Indirect Cost Rate Policy

Indirect costs (also referred to as Facilities & Administrative or F&A costs) are general overhead and administrative expenses that support an organization’s overall operations. While they may not be directly tied to a specific project or program, they are real and necessary costs of doing business.

HealthInno is committed to supporting partner organizations while ensuring compliance with funder requirements. Our policy on allowable indirect costs for subawards and subcontractors is as follows:

Approved Indirect Cost Rates

The following rates may be applied to the direct costs of any project or program subawarded by HealthInno:

  • U.S. colleges/universities and hospitals/health systems — 10%

  • Nonprofit organizations — 20%

  • For-profit organizations and government entities — 5%

Exceptions

  • Sponsor restrictions: If the prime sponsor sets a lower limit on indirect costs, HealthInno will cap F&A at the rate permitted by the sponsor.

  • High third-party costs: If consultant or contractor costs (i.e., subcontracts or sub-grants) make up more than one-third of the total direct costs of a project, the allowable indirect cost rate applied to those third-party costs is limited to 5%.

Definitions

  • Indirect Costs: General overhead and administrative expenses necessary to support the overall operations of a grantee, but not directly attributable to a specific project or program. Examples include human resources, finance, accounting, information technology, and legal services, as well as salaries, benefits, rent, utilities, supplies, and equipment.

  • Direct Costs: Expenses that can be specifically and exclusively attributed to a project or program. Examples include salaries and benefits for project staff, travel, materials, and consultant/contractor fees directly required to carry out the funded work.