What are the rules about indirect cost rates for subcontracts and purchased services?
Indirect costs are overhead expenses incurred by the applicant organization as a result of the project but that are not easily identifiable with a specific project. These are administrative expenses that are related to overall operations and are shared among projects and/or functions. Examples include executive oversight, accounting, grants management, legal expenses, utilities, and facility maintenance. When applying to the Robert Wood Johnson Foundation, the Foundation’s approved indirect cost rate for the applicant institution is 12% of all RWJF costs (Personnel, Other Direct Costs, and Purchased Services) associated with the project. However, if the Purchased Services category (subcontracts and consultant fees/agreements) represents more than 33% of the RWJF portion of the applicant institution’s budget, the percentage allowed on this category is 4%. RWJF does not prescribe an allowable indirect cost rate for organizations that will be subcontracting with a grantee. RWJF only reque
