Projects sponsored by industry are important to Colorado State University’s research community as a source of funding for research and testing that helps fulfill CSU’s Land Grant mission. Industry-sponsored projects allow for relationship-building with industry partners that benefit the university and the partnering companies, training the next generation of researchers, building a pipeline of future employees for our partners, and driving innovations from university laboratories into the marketplace.
Working with for-profit partners is a bit different than working with federal government research funding agencies. As a state institution, CSU has an obligation not to use university resources for private benefit. Thus, budgets for projects sponsored by industry (without federal flow-through) must have the industry sponsor paying the full cost of the project. That means budgets to industry sponsors should:
- Use CSU’s applicable Indirect Cost Rate (F&A) for the activity and calculate it based on Total Direct Costs (TDC)*;
- Present budgets to industry sponsors as fully burdened** (and no indication of the Indirect Costs applied should be provided in other documentation, e.g., budget narrative);
- Do not include cost share of any sort (this includes cost share of the PI’s salary).
OSP has many resources supporting the requirement for fully burdened budgeting and the use of TDC for the Indirect Cost base. On the Sponsored Programs Guidance webpage, you can utilize the Industry Sponsored Agreement FAQs document and the Preparing Budgets on Sponsored Projects guidance. Finally, our most popular RAM Symposium Session, Working with Industry – Preparing Proposals & Talking with Industry Sponsors, from October 13, 2022.
Exceptions:
- Federal flow-through proposals, where an industry sponsor is the recipient and CSU is the proposed subrecipient, should develop budgets using CSU’s federally negotiated indirect cost rate. Assess the appropriate activity (Organized Research, Other Sponsored Activity, or Instruction) and use an MTDC base for calculation.
- If the prime (federal) solicitation requires the use of a reduced Indirect Cost Rate, which would generally mean CSU would apply the reduced rate calculated on TDC.
- For proposals to industry sponsors where they are flowing through non-federal funding (e.g., state, or local government funds), CSU will abide by the limitation in the prime sponsor’s solicitation; if the prime sponsor does not address indirect costs or no original solicitation exists, CSU applies Indirect Costs based on TDC for the appropriate activity.
How To:
*To use the TDC rates in Kuail Research Proposal Development (KR PD) for an industry sponsor budget, please change Budget Settings for a detailed budget version as follows:
- Change Unrecovered F&A Rate Type to TDC
- Change F&A Rate Type to TDC
When you click ‘Apply Changes’ to save and close Budget Settings, the system will generate a prompt about the impact of changing the rate type. Choose ‘Yes’.
NOTE: It is suggested best practice to change Budget Settings before entering detailed line items, but you can change at any time before marking the budget ‘complete’.
**After your detailed budget has been created in KR PD, including both direct and indirect costs, select the “Print” button under “Actions” in the Budgets screen. When prompted, select “Industrial Cumulative Budget” to create a budget version suitable for industry sponsors. This action will create a budget that industry is used to seeing, in that labor and other rates will be fully burdened and will include associated fringe and indirect rates by cost categories.
Blog post by Bill Moseley, Pre-Award Manager, with excerpts from a previous blog by Tricia Callahan, Senior Research Education and Information Officer, Office of Sponsored Program, and Tracey Trujillo, Research Administrator, Warner College of Natural Resources, Colorado State University – updated 6-11-2025