Facilities and Administration or F&A, also known as Indirect Cost, provides a valuable yet often misunderstood source of revenue to any university seeking external grant funding. F&A supports everything from the lights that switch on in a classroom to exclusively funding the Office of Research and Sponsored Programs (ORSP). Funding the ORSP can provide a return on its investment by potentially generating additional future grant funding.
F&A is a percentage of certain grant costs negotiated through the Department of Health and Human Services (HHS). Presently, ACU has negotiated an F&A percentage of 47.5% of salaries and wages for grants dispersed on campus and 28% of salaries and wages for grants dispersed off campus. So, hypothetically let’s say a department submits a grant in which they appropriately built F&A into the budget and wins the grant of $1 million. Of that, let’s propose that $100,000 is budgeted for salaries and wages for an on campus project. That means $47,500 of the total grant budget can be requested for F&A. Of the $47,500, 40% would go to support ORSP, 30% would go to the Provost’s Office, 20% would go to the department that submitted and won the grant, and 10% would go to the college where the department resides.
Some grants dictate a certain F&A percentage that is automatically calculated when the grant is submitted. If you apply for a grant with a predetermined F&A, then that percentage overrides the percentage that ACU negotiates with HHS.
Foundation grants may or may not allow F&A to be included in the grant request. If not specifically disallowed, grant seekers are asked to request at least 10% of the total budget in F&A or follow the HHS negotiated percentage and request 47.5% of salaries and wages be included as F&A.
While some may prefer to spend 100% of grant resources on the project itself, requesting the appropriate percentage of F&A benefits the entire university and adds to the potential that additional grants will be sought and funded in the future.