1. Purpose and Scope
This policy outlines Sentinel Bio’s approach to funding indirect costs (also known as “overhead” or “facilities and administrative costs”) for grant recipients. It applies to all grants made by Sentinel Bio in pursuit of our mission to prevent catastrophic pandemics.
2. Policy Statement
Sentinel Bio funds both direct project costs and a limited portion of indirect costs necessary to support grant activities. For all grant recipients, indirect costs may not exceed 10% of the total direct costs of the grant.
3. Definitions
3.1 Direct Costs
Direct costs are expenses incurred by the specific team, center, or unit that is directly executing the granted project. These typically include:
- Salaries and benefits for all staff within the executing unit (including support staff like event planners, communications leads, and executive assistants assigned to that unit)
- Travel expenses for staff within the executing unit
- Equipment and supplies used by the executing unit
- Office space and facilities costs for the executing unit
- Communications and events costs specific to the executing unit
- Other expenses incurred specifically by the executing unit
For example, if funding a university research center, all costs incurred by that center (including its administrative staff) would be considered direct costs. If funding a specific program team within a larger organization, all costs incurred by that program team would be considered direct costs.
3.2 Indirect Costs
Indirect costs are expenses incurred by the broader institution or organization that houses the executing unit, which support overall operations but are not specific to the funded unit. These typically include:
- Salaries for institutional leadership and administrative staff (e.g., university presidents, organizational CEOs)
- Central administrative services (e.g., institutional HR, finance, legal departments)
- Institution-wide IT infrastructure and systems
- General facilities costs for shared institutional spaces
- Institutional insurance and compliance costs
- Other organizational overhead not specific to the executing unit
For example, if funding a university research center, costs incurred by the broader university or school would be considered indirect. If funding a program team within a larger organization, costs incurred by the organization’s central operations would be considered indirect.
4. Calculation and Application
The indirect cost rate is calculated as follows:
Indirect Cost Rate = (Total Indirect Costs / Total Direct Costs) × 100%
Example:
- Total maximum grant amount would be $110,000
- For a grant with $100,000 in direct costs
- Maximum allowable indirect costs would be $10,000 (10%)
5. Important Notes
- The 10% rate is the maximum ceiling. Organizations with lower actual indirect cost rates should budget their true rates rather than defaulting to the maximum.
- This policy applies equally to:
- Universities and research institutions
- Non-profit organizations
- Other grant recipients
- For grants involving sub-awards, the 10% maximum applies to both primary recipients and sub-recipients.
- Sentinel Bio Inc. reserves the right to:
- Request documentation supporting indirect cost calculations
- Negotiate lower rates based on project-specific circumstances
- Deny indirect cost requests that exceed actual organizational rates
6. Rationale
This policy aligns with our commitment to maximize the impact of our funding while ensuring grant recipients can maintain sustainable operations. The 10% cap reflects our focus on directing resources primarily toward project activities that advance our mission of pandemic prevention. This approach aligns with common practices among institutional funders in the philanthropic sector, who typically set defined limits on indirect costs to ensure efficient use of charitable funds while supporting grantee operations.
7. Questions and Contact
For questions about this policy or its application to specific grants, please contact us at info@sentinelbio.org
VERSION HISTORY
Last revision: 12-02-2024