Cost sharing is defined as “…the portion of total project costs related to a sponsored project that is not provided by the sponsor.” –2 CFR 200.306

Simple enough?  Actually, there are a number of things that should be taken into consideration before proposing cost share in a budget.  Some of these things include:

• Is cost share necessary to accomplish the project objectives?
• Is cost share required by the program or sponsoring agency?
• What is allowable as cost share?
• What are some common sources of cost share?

As often is the case in sponsored research, the answer to these questions is, “It depends.”  Often the answers depend on the proposed project, the program/sponsor, and the institution.

Is cost share necessary to accomplish the project objectives?

For programs with tight budget caps, it may be necessary to cost share project costs in order to meet proposed objectives.  Alternatively, the PI (Principal Investigator) might consider scaling back the project.  Regardless, it is important to note that once cost share is proposed and accepted in an award, the cost share is committed and there is an obligation to meet the proposed cost share.

Is cost share required by the program or sponsoring agency?

It depends.  Carefully read the program guidelines to determine if cost share is required by the sponsoring agency or by the program to which you are applying.  Cost share that is required is called mandatory cost share, meaning cost sharing is required as a condition of obtaining award funds.

What is allowable as cost share?

Generally items that can be charged to the sponsor (e.g. effort, fringe benefits, travel, materials and supplies, etc.) are allowable as cost share.  On the flip side, items that are not allowable as charges to the sponsor are generally not allowable as cost share.

For example, if a sponsor will not allow faculty effort to be charged to the grant, most likely you cannot use faculty effort to meet a mandatory cost share requirement.  As always, it’s good to check your program guidelines regarding allowability of costs, whether charged to the sponsor or proposed as cost share.  When in doubt, ask the sponsoring agency for clarification and document the outcomes.

What are some common sources of cost share?

Cost share may come from donation of faculty, staff, or student effort and associated fringe benefits.  Cost share might also be cash, third party contributions, unrecovered Facilities & Administrative (F&A) costs, volunteer services or donations, or program income.  Again, check allowability before proposing any of these items as cost share.  Also, ensure you can easily document and track cost share commitments.  For example, if you are receiving a third party contribution, obtain a letter of commitment from that outside entity that documents the value of the goods or services provided.

In summary

In summary, cost share may be proposed to accomplish project objectives or because it is required (i.e., mandated) by the sponsor.  Cost share that is not required is voluntary cost share.  If proposed and accepted in an award, both mandatory and voluntary cost share become commitments or obligations to the institution.  Check with your grant accountant on how we document and track commitment cost share at CSU.