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Demystifying Indirect Costs

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Indirect costs can be confusing if you are not a seasoned grant expert, finance professional or CPA. Let's be honest. Even among this well-trained group, indirect costs can be a mystery. But the truth is that indirect costs are a necessary and important part of administering your grant-funded project or program. Getting this component wrong can adversely impact your organization. We've compiled a number of resources in this post to help you make sense of indirect costs, including training videos from experts.

What Are Indirect Costs?

According to the Uniform Guidance §200.56, indirect costs are those costs incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefited, without effort disproportionate to the results achieved. If this definition is a bit too technical,read this post by Rachel Werner, CEO of RBW Strategy. Rachel defines indirect costs and deconstructs some common myths.

What's My Indirect Cost?

Your indirect cost must be calculated, proposed to your cognizant agency, approved, certified and then included in your grant proposal. Nicolie Lettini, CEO of CostTree and cost allocation expert, demystifies some of this process in her post.

Video Q&A

How To Negotiate Your Indirect Cost (4:19)

The 10% De Minimis (3:35)

What Happens If Get It Wrong? (7:40)

Need more help? Here is a full training with experts from HHS, DOI and CostTree. Watch the free training video.

Free Resource: 2 CFR 200 Training Videos

See all posts.