Exactly.  This needs to be decided case-by-case.  The question to ask is whether the success of that $20K research project will lead to greater funding down the road.
CH
________________________________
From: Research Administration List [xxxxxx@lists.healthresearch.org] on behalf of Lindsey Demeritt [xxxxxx@GMAIL.COM]
Sent: Monday, February 15, 2016 4:45 PM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] Financial Analysis Using Lower OH Rates

Elise,
Not having numbers, what I can tell you is that in those circumstances, I often recommend faculty look at the benefit to the organization of participating in such a program, and then, using that benefit, to write a justification for a reduction, if not a waiver, of OH.  At $20k total cost and a 60% OH rate (argument's sake), the total available direct is $12,500 and to your point, how much more could be done if $7500 of the total wasn't going to OH.  Now, I've only ever done this with non-profit or US federal/state agency proposals/pass-thru...never on for profit funded research activities.  But, there is often a good argument to make that the value of the program may be more beneficial to the mission of the institution, than the small differential on the OH recovery.

Lindsey

On Mon, Feb 15, 2016 at 1:38 PM, Elise Dantuma <xxxxxx@ucf.edu<mailto:xxxxxx@ucf.edu>> wrote:
Hi everyone,

I’m curious to know if anyone has performed a financial analysis on utilizing a lower overhead rate on small projects (let’s less than $20,000 total costs) and how this affects overhead brought into the institution. I know at the end of the day, this will probably always bring in a lower overall overhead rate to the institution as a whole, but how much of an impact would this have?

I’m curious to know because generally with smaller funded projects (less than $20,000 total costs), if you have an overhead rate of 50%, this is a substantial amount of the funding. This can be especially challenging if the agency caps a project on total costs (inclusive of overhead).

On one side, the full overhead is the costs of running a research program and is important. On the other side, what can a PI perform with only half the funds? Is the institution competitive then?

Has anyone performed a financial analysis on this? How do other institutions approach small projects where the agency does not cap overhead and the funding is limited in dollar value?

Feel free to respond here or to me directly.

Thanks everyone!!
Elise

Elise Dantuma, MBA | Sr. Proposal Manager
Office of Research & Commercialization | University of Central Florida
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