Cost-sharing (i.e., cost-share or matching funds) for grant proposals can be confusing, especially identifying sources for cost-sharing and accounting for it at the proposal stage. Sponsors may require cost-sharing on a grant program for a number of reasons, such as statutory requirements, demonstration of institutional buy-in, or to limit the number of proposal submissions.
Below are some of the most frequently asked questions that OSP receives from Principal Investigators about when and how to include cost-sharing in a proposal.
Q: What are the types of cost-share?
A: There are several types of cost share:
- Mandatory Committed: Cost-sharing that is required by a sponsor in order for your proposal to receive consideration and review. Without it, your proposal will be returned without review.
- Voluntary Committed: Cost-sharing that is not required by the sponsor for eligibility purposes, but is included in a proposal and becomes required at the time of award.
- Third Party: Cost-sharing that is provided by an entity other than UWM, such as a company. This type of cost-share is usually provided only when required by the sponsor.
When UWM proposes or reports any type of cost-share, the cost-shared funds are expected to be available during the course of a project and cannot be used for other purposes. For example, a PI proposing to cost-share 15% effort during the academic year towards a project cannot use that 15% for other research, service, or instructional commitments. Additionally, upon award, the cost-share commitment now becomes trackable for the PI in ECRT.
Q: What kinds of funds may be used for cost-sharing?
A: Sources for cost-sharing may include start-up packages, department/division research-related funds, indirect cost returns, or other campus funds accessible by the PI. The PI’s department/division also can provide cost-sharing. Funds from other grants and contracts typically may not be used as cost-share.
Q: Should I include cost-share in a proposal if the sponsor/program does not require it (i.e., voluntary committed cost-share)?
A: No. OSP strongly recommends that PIs and their departments/divisions do not include cost-share on a project unless it is required by a sponsor/program. For federal programs, the Uniform Guidance states that federal grant programs may no longer consider cost-sharing during the merit review process unless it is statutorily required. Thus, voluntary committed cost-share at the proposal stage will no longer have an impact on the proposal’s review.
Additionally, the Uniform Guidance requires UWM to treat both federal and non-federal funds consistently. Thus, for non-federal projects, OSP recommends that PIs and their departments/divisions do not include cost-share unless it is required by the sponsor.
Q: If I cost-share a portion of my salary, do I also include the corresponding fringe benefits as cost-share?
A: Yes. Include fringe benefits on any cost-shared salaries. Additionally, use the same fringe benefit rate on cost-share salaries and wages as those salaries and wages budgeted with the sponsor’s dollars. See the current UWM fringe benefit rates on the Frequently Requested Information page.
Q: Can I include costs incurred outside of the proposed project start and end dates as cost-sharing?
A: No. Just as award expenses must be incurred during the project start and end dates, so does cost-sharing. Do not include expenses that will be incurred outside of these dates as cost-share.
Q: I am applying to a program that requires 1:1 cost-sharing (i.e., UWM must provide $1 for every $1 of sponsor funds). I want to provide 2:1 cost-sharing. Is this acceptable?
A: It is up to the PI and the department/division to decide how much cost-sharing is acceptable. However, OSP recommends meeting the minimum 1:1 cost-share requirement. Most sponsors require applicants to meet only the minimum match requirements, and they usually do not award “competitive preference” points during the review process for exceeding the required match amount.
Q: If the project is funded, do I need to track the cost-sharing?
A: Yes. The cost-share pledged to the sponsor and approved in an award notice now becomes auditable. PIs are required to keep detailed records on the amount of cost-sharing on their award.
Q: I am proposing a multi-institutional project and UWM is the lead applicant. The project partners will provide cost-sharing. Do I need to document their cost-share in the proposal?
A: Yes. Each partner must provide an institutional letter of commitment that documents their approved cost-share towards the project. If the proposal is funded, each partner will be required to contribute their cost-share and provide documentation showing that it was used for the project.
Q: I am developing a proposal that requires 50% cost-sharing. I plan to work with collaborators at other institutions. Will my collaborators be required to commit cost-sharing too?
A: PIs typically work with their collaborators to determine how each institution will provide resources towards the 50% cost-share commitment. PIs should carefully review the program guidelines to determine how the cost-share can be met by all partners.
Q: Does both my department and my division need to approve the cost-share for my proposal?
A: Yes. The PI’s department and division must approve any proposed cost-sharing via WISPER prior to proposal submission. Failure to obtain approval may result in the proposal being withdrawn or UWM declining the award.
Q: My grant award is less than my original budget request. Is the difference between the award and original proposal budget now considered cost-share?
A: No. If a sponsor awards less than requested in the budget, OSP will work with the PI and the sponsor to negotiate an appropriate reduction in the scope of work and/or develop a revised budget. If the original proposal included cost-sharing, the cost-share amount also should be reduced proportionally to align with the smaller award total and revised scope of work.
Q: Can I use award funds from one sponsored project to cost-share on another sponsored project?
A: No. Most federal and non-federal sponsors do not allow PIs to use their awards as cost-sharing towards another sponsored project. However, there are a few exceptions to this rule – please contact your Pre-Award Specialist.
Q: If a cost is an unallowable expense for budgeting purposes, could it then be used for cost-share purposes?
A: No. If a cost is unallowable for sponsor budgeting purposes, it cannot be counted towards cost-share commitments either. For example, alcoholic beverages are not allowed on federal grants. Since alcoholic beverages are not permitted on federal funds, a PI could not use cost-share funds to cover these costs and meet cost-share requirements.
Q: I am submitting a proposal to an agency that requires cost-share and allows indirect costs at the fully negotiated indirect cost rate. Do I calculate the indirect costs on both my project budget and the cost-share funds?
A: Yes. Indirect costs are real costs that UWM incurs in the administration of grants and contracts such as OSP services, library services, utilities, building depreciation, and other administrative functions. Thus, indirect costs must be calculated on cost-shared funds at the fully negotiated indirect cost rate.
Q: I am submitting a proposal to an agency that requires cost-share but does NOT allow indirect costs at the fully negotiated indirect cost rate (or does not allow indirect costs on the budget altogether). How should I include indirect costs in the project budget?
A: OSP typically recommends first calculating the “forgone indirect costs” as a method to meet the cost-share requirements – these are indirect costs that UWM is entitled to receive through its federally negotiated indirect cost rate agreement, but cannot as a result of the sponsor’s limitation on (or prohibition of) indirect costs. Since sponsor and program requirements vary, PIs should contact their Pre-Award Specialist to discuss whether forgone indirect costs may be included in the cost-share budget.
After determining the amount of forgone indirect costs on the cost-sharing, PIs and their department/division should determine how that amount can be used to meet the cost-share requirements and if additional cost-sharing is necessary.
Q: Who do I contact if I have questions related to cost-sharing on a proposal?
A: Contact your Pre-Award Specialist to discuss cost-sharing in a proposal and for expert guidance.