Developing a budget for your project is one of the most important components of a grant proposal. It is important that when developing a budget, you keep in mind the guidelines, policies, and procedures from the funding agency as well as from the university.

Budgets consist of two main parts, direct costs and indirect costs. Direct costs include such things as personnel, travel, equipment, and supplies. Indirect costs (F&A costs) are those costs that benefit the grant but cannot be tied directly to only the grant. Some examples include office/lab spaces, electricity, water, etc.

FMU has a federally agreed upon F&A rate (facilities and administrative). Currently the rate is:

71.5% on-campus

22% off-campus

Check with the Office of Sponsored Programs for which rate to use, especially if some of your grant work will be completed off-campus.

Our F&A cost rate agreement defines off-campus as follows:

“For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s) the off-campus rate will apply. Grants or contracts will not be subject to more than one F&A cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.”

Our base is for direct salaries and wages including all fringe benefits.

This means, if you have a grant proposal with salary and fringes making up a portion, you will calculate your F&A rate using the salary and fringe information only. An example is given below.

Example: Calculating Indirect Costs

In the below example, Person 1 and Person 2 are each requesting one summer month (June) for their grant. They work under a normal 9-month contract. Using the FY2022 fringe rate of 31.26%, the total personnel costs come to $15,918.59. This includes salary and fringes. This is the number we will use to calculate the fringe. Note: We are not using Total Direct Costs, only the total personnel (salary and fringe) costs.

The project for this grant is on-campus, so we will use the 71.5% on-campus F&A rate. So, $15,918.59 X .715 = $11,381.79. This is the indirect costs.

You find out the total costs by adding the direct costs and the indirect costs. That is the total you are asking for from the funder. In our example, the total costs are $37,300.38.