Martha -

As you can see there are as many answers as there are
administrators sometimes.  First a word of warning
regarding developing the budget.  You say that others are
providing "in-kind contributions."  However, it is important to
distinguish between cash contributions, in-kind (goods
and/or services), and co-funding when developing the
budget.  You don't want to end up having to return a
portion of the award because of failure to document
"matching funds."  A dispute between Fairleigh-Dickinson
and NOAA (~1990-91) regarding the documentation of
expenditures of matching funds, because of a difference
(with federal auditors) in the interpretation of the term
"matching" came close to being disastrous for the
University.  I can send you the case info and the
resultant recommendations regarding terminology if you
would like. A lot of universities have found these terms
to be helpful in avoiding confusion for all projects so
the terms have spread far beyond the original NOAA audit
issue.  However you decide to define the various types of
support which partners provide, be consistent from
proposal to proposal.

Last, if you are declaring federal funding as a
contribution make sure that there aren't any statutory
prohibitions against doing so.  For example, NOAA Sea
Grant funding cannot be used as matching for another
federal project.  A quick place to check is the CFDA
(Catalog of Federal Domestic Assistance) and/or your
award, if you already have it.  On the flip side - it will
also tell you whether non-cash contributions are
acceptable in meeting any statutory matching requirements
for federal funding which you might be seeking.

Having said that - on to the budget.  Prepare a multiple
column, itemized budget for expected cash
awards/expenditures from all sources - minimum is a single
column for the funds requsted from the agency.  It might
also include your own institution, an award from an
industrial partner, a foundation or non-profit research
concern, even, if allowable, another federal agency.
Total the direct costs for each column.  Apply your
negotiated rate to each.  For the agency column use your
negotiated rate or the rate prescribed by the agency if
different.  If the agency restricts recovery to less than
you would get from your negotiated rate, in most cases you
can declare this underrecovery as part of your
institutional contribution.  (If allowable under the regs,
move the underrecovery to your institutional contribution
column.)

Document "in-kind" goods or services in the same multiple
column format, a separate section clearly identified,
applying indirect cost rates appropriate to the source.
For a foundation or non-profit, apply their negotiated
rate, if any.  Industrial partners usually don't have a
rate but they may have a standard profit margin.  If you
include this profit margin do so as a direct cost, not as
an indirect cost and identify it as such. (This may not be
allowable in some cases.) Omit indirect costs for those
partners who have no negotiated rate.

An easy, acceptable method for determining the value of
these goods and services is to use the amount generally
charged by the research partner, or if they don't usually
"sell" the item, determine the prevailing rate for a like
item if procured from the private sector in your area.
Personnel costs can be calculated using wage/pay scales
and any benefits which accrue to the employee(s).
Industrial partners like this method of valuation -
especially if they are planning to "write it off" as a
donation.  And, they will generally provide an itemized
budget, along with their letter of support, for you to use
in preparing your proposal.  In most cases, accounting
requirements for these types of contributions are much
less demanding than for cash contributions - e.g., a
letter from the partner outlining the contribution(s) and
the period during which they were made may be sufficient.
An aside, industrial partners are more willing to provide
goods/services if they don't have to spend a fortune
keeping track of their contribution for you.  We've had
partners actually pull out because the cost of accounting
for the contribution was more than the value of the
contribution.  It didn't take us long to catch on to the
fact that we needed to make it as painless as possible for
them to support our projects, and, where possible, to not
jeopardize their ability to "write off" their
contribution.  We now do our best to place as few demands
on these good Samaritans as possible and still comply with
regs.

Our rational for applying different indirect costs rates
to contributions other than cash awards - our indirect
cost rate reflects our cost of "doing research."  It is
not a valid indicator of our partner's cost of providing
assistance.  That is better defined by using their rate
or, if allowable, usual markup for goods and services.

I can fax you budgets from current projects which show
this method for total costing of proposals if you would
like to see some of the possible combinations and
permutations. Just send me an email to my address rather
than the listserv if you think it will help.
---------------------------------------------------------------
Rosemary Ruff
Proposal Officer
School of Fisheries and Ocean Sciences
University of Alaska Fairbanks
Fairbanks, AK  99775-7220

VOICE:  907-474-6735
FAX:    907-474-7204
email   xxxxxx@ims.alaska.edu