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Developing Your Budget

The budget elements of most proposals fall in either the “Direct Cost” category or in the “Indirect Cost” category.

Direct Costs are those that can be clearly attributable to a specific project.

Facilities and Administration Costs, or “F&A” costs, formerly known as “indirect costs,” are general “support expenses” that cannot be specifically tied to a particular project (eg. utilities expenses and staff who support a number of projects).  These are sometimes referred to as “overhead” and “administration” costs by funders.  Colorado College’s current “F&A” rate, negotiated with the federal government, is 44.0% for on-campus activities and 18% for off-campus activities.  More on F&A costs are below.

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The following categories are considered Direct Costs.

Salaries and Wages. When projecting salaries for the proposal budget, we use the current academic year salary of the faculty member in question as the base and project a 3% increase for each subsequent year.  A faculty member's actual increase will be determined during the College’s annual salary review process and will likely differ from the increase projected in the budget. If the grant is funded and the actual increase exceeds the budgeted amount, the Project Director (or Principal Investigator) may be allowed to use grant funds from another budget line cover an increased salary line.  Please discuss this with the Director of Faculty Research Support.

Summer Salary.  Colorado College faculty members are on a nine-month appointment. Therefore, they may request salary for the summer based on their nine-month base salary for the previous academic year.  Most funders generally limit summer salary to no more than 2/9th of the academic year salary. Apply the same logic for subsequent increases as described in the paragraph above.

Sabbatical Pay. Faculty who anticipate being on sabbatical during the proposed project period, and who wish to include part of their salary in the project budget, should discuss these plans with both their Chair and the Dean well before the proposal deadline. The amount requested through external funding sources, together with the sabbatical pay provided by Colorado College, may not exceed the faculty member’s base salary for that academic year.

Requesting Course Release. Under certain circumstances, the Project Director (PD) or Principal Investigator (PI) may request funds to support release time from teaching. The PD/PI must discuss this possibility with his or her Department Chair and the Dean of the College well in advance of submitting a proposal for review. If the grant is awarded, the faculty member should notify the Department Chair and Dean of the College immediately in order to facilitate course scheduling.

Request for a New Faculty Position.  Funders will sometimes pay for new faculty salary lines if there is a commitment from Colorado College to sustain the position after the initial funding period.  Please discuss ideas about new faculty positions with the appropriate Chair and the Dean and discuss possible funders with the Director of Foundation Relations.

Compensation for Staff. Grant proposals may include funds for new or continuing staff positions to support a project.  Because grant-supported personnel are employees of the College, the terms and conditions of their employment, including salary ranges, are governed by College policy.  Therefore anyone wishing to include a new position in a grant proposal should discuss the appropriate salary range with the Human Resources manager and receive approval for the new position from the Dean. Approval of the new position does not commit the College to continuing the position after the grant period ends, and the grant proposal should clearly outline this.

Student Employees. College policies must be followed when hiring students through an external grant.  Project Directors should consult with the “Pay Rates for Student Employees” available on the Student Employment section of the Financial Aid site.  (Recent graduates are considered staff.)

Fringe Benefits. Fringe benefits are considered direct costs and consist of the College’s contributions to an employee's social security account, retirement plan, health and dental insurance, unemployment compensation, worker's compensation, life insurance and disability insurance.  Employee benefits are calculated as a percentage of salaries (30% for benefits-eligible positions) and wages (7.65% to cover FICA for students during the summer). The College recalculates the percentage for benefits-eligible positions annually. Please check with the Director of Faculty Research Support for the current percentage.

Travel. Travel costs allowed under a grant must be consistent with Colorado College’s travel guidelines (Please see the Meal Guidelines and Procedures). Funders may have further restrictions on allowable expenditures; please be sure to adhere to these restrictions when developing your budget. In particular, most funding agencies require that foreign travel be specifically authorized through the awarded budget, contract or post-award memo.  Use the US State Department’s Foreign Per Diem Rate when developing your budget.

Equipment.  If there is any equipment required to perform the activities outlined in the grant that is not readily available and accessible from College resources, then the proposal should include a request for this equipment. Equipment is defined as tangible property having a useful life of more than one year and an acquisition cost greater than or equal to $5,000. (Acquisition costs incorporate the costs to install the equipment and make it ready for use.) For grant purposes, equipment is typically used for scientific or other technical activities.  Because new equipment requires a commitment on behalf of the College to maintain the equipment after the grant period, the Project Director/Principal Investigator should be prepared to document the space requirements, maintenance contracts, insurance, annual supplies and other costs associated with the new equipment and discuss these costs with the Chair of the Capital Equipment Review Committee well in advance of the proposal deadline. Approval from the Chair will be required prior to submission. Any equipment funded by a grant awarded to the College becomes property of the College when the grant concludes unless the grant’s terms and conditions outline another outcome.

Other Direct Costs. Consult the grant guidelines carefully to see what other direct costs are allowable. Costs that customarily may be charged to a research grant include communication costs unique to the project, supplies that are consumed during the project, field expenses, expendable laboratory equipment, journal page charges, and the purchase of publications related to your research.  Some grants allow for software and computer purchases.  Please consult with Educational Technology Services well before the submission to discuss whether the college would be taking on annual maintenance/licensing and future replacement costs related to computer and software purchases.

Matching Funds and Cost-Sharing

Some funders require institutions to contribute to the cost of the project through either matching or cost-sharing funds. (NSF expressly prohibits cost-sharing; no institutional contributions should be noted in the budget or in the budget justification.)

  • Matching funds are generally defined as a cash contribution (i.e., a percentage of the cost of a piece of equipment) and are either supplied by the institution or by other (usually private) funding sources.
  • Cost-sharing occurs when the institution makes an in-kind contribution towards a project's required resources. Faculty salary, fringe benefits and F&A (or "indirect") costs are often proposed for cost-sharing.

Generally, the College does not propose matching funds or cost-sharing unless the funder requires it.  The Dean of the College has some matching funds available for supporting grant proposals. Please discuss the need for matching funds with the Director of Faculty Research Support well before the proposal deadline.

Subawards. Typical subaward situations include arrangements in which two (or more) qualifying legal entities/institutions are working collaboratively on a grant project. Each institution has its own PD/PI; however, one of the collaborating institutions takes on the role of prime awardee with the funder – that is, the prime awardee receives the award from the funder for the entire scope of work, and issues a subaward to the second institution for a portion of the scope of work. Subaward agreements are made in the form of a legally binding agreement, generated by the prime awardee, which is also referred to as the “lead” organization.

When a Colorado College principal investigator wants to include a subaward in a CC proposal:
If a PD/PI wishes to include a subaward in his/her grant proposal, the PD/PI should:

  • Receive approval from the Dean to include a sub-award agreement in his/her project budget.
  • Collaborate with the subawardee in order to develop a written scope of work for the subawardee’s portion of the work. This should be provided to the Director of Faculty Research Support well before the submission deadline.
  • Collaborate with the subawardee in order to develop a written budget and budget justification for the subawardee’s portion of the work. This should meet the requirements of both the funder and Colorado College and should be provided to the Director of Faculty Research Support well before the submission deadline.
  • Ensure that the subrecipient institution has provided a statement to the Director of Faculty Research Support from its authorized representative indicating a commitment to perform the scope of work proposed, assuring the accuracy and reasonableness of the budget, and agreeing to enter into a formal sub-award if the proposal is funded.
  • Ensure that the subrecipient institution has provided the Director of Faculty Research Support with all required certifications and assurances (e.g., human subjects assurance) relating to the subawardee's proposed scope of work.

If the proposal is funded, the PD/PI will work with Director of Faculty Research Support to execute a formal sub-award agreement, which must be signed by authorized organizational representatives of both institutions.

When a Colorado College principal investigator wants to be included as a subawardee on another institution’s proposal:
Every institution requires different documentation from a subawardee; therefore, it is the CC PD/PI's responsibility to learn the requirements from the lead institution. The Director of Faculty Research Support can assist the CC PD/PI in this process.

 

Facilities and Administration Costs

Our federally-negotiated rate is 44.0% for on-campus work and 18% for off-campus work.

Please see this brief explanation of what F&A rates are, and how Colorado College’s rate was determined. 

For greater detail, the full F&A Agreement is available.

Some funders (federal and private) set a limit on the F&A rate (eg. 10%), regardless of whether the institution has a negotiated indirect cost rate. However it is Colorado College’s practice to ask for the full indirect cost rate if allowed by the funder.

F&A payments represent a “grant” from the federal government to the host institution that provides space and support for scholarly research.  F&A payments reimburse the institution for costs that are not directly supported by the grant and for the hidden costs of sustaining a supportive environment for research. 

The College’s policy for spending recovered F&A costs describes how recovered F&A funds are allocated at the College.

Thanks to Bowdoin College and Middlebury College for substantial use of their budget-development language.