Propose only what you can cost share, that is costs that adhere to the cost principles of allowable, allocable, and reasonable.
Carefully weigh the cost/benefit of each potential cost sharing commitment because the increased administrative requirements and responsibilities inherent in the cost sharing commitment. Cost sharing of direct expenditures represents a redirection of departmental or school resources from teaching or other departmental and school activities to support sponsored agreements.
Prepare a budget that Includes Indirect Costs.
Once cost sharing is proposed and agreed to, the PI must fulfill the commitment in the performance of that project.
Include cost sharing as a commitment in the PDRF
This commitment must be indicated on the PDRF (Proposal Development Routing Form). By signing the PDRF, the department chair or designee approves the cost sharing commitment. Implicit in Stanford’s commitment to cost share is the PI's agreement to ensure that:
Voluntary cost sharing is permitted by the particular sponsor and project for which it is being proposed and that funds are available for cost shared direct costs
He/She understands that unless specified in both the Federal awarding agency regulations and in a notice of funding opportunity, voluntary cost sharing is not expected by Federal sponsors and cannot be used as a factor during the merit review of proposals
Cost shared expenses are necessary and reasonable for proper and efficient accomplishment of project or program objectives
Cost shared expenses will be appropriately charged, tracked, reviewed, certified and accounted for in compliance with University and sponsor requirements
University space is coded in the University's Space Inventory System, consistent with the coding of expenditures in the accounting system
The NSF (National Science Foundation) will not accept proposals with voluntary committed cost sharing unless it is specified in the notice of funding opportunity.
What Can You Cost Share?
You can propose cost sharing for only those expenses that would qualify as allowable project costs.
Examples of Allowable Cost Sharing
Salary and Staff Benefits (School of Medicine prohibits faculty cost sharing)
A faculty member with an appointment less than 12 months may be paid from federal and/or non-federal sponsored projects for no more than 90% (95% for Research Faculty) during any of the summer months. The remaining summer effort cannot be cost shared. This effort is reserved for University obligations of time associated with the key person's position (which would include teaching, committee and departmental responsibilities as well as preparing proposals per RPH 3.2 for sponsored funding and leave from campus).
Tuition (Stanford's contribution only)
Equipment when the award is contingent upon such cost-sharing
Material and supplies
Other project expenses
- Indirect Costs (F&A) - if sponsor approves
What You Cannot Cost Share
Cost sharing may not be proposed where the sponsor has explicitly prohibited it.
The following expenses cannot be proposed as cost sharing on sponsored project proposals:
Unallowable costs as defined in federal regulations
Costs designated as unallowable for a particular sponsored project
Equipment unless the receipt of the award is contingent upon such cost sharing. You cannot cost share equipment in Stanford’s current inventory as the sponsor is already paying for a portion of it through the indirect rate. However, Stanford-owned equipment can be used on a sponsored project. To let the sponsor know the PI’s lab already has the necessary equipment the proposal can explicitly state:
Proposals which include the acquisition of special-purpose equipment as a direct cost may include an offer of University funds to pay for all or part of the cost of such equipment. These proposals may be for equipment or instrumentation grants, where the purpose of the grant is to buy equipment and we are required to share the cost with the sponsor, or research-oriented grants or contracts where the purchase of equipment required for the research is an allowable expense included in the proposal and award. Purchase and acquisition must occur during the period of performance. The portion of the purchase price paid by the University must be charged directly to a cost-sharing account in support of the award.
Faculty salary (School of Medicine Only)
Salary dollars above a regulatory cap, e.g., NIH
Salary dollars for effort above 90% (95% for Research Faculty) for those faculty with an appointment of less than 12 months
It is not appropriate to claim the value of Stanford facilities as cost sharing because the use of Stanford facilities is partially paid for by sponsors through the application of the indirect cost rate. You may not offer university space or facilities as cost sharing.
The PI may want to offer the use of a research lab or facilities for the project. In such a case, the proposal should explicitly state; the facility or lab will be available for the performance of the sponsored project at no direct cost to the sponsor.
Additional items that you cannot cost share:
Depreciation on government-funded equipment
F&A (Facilities & Administrative) or indirect costs in excess of the 26% administrative cap, except for DOD contract
Stipends are not considered compensation for effort and are never accounted for as cost sharing
Indirect costs are real costs of conducting instruction and research. These F&A costs do not disappear simply because a sponsor refuses to pay for them; the University must fund any indirect costs that have not been reimbursed. When direct costs are cost shared, the indirect costs associated with the direct costs are automatically cost shared. PIs may take advantage of the automatic cost sharing of these costs, and include them on the proposal budget. PIs may also include any waived indirect costs as University cost sharing in proposals. (For the Stanford policy on waivers, see RPH: Indirect Cost Waivers.) For federal awards, unrecovered indirect costs on cost sharing may be included as part of cost sharing only with the prior approval of the federal sponsoring agency.
The accounting system is not capable of tracking cost shared indirect costs; they will not appear in the expenditure statements. The Office of Sponsored Research will calculate the cost shared indirect costs based on information from the awarded budget and the accounting system for reporting purposes.
When and How New Equipment can be Cost Shared
If a project requires the acquisition of new equipment as a condition of an award, it is acceptable to purchase the equipment and cost share all or part of it. Account for the piece of equipment as cost sharing by recording it in a cost sharing PTA. In addition, the equipment must be identified as cost sharing in Stanford's Capital Asset Management System, Sunflower Assets.