Cost Sharing

Cost Sharing is the portion of total allowable, allocable, and reasonable [direct and indirect] costs of a sponsored project not paid for by the sponsor and are instead borne by the institution [Stanford] or third party. 

Mandatory Committed Cost Sharing

Is imposed by a sponsor as a condition of the award. It is quantified in the proposal and it is legally binding if the project is selected for funding.  This commitment must be tracked in the accounting system as cost sharing.  

A mandatory cost share requirement should always be stated in the proposal solicitation. However, it may not be obvious; it is critical to read through the entire program announcement (especially for non-federal sponsors) to identify any cost sharing requirements.

The Dept. of Energy, USGS, NOAA, and many humanities sponsors are those from which we most often see mandating cost sharing.  There are also a very small cohort (less than 10) of NSF programs that mandate cost sharing. 

Voluntary Committed Cost Sharing

Voluntary Committed Cost Sharing is NOT required by the sponsor. However, as applicants we offered it in a quantified manner in the proposal, even if inadvertently, and it is legally binding if the project is selected for funding.  This commitment must be tracked in the accounting system as cost sharing.      

Some sponsors, most notably NSF, explicitly prohibit the inclusion of voluntary cost sharing in a proposal. If a proposal is submitted to NSF with voluntary cost sharing, it is grounds for the proposal to be returned without review.

Voluntary Uncommitted Cost Sharing

Is NOT required by the sponsor, was NOT quantified anywhere in the proposal, and is NOT legally binding.  

Two common examples of voluntary uncommitted cost sharing are: 

1. Investigators devoting more time to a project than was proposed/committed at no additional project cost.

2. Investigators charging project expenses beyond what a project can support to their non-sponsored funds that allow research expenses.

Department Research administrators should be cognizant of any voluntary uncommitted cost sharing, even though it is not reported to sponsors, as this type of cost sharing can have significant impacts on faculty effort availability and non-sponsored account balances.

Matching

Refers to the sponsor requirement that the University match award funds in some proportion with funds from another party, either from the University or more typically another sponsor (with both sponsors’ approval). Matching requirements may be in the form of actual cash expenditure of funds or may be an “in-kind” match, which is the value of non-cash contributions to the project. An in-kind or matching contribution made by a party other than Stanford requires documentation from the third party supporting the use of the funds as in-kind/matching and may require a certification of fair market value.