Guidelines for Effective Cost Sharing
See below for:
This document was produced jointly with the UNO Strategic
Technology Planning and Implementation Group and the UNO Office of Research
and Sponsored Programs. Additional input was received from a variety
of sources prior to publication, including but not limited to Academic
Affairs, Financial Services, University Computing & Communications,
and Academic Deans.
The following is meant to provide a guide to both newcomers
as well as experienced grant applicants on the topic of cost sharing,
its basic purpose within grant applications, and its availability at
UNO. In all instances below, further direction can be obtained in consultation
with the Office of Research. This review is meant to create an awareness
of how cost sharing can be used as an effective device to increase your
chances of success with external funding requests. In particular, this
document is oriented toward those applications which are primarily technology
related.
What do we mean by "cost sharing" or "matching funds"?
When applying for external funds to perform research or
sponsored project the total cost of the project is considered to have
at least two components: that portion which will be covered by an external
private entity or public agency (federal, state or local); and that
portion which is covered by the University (sometimes in conjunction
with an external third party). The portion covered by the University
(sometimes in conjunction with an external third party) is considered
to be cost sharing or matching revenues, and is one type of indicator
of the University's commitment to the project.
Are cost sharing dollars "real"?
Cost sharing dollars are absolutely "real" and must be
"audit-able." Thus, UNO cannot allow for any proposal to be released
from the University without having signature approvals for all categories
of cost sharing revenues. Cost sharing can take the form of an actual
cash contribution (most common) and/or an in-kind contribution (very
rare). An example of cash cost sharing is faculty time available to
use in a specific project. An example of in-kind contributions would
be labor and equipment dedicated to a project by a private business,
when the University is applying for federal or private foundation revenues.
In the case of the latter, the source would have to provide a statement
as to the value they attach to this contribution.
Cost sharing (or matching funds) is usually expressed
as a combination of direct costs and indirect costs. Any institutional
contribution in the direct costs column, would also have indirects calculated
on that portion. The indirects calculated on the institutional match
are considered In-Kind Cost Sharing. The combination of the (Institutional
Direct Costs) + (Institutional Indirect Costs) constitute UNO's total
cost sharing or matching funds contributed to a project. Additionally,
in some instances (either because of an agency restriction or private
foundation policy) UNO is not able to collect its full Federally Negotiated
Indirect Rate (now referred to as Facilities and Administrative (F&A)
costs) on a project. For instance, U.S. Department of Education grants
are normally restricted to 8% Indirect rate. In these instances, UNO
is permitted to count the remaining uncollected portion as matching
funds, because it is forfeiting this part of potential revenues. This
portion of institutional contribution is considered In-Kind Cost Sharing.
You may check what UNO's current Federally Negotiated Indirect Rate
(F&A) is at this location:
In all cases, approval for any cost sharing from any source is reflected
by signatures on the UNO
Routing Form (available for downloading). In cases of cash, an account
number must be indicated. The funds remain in the original account, and
it is only expressed on this form for tracking purposes. For in-kind services,
provided the correct signatures are obtained, no account code is required.
When an award notification is received, the Office of
Research makes the stated cost sharing available to the PI by opening
an account and assigning a number. The PI is notified of his/her new
account. The stated cost sharing must be spent in the manner prescribed
in the proposal. If an award is less than the original funding request, the Office of Research will reduce its cost share commitment in proportion to the sponsor's reduction in funding, unless the funder stipulates that cost sharing must remain at one hundred percent.
Is cost sharing mandatory in order to get funding?
Many funding sources express their intent to solicit matching
funds as either mandatory (i.e. usually a minimum required percentage)
or voluntary (i.e. recommended, but there is no absolute requirement
in order to receive the funding). In studying actual funding patterns
of agencies, it is clear that it is more and more the expectation that
some form of cost sharing should occur in order to be competitive. In
other words, even if there is not a designated mandatory requirement,
the amount of cost sharing can influence an award when all other factors
are considered equal. Cost sharing is often regarded as an indication
of the institution's commitment to a project. Thus, we sometimes refer
to the degree of cost sharing as leveraging to increase the competitiveness
of any given grant application.
Is there a norm or recommended level that is preferred with cost sharing?
In many federal grant programs from major funding sources
like National Science Foundation and the National Institutes of Health,
mandatory or absolute cost sharing percentages have been reduced or
dropped as a specific requirement. However, the exception for most federal
agencies, technology-related grants, which continue to account for a
larger and larger share of our grant funding efforts, generally have
mandatory requirements of a minimum 33% cash match, and recommended
at around 50%. We consider a grant to be primarily "technology-related"
if 50% (or more) of the external funding source support goes toward
the purchase of computer and/or other technology or research-related
instrumentation. With some agencies, the required amount may even be
higher, such as the National Endowment for Humanities (Challenge Grants)
which require 75% match. The message is that if we are asking for federal
funding to do major technology purchases, the federal agencies expect
the university to help share the cost of these programs. This is reflected
in who successfully obtains these awards, as well as agency guidelines.
How much time does it take to gain cost sharing commitments?
As you'll see below, the levels and complexity of cost
sharing matching funds may vary extensively. In no case should one ever
assume agreement to any funds unless an approval signature has been
obtained, no matter what prior agreements exists on prior projects.
Each funding request is unique. Thus even if there was a prior arrangement
on the same proposal now being resubmitted to the same agency or a new
agency, a new approval must be obtained. Some of the sources listed
at the very end of this document are extremely complex arrangements,
and should begin with discussions with one's Dean. These types of complex
efforts would be required for instance, if one were pursuing a "centers
and institutes grant," or some very high level, extensive equipment
or instrumentation.
It is important to recognize that any commitments mentioned
in the proposal narrative that carry financial obligations, must also
be identified in the Routing Form with proper approval signatures supporting
them. On other less complicated projects, it is recommended that you
contact the appropriate approval source approximately 1 month prior
to the application deadline; and no less than 2 weeks prior to the deadline.
By allowing as much lead time as possible you are limiting the possibility
of having to completely restructure your budget totals at the very last
minute, if your request is not approved. As mentioned earlier, no approvals
should be assumed; each request is considered individually.
Potential Sources of Cost Sharing for UNO Projects
From year to year, the precise amounts and the protocols
for requesting these funds as part of external funding requests may
vary. However, this list and these short definitions will allow both
experienced and new funding applicants to understand what is potentially
available. These are generally listed in the order which they might
be requested. In other words, there is no formal rule as to how many
of these (if any) could potentially be leveraged on any one individual
project. In some instances the use of one source precludes the use of
another. In general this list is here to allow for more informed discussions,
as you approach the appropriate University administrators with your
cost sharing requests.
1. Faculty Time To Be Dedicated to the Project
This is the most common form of cost sharing at UNO, and
is an expectation on most projects, those which are technology-based
as well as those which are not. For instance, a request to fund summer
salary for a lead Principal Investigator would not be considered very
seriously by most research funding sources, if the faculty member has
no available time at all during the academic year to devote to the project.
The most common way that we calculate potential faculty time for projects
is that we consider every full time faculty member's time divided into
equal units (generally 4); and decisions governing how much of that
time is to be allocated to research, teaching and community service
is determined by one's Chair and/or College Dean. Thus, as an example,
if one is teaching two courses per semester, for accounting purposes
it is agreed that there are potentially two "units" available for other
duties, or, 50% of one's time (i.e. for research, other scholarly activities,
academic committees, community service etc.).
When applying for a grant, provided your Chair and Dean
are in agreement, you may be able to request part or all of the remaining
time as an investment in the project, as a primary form of cost sharing.
Sometimes this "available" time may also be broken into smaller increments
if that is reasonable and appropriate for the project, i.e. hour, day,
week or month. We use 180 days or 1,440 hours to represent one full
time academic year. For fiscal appointments, we use 260 days or 2,080
hours to represent full time. In all cases above, the base is the faculty
salary (either academic or fiscal); and whatever salary figures are
derived must have fringe calculated in addition to these are expressed
as two separate line items on the budget. You may check what UNO's current
fringe rate is.
Type of cost sharing: Cash
Required Approvals: Dean and/or Chair, with a General
Fund account number representing the salary line
2. Office of Research - Revenues from Indirects
It is appropriate to reinvest money the University receives
from funded research into future research projects. The Office of Research
makes every effort to redistribute these funds into projects in an equitable
fashion, taking into account College and Dean priorities, broad scale
directions of the university, potential for launching other successful
efforts, and other factors as appropriate.
Once approval has been obtained from the Office of Research
for cost sharing, it will most often permit these funds to be applied
toward the following budgetary items: travel, supplies (which includes
original software licenses), equipment and/or instrumentation, installation,
shipping and handling. In addition, the Office of Research will consider
assisting with: graduate student stipends, and UNO tuition; and in rare
instances, funding for a portion or all of a research associate. Cost
sharing for technology/instrumentation maintenance will be provided
subject to a written agreement concerning use, to be negotiated at the
time of approval between the Office of Research and the P.I. Maintenance
can include such items as equipment parts, labor associated with maintenance,
and software upgrade licenses. The level of cost sharing from the Office
of Research is usually based on the total cost of the project, the amount
of future Indirects the project will generate, and the other cost sharing
which is being committed from other sources (most often, faculty time;
and occasionally some cash from another source).
Type of cost sharing: Cash
Required Approvals: Vice Chancellor, Research and Sponsored
Programs
3. University Computing & Communications Funds
(UCC) for Capital Developments
In technology-related projects, a large portion of UCC-effort
cannot be counted as additional cost sharing because UCC Operations
and Maintenance efforts are already included in the calculation of our
Federally Negotiated Indirect Rate Agreement. However, there are sometimes
exceptions to this, when some of UCC effort can legitimately be claimed
as matching revenue.
First, there are instances where no indirects are allowed
from the funding source. In these cases, if the project is primarily
technology-based, we are not accurately reflecting the proper UCC effort
on these projects if we collect no portion of Indirect. Thus, an appropriate
percentage of effort is applied to these project matching direct costs,
to compensate for the effort that is not recovered because indirects
are not allowed.
Secondly, there are UCC-efforts which are primarily new
Development and/or Capital Improvements projects, efforts which are
separate and distinct from standard Operations and Maintenance. Examples
of these costs can include associated faculty development technical
training, infrastructure building, system installation, etc. and other
components which are in addition to Operations and Maintenance, when
new systems are acquired through grants. Thus, an appropriate percentage
of effort associated with the above list of activities, and would be
calculated as project matching direct costs, to reflect the proper UCC
costs associated with the project. Thus, UCC efforts may be legitimately
calculated in terms of associated direct costs, and claimed as cost
sharing when these two exceptions apply.
Type of cost sharing: Cash
Required approvals: Assoc. Vice Chancellor, UCC
4. Federal Funds Cost Shared on State Projects
Some research institutes and other efforts at UNO are
comprehensively or primarily funded with federal dollars. If these federal
funds are going to be available during the stated project term in the
proposal, they may be committed as leveraging for state dollars, in
state funded competitions, for example at the Board of Regents. The
best example of this is the BoRSF ( 8G) program, where federal funds
might be leveraged within a proposal which is appropriate and eligible
within the specific BoRSF (8G) program guidelines.
Type of cost sharing: Cash
Required approvals: Chair and/or Dean, in conjunction
with the appropriate federal program officer (a letter authorizing this
commitment would be required)
5. State Funds Cost Shared on Federal Projects
In instances where state funding has been obtained, with
permission those funds might be leveraged for a larger, project to be
funded with federal funds. These instances are less common because within
BoR 8G for instance (in the Research Competitiveness Program), the PI
most often is required to relinquish those funds when federal funding
is achieved, because the entire goal of the program is to make the PI
nationally competitive. But a more likely scenario might be if a PI
obtains a BoR 8G (ITRS) grant, he/she might be able to leverage those
funds with a federal funding source, the NSF GOALI program for instance
which has similar goals and requirements.
Type of cost sharing: Cash
Required approvals: Chair and/or Dean, plus appropriate
state funding source program officer (a letter would be required)
6. Other Specialized Funding : Student Technology
Fees (STF)
In some instances, there are base project funds available
which have the potential to achieve much broader goals by leveraging
those for additional federal funds. The Student Technology Fees (STF)
under appropriate circumstances, could be used to leverage for much
larger funds to achieve their mandated goals, that is to promote teaching
and other scholarly projects that will directly benefit our students
on a much broader scale. In all instances, these projects will only
be considered for cost sharing provided they clearly meet the legal
mandate of the STF. This type of request should go through appropriate
channels prior to the Provost.
Type of cost sharing: Cash
Required approvals: Provost/Executive Vice Chancellor
for Academic Affairs
7. Other Specialized Funding: Start Up Funds for
New Faculty
Due to specific priorities that a College may have, some
new tenure track faculty may be allocated a certain level of funds which
are guaranteed upon entry, and are available until exhausted to be used
for research needs or to leverage on proposal applications. The use
of these funds (where available) must be considered very carefully because
they are usually designated to help the new researcher set up his/her
required research facilities. Thus, some of these funds are usually
spent immediately for this purpose. However, depending upon one's requirements,
it may be possible to space these expenditures over a period of 2-3
years, in which case a portion of these funds might be available for
cost sharing on projects that might get funded in year 2 or 3 of the
new investigator's term at UNO. In most cases, Office of Research will
not consider cost sharing requests from new investigators who have start
up funds available for leveraging.
Type of cost sharing: Cash
Required approvals: Chair and/or Dean (with appropriate
General Fund account code)
8. Private Funds
Commitments from entities external to the University can
represent allowable and viable sources of potential leveraging, usually
for larger federally-funded projects. The private funds can be in three
forms.
First, they might be in the form of a gift from a benefactor,
in which case it is important to understand the benefactor's restrictions
in terms of when the funds will be available, and whether he/she wishes
to impose some restrictions or goals on the funds.
Secondly, private funds may also come from business and/or
industry who view this type of leveraging for federal capital as a means
to accomplish goals they could not otherwise afford. The NSF GOALI program
is a good example of how this concept might be applied.
Thirdly, they may be from a private foundation with specific
goals, restrictions, etc. and one which is knowledgeable of the concept
and willing to leverage for additional federal revenues to achieve more.
In any case the private funds must be available in the
year the federal funding would actually be received. Thus, given the
required funding cycle lead times, the private source must be willing
to commit the funds for possibly as long as three years to warrant the
kind of front end negotiation and effort which would occur to make the
project successful.
Type of funds: In-kind
Required approvals: At UNO, the Provost (usually in concert
with a Dean and the UNO Development Office).
From the private source, a ranking official from
the private organization must agree in writing, and this written commitment
will be submitted to the funding agency.
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