The Indirect Cost Rates in the News Are Probably Not About Your Organization
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The Indirect Cost Rates in the News Are Probably Not About Your Organization
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When a headline warns that federal indirect cost rates are being cut, it almost never says whose rates. That missing word changes everything.
Every few months a story circulates claiming overhead is being capped and indirect rates are dropping. For most local governments, nonprofits, school districts, and tribes that receive federal funding, the alarming version describes a corner of the grant world that looks nothing like theirs. This episode breaks down what an indirect cost rate actually is, what determines yours, and how to read these headlines calmly instead of bracing for a cut that was never aimed at you.
What you will hear in this episode:
- What an indirect cost rate is and why it is not padding
- The three forces that set your rate: the regulation, your own cost structure, and your funding stream
- Why the recent lower indirect rate story traces back to NIH research funding at universities, not to service organizations
- Which 2 CFR 200 protections still stand, including the 15 percent de minimis rate and pass-through protections
- The one question to ask before you apply any grant headline to your organization
Resources mentioned:
- Indirect Costs and NICRA Decoded: https://thegrantproject.com/nicra-decoded
- Work with The Grant Project: https://thegrantproject.com/contact
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