Costs and Cost Sharing

What is cost sharing?

Some sponsors require that Indiana University commit to contributing to the cost of the project or match certain funds as a condition of an award. You should include cost share in the proposal budget in order to obtain approval from your department or school for these commitments prior to proposal submission. Cost share should not be included in a proposal unless it is a sponsor requirement.

Read IU's policy on Cost Sharing on Sponsored Programs.

The best way to show cost share is to add a column in the budget for the cost share. This provides the same level of detail as presented to the sponsor. This budget may be only internal, but provides the detail necessary for department and school approvals.

Cost sharing budget items must be

  • Verifiable
  • Necessary and reasonable to the project
  • Allowable and allocable under sponsor guidelines and applicable cost principles
  • Incurred within the timeframe of the project
  • Not be funded from another grant or contract without sponsor approval
  • Not included as cost share to another grant or contract account without sponsor approval

What is the difference between “cash” and “in-kind” cost-sharing contributions?

Contributions of salaries, supplies, and F&A by Indiana University are "cash" contributions, not "in-kind" contributions. These contributions are actually charged to the university and documented for bookkeeping and audit purposes. In-kind contributions are typically third-party contributions, volunteer estimates, etc., that are not included in IU financial records. Sponsor guidelines should be reviewed carefully as definitions and uses of the term "in-kind" can vary.

Can in-kind contributions come from a third party?

Your proposal may include contributions of goods or services by third parties (parties other than the grantor or grantee) in lieu of dollars. These contributions may qualify as cost share, but typically requires approval by the funding sponsor. Examples include the waiver of a consultant’s normal fee, the free use of an auditorium, or the contribution of supplies that would otherwise have to be purchased from project funds. You must have documentation in the form of a signed statement or receipt from the contributor for audit purposes. A letter of support/commitment from the contributor often needs to be submitted with the proposal.