I agree with Carolyn, better to charge the full rate but arrange to return what you collect to the PI in an account that supports the project.

At the Indiana University School of Medicine we return 75% of the indirect income that we receive back to the departments, but it doesn't necessarily reach the PIs as it is part of an annual base allocation that also includes space charges.  When I am approached to "waive F&A" for a small-budget project with potential, I arrange to return the indirect income to the project outside of the standard model...in sense I skim it off the top, but for the right reasons.

And not in the case of a for-profit entity.

Robert Aull

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Carolyn Elliott-Farino
Sent: Tuesday, February 16, 2016 9:01 AM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] Financial Analysis Using Lower OH Rates

And I would charge the full F&A but then make it available to the PI if the relevant authorities agree (dean, chair, VPs, etc.). You collect the overhead but plow it back into the research.

However, I agree with Lindsey that if you are dealing with a for profit entity, you need to make a good argument on not charging more for the project (if the PI needs the indirects for the project, you should have charged more).

Carolyn

-----Original Message-----
From: Research Administration List
[mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Hathaway, Charles
Sent: Monday, February 15, 2016 5:09 PM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] Financial Analysis Using Lower OH Rates

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
12201 Research Parkway, Suite 501 | Orlando, FL 32826-3246
P: (407) 882-0271<tel:%28407%29%20882-0271> | F: (407) 823-3299<tel:%28407%29%20823-3299> | xxxxxx@ucf.edu<mailto:xxxxxx@ucf.edu> | www.research.ucf.edu<http://cp.mcafee.com/d/avndy1J5xZZYsNtZATsSzuXWtQT7xN
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