The NIH is the federal steward of biomedical research in the United States. Taxpayers fund the NIH; the NIH supports research into the underlying biology, etiology, and treatment of diseases; and benefits of that research are returned to taxpayers. This is a large and complex enterprise, but at its core are two fundamental principles. The NIH is obligated to distribute its research grants and grant dollars in a fair and impartial manner among qualified investigators nationwide and to maximize the return on taxpayers' investments. But to meet these obligations, the NIH must establish a better-balanced distribution of funding among institutions. Here, I describe why such changes are needed and propose a specific mechanism for how they could be implemented. Diversity Matters The director of the NIH, Francis Collins, has recognized that "the US biomedical research workforce does not currently mirror the nation's population demographically" and that "recruiting and retaining a The NIH should rethink how it doles out funding. Studies indicate that research output does not grow linearly with the amount of research project grant support-and that the greatest rates of return are achieved with intermediate levels of funding. Image credit: Dave Cutler (artist).