Cost Sharing

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What is Cost Sharing?

Cost sharing (or matching) is the portion of the costs of a project or program that is not borne by the sponsor. Depending on the specific funder call and funder rules, cost sharing may or may not be allowable. When allowable, it falls into one of two categories: 

1. Mandatory cost sharing: Cost sharing that is required by the sponsor as a condition for proposal submission and award acceptance.

2. Voluntary cost sharing: Cost sharing that is offered in a proposal but not required by the sponsor (committed), or that is over and above that which is committed and budgeted for in a sponsored research agreement (uncommitted).

Costs incurred using cost shared funds are subject to the same policies governing allowability as the costs under the corresponding approved sponsor budget.

Factors to consider

Some granting agencies require the university to share the costs of the proposed research. This practice lowers the award cost to the agency and requires the institution to take a vested financial interest in the project. While this shared commitment and responsibility may potentially lead to better outcomes for the research, it is also arguably discriminatory against those less wealthy institutions who cannot afford to make major strategic investments of this nature. 

Funder-directed cost-sharing requirements usually appear only when the institution's financial support and commitment is deemed foundational to program success. Funder directives vary (and should be examined carefully prior to entertaining cost share considerations), but in the broadest sense, the kinds of factors that may justify the inclusion of programmatic mandatory cost sharing requirements could include, capacity-building, linkages with industry, procurement or support for facilities or permanent equipment, and long term sustainability (i.e. factors that include items that provide a tangible benefit to the institution beyond activities supported by the grant or that have a clear potential to generate income).

If the granting agency alters the budget of an award and/or the involved cost sharing institutions connected to an award that is subject to mandatory cost sharing (i.e. a %age of budget is required as cost share commitment from each participating institution), then the amount required at an institution correspondingly increases or decreases proportionately. 

Voluntary cost sharing on most grants with NSF is no longer permissible. 

Contributing Sources to Support Cost Share Budget

Prior to proposal submission to the funder, this form must be completed and signed by the provider of funds used for the cost share, see the form for additional instructions and sample. The signed form should be attached to the cayuse proposal record.

https://rice.app.box.com/v/CostShareFormY1 

The following types of cost share are referred to at Rice:

• Cash:  Departmentally maintained funds used for expenditures such as salaries, equipment, travel, supplies, or other direct costs.  For example, award-PI faculty AYT return may be used to support a cost share commitment.  

• In-kind:  Non-cash contributions such as time, equipment, or facilities.  Value is based on fair market value of goods and services received. 

• F&A:  Facilities and Administrative (F&A) costs based on the direct costs can be budgeted and charged as cost share.  There is no F&A on cost share expenses. 

• Third Party:  Non-Rice cost sharing contributors whose cost share proposals are reviewed by OSP to meet Uniform Guidance requirements for valuation.  For subawardees, cost share commitment documents are included in the award documents.  For non-subawardees, RCA will request PIs to certify cost share commitments are met.  

A clear understanding between the proposal PI and the departmental admin managing such a fund should be determined to ensure the current or projected fund balance for it will be sufficient to cover the proposed burden of cost sharing should the project be awarded.

Other departmental, divisional, or institutional sources of funding may exist and in each case the burden is on the faculty leading the proposal to discuss and secure such potential avenues of support with and from the centers of authority atop departmental and divisional hierarchies. The research administrator, in concert with administrators at the appropriate level, must then work together to ensure balance is transferred to the cost-share project and that RCA is then instructed to budget the cost share project's budgetary category amounts appropriately.  

Managing Cost Share

At the time of the award setup, RCA creates a separate cost share project.  The PI along with the departmental/research administrator assumes the responsibility to ensure cost share expenditures are posted accurately to the cost share project.  RCA provides the cost share reports to the award sponsor including the final cost sharing report as needed.  

Additional Resources

References

1. Rice Cost Sharing, "Cost Sharing Policy Number 306", https://policy.rice.edu/306