Although the Federal government is presently the major sponsor of research and development (R&D) in the United States, in recent years the level of funding once obligated to basic research has declined. Academic institutions have increasingly relied on other sources of support for R&D because of a decline in the growth rate of federal, state, and local funds. A chart on 1976 federal R&D obligation by function indicates that although colleges and universities received 12 percent of the total federal R&D obligations, functionally R&D dollars are not translated to schools. Another chart on federal obligations by agency in 1975 shows that the top institutions receive more funds from a variety of agency-sources while other institutions receive funding almost exclusively from the Federal government. Federal R&D dollars appear to be distributed in an equitable manner to different types of schools. A large portion of R&D dollars in the United States is spent on applied research. There are a number of questions which should be addressed concerning the mechanism of allocations as related to federal/state problems of equity, and the problems of state and federal coordination as related to the ability of higher educational institutions to control their R&D programs. (SW)