I recently explained what an indirect rate is, and how it is typically calculated. If you're considering applying for a grant that allows for indirect rate reimbursement, there are some common considerations to keep in mind before you submit your grant application:
- Be sure to read the grant guidelines closely - they vary regarding indirect rate policies. You'll want to know:
- Are indirect rates allowed?
- Is there an indirect rate cap?
- Does the indirect rate have to be approved?
- Do I need to follow a special procedure to get my indirect rate approved?
- If you're writing a grant for a school, keep in mind that many states approve indirect rates for all of its educational entities, and you can include that rate in your proposal.
- Do not request direct support for anything that will already be absorbed by your indirect rate (like copying services, for example), unless you can explain how the two costs are different. Similarly, grant writing costs can sometimes be included in indirect rates, but it varies by RFP, grant maker, and agency. If grant writing costs are allowed, be sure not to include grant writing fees as a direct request in your proposal.
- When calculating indirect rates, use only those indirect expenses that the funding agency allows. For federal agencies, knowing the regulations can be daunting, so it's helpful to find someone already familiar with these types of requirements.
- The proposal's ceiling (how much grant funding you can request) usually includes both indirect and direct rates. Do not request direct costs for the full amount of the grant, and then request indirect costs on top of it. Similarly, be sure that your indirect rate does not exceed the rate allowed by the grant proposal's guidelines.
Indirect rates can get complex, but your organization's business office or financial officer should be able to help out. It's worth repeating: be sure to read the grant guidelines and be familiar with the grant maker's indirect rate policy before you compile your final budget request.
Anything we missed? Tell us in the comments!
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