How should I calculate Facilities and Administrative Costs (indirect costs/overhead) when I am creating a budget based on a fixed total project amount?
If you are developing a proposal budget based on a fixed total project amount that you will request from a sponsor, the breakdown between direct and indirect costs is calculated as follows: Example 1: Total project budget is capped at $100,000. Overhead rate paid by the sponsor is 20%. $100,000/1.20 = $83,333 direct costs. $83,333 direct costs * .20 = $16,667 overhead $83,333 direct costs + $16,667 overhead = $100,000 total project budget. Example 2: Total project budget is capped at $50,000. Overhead rate paid by the sponsor is 63%. $50,000/1.63 = $30,675 direct costs. $30,675 direct costs * .63 = $19,325 overhead $30,675 direct costs + $19,325 overhead = $50,000 total project budget Back to top What if the sponsor’s firm policy is to pay less than 20% overhead, or no overhead at all? There are three ways to compensate for the overhead shortfall on a proposal: 1) Center/Program unrestricted funds offset by grant direct costs will subsidize the overhead shortfall. 2) Other Center/Progr
Related Questions
- How should I calculate Facilities and Administrative Costs (indirect costs/overhead) when I am creating a budget based on a fixed total project amount?
- How should I calculate the Facilities and Administrative Costs (indirect costs/overhead) in a proposal budget?
- How should I calculate indirect costs when I am creating a budget based on a fixed total project amount?
