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Foundation Relations

Indirect Cost Policies

Washington University campus
Most foundations with formal grant-making programs have a policy that states whether they will allow any portion of a grant to be allocated to indirect costs (overhead), and if so, what percentage of the budget is allowed. Since the indirect cost foundations allow is usually lower than the university’s actual costs, faculty are required to request the maximum allowable indirect costs.
A typical range for foundations that do fund indirect costs is between 10 percent and 20 percent, but the policy for each foundation, and every RFP, should be verified and forwarded in writing to the Office of Sponsored Research Services, or OSRS, prior to internal budget approval.
It is important to abide by your school’s policy regarding proposed indirect-cost rates. Some schools require the dean’s approval for rates other than the government-negotiated indirect-cost rate.
Indirect costs are also known as Facilities & Administrative Costs (F&A), the term used by federal grant sponsors.

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