Actually, I was confused by this question as well, and C was a very tempting answer.
Then, on second thought, A is right. If we go back to the passage, we will find that the university is supported "in part" by the foundation's grant. Then what happened was that the university only promised not to use the "foundation's money" to support weapons research. The passage thereby concluded that "the weapons research won't benefit from the foundation's grant."
There is a gap between "not to use the foundation's money" and "the weapons research won't benefit from it." Namely, the university could use the foundations' money to support humanitarian research, while diverting its own funding, originally for humanitarian research, to support weapons research. As a result, the weapons research can still benefit from the foundation's support, only "indirectly." And that's what A is saying.
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