Cost sharing is the portion of the total project costs of a sponsored project that is not paid by the sponsoring agency. There are primarily three types of cost sharing that may occur on sponsored projects: mandatory cost sharing, voluntary committed cost sharing, and voluntary uncommitted cost sharing. Matching is another common term used to describe cost sharing.
This is cost sharing that is required by the sponsoring agency. The requirement for such cost participation is explicitly set forth in project announcements or request for proposal (RFP) and is a requirement for eligibility to participate in the project and will be specifically identified within the university’s proposal.
Mandatory Cost Sharing: 60/40 Split
In the cases of mandatory cost sharing where the cost sharing is mandated by the sponsor, the Office of Research & Engagement (ORE) will participate in coming up with the cost sharing on a 60/40 split. If the college and/or department provide 40% of the cost sharing, the Office of Research & Engagement will provide the other 60%. Typically the cost sharing amount does not exceed the amount of F&A being requested of the sponsor. This ensures the funds will be available from the college/department and the Office of Research & Engagement.
The process of requesting a 60/40 split:
- Create a detailed budget for the total amount that will be requested from the sponsor. Create a detailed budget of the cost sharing amount you are requesting.
- Obtain department and/or college approval of the cost share amount. An e-mail is sufficient.
- Submit both detailed budgets and approvals from department and/or college to Dr. Janet Nelson in ORE requesting the cost sharing.
If ORE agrees to a 60/40 split the signed documentation, or e-mails, with cost share amounts from the department/college and from Dr. Janet Nelson showing approval of the cost sharing must be included as attachments with the Cayuse SP proposal.
The solicitation requires 20% cost sharing. A project has a budget of $200,000 in direct costs. With an on-campus F&A rate of 49%, the indirect costs equal to $98,000 for a total of $298,000 being requested from the sponsor. The total cost sharing amount is 20% of $298,000 = $59,600.
The cost share split would be $23,840 from the college/department and $35,760 from the Office of Research & Engagement.
This is cost sharing that is not required by the sponsor, but which is included voluntarily in the university’s proposal to the sponsor. Once the sponsor has accepted the proposed cost share, the university is then obligated to meet the cost-sharing amount.
For example, voluntary committed cost sharing would be when a principal investigator commits to spend 15% effort on the project but does not expect the sponsor to provide funding to cover these costs. In this case, the 15% effort on the project was a requirement for proposal submission in the RFP, but was included at the discretion of the PI (or other project personnel) in an attempt to leverage the proposal.
Voluntary Uncommitted Cost Sharing
This is cost sharing that is neither mandatory nor voluntary committed. It represents contributions by the university to a sponsored project that were not required by the awarding sponsor and were not volunteered in the university’s proposal to the sponsor. Voluntary uncommitted cost sharing is not reported back to the sponsor. For example, voluntary uncommitted cost sharing occurs when the principal investigator’s effort is greater than what was committed to the sponsored project.
It is the preference of the university that only mandatory cost sharing be proposed to sponsoring agencies. This preference does not preclude exceptions that may be judged appropriate under certain circumstances to leverage a project.
Mandatory cost sharing requirements are usually defined by law, statute, sponsor regulations, or written in the application guidelines for a specific program. When mandatory cost sharing is required, a copy of the RFP, regulations, or guidelines must be submitted with the proposal along with a written commitment from the individual authorized to commit the resources to the campus research office. All cost sharing is to be reviewed and committed in writing prior to the proposal submission to the sponsor.