Cost Sharing FAQs

• Cost Sharing Defined / Responsibilities
  
• When should I cost share?
  
• Why is Cost Sharing discouraged when not required by the sponsor?
  

  Consider the following:

  1. Cost sharing brings down the university indirect cost rate, reducing the indirect cost reimbursement from the government. Here is why: The cost sharing committed in a proposal is required to be considered as direct research costs, and is added into the denominator of the indirect cost calculation. See the difference between the formulas with and without cost sharing:

With Cost Sharing: Indirect Costs for Research / (Direct research costs + Cost Sharing Committed) = Indirect Cost Rate

Without Cost Sharing: Indirect Costs for Research / Direct research costs = Indirect Cost Rate

It is apparent the indirect cost rate with cost sharing is lower.

2. Committing cost sharing voluntarily in a proposal usually does not affect the competitiveness of the proposal, unless the sponsor specifically states that non-required cost sharing is encouraged. This is rare.

3. Once the cost sharing is committed, the PI, the department, and the university are all obligated to monitor and track the cost sharing, even if cost sharing/matching is not required by the program. This adds additional administrative effort on all parties, not to mention the administrative effort of counting and adding the total cost sharing to the indirect cost calculation.

Mailing Address:
PO Box 3308
Tucson, AZ 85722-3308

Phone: (520) 626-6000
Proposal Fax: (520) 626-4130
Post Award Fax: (520) 626-4137
Email: sponsor@u.arizona.edu

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