on hiring personnel, processing paperwork, and ordering supplies and equipment-are major features of the NPCs.

However, many NPCs do much more to promote research. Several have established fully functioning clinical research centers within their VA medical centers to increase efficient management of clinical trials. One has hired a cadre of clinical research nurses who assist principal investigators with all aspects of studies from preparing the grant proposal through submission of the final study results. Others facilitate identification of research sponsors and grant-making organizations, and make the initial contact on behalf of the investigator. Many provide seed funding and bridge money to investigators. Several sponsor year-round or between semester research internships and mentoring programs for local college students.