What is Cost Sharing?
Cost Sharing represents the sponsored project or program costs (direct and indirect) that would normally be borne by a sponsor but instead are covered by the University or a third party, such as a subcontractor or an unfunded collaborator. “Cost matching” is often used interchangeably with the term “cost sharing”; however, the term “cost matching” refers to cost sharing agreements in which the amount of sponsor funding is based on an equal or proportionate commitment (e.g., 1:1) from the University. There are three main types of cost sharing:
- Mandatory Cost Sharing: Cost sharing required by the sponsor as a condition of eligibility for an award. A mandatory cost sharing requirement must be communicated in a proposal solicitation. In these situations, a proposal must demonstrate/commit to the required cost sharing. Mandatory cost sharing is typically explicitly referenced in an award document. Mandatory cost sharing must be properly documented and tracked for cost accounting and compliance purposes.
- Voluntary Committed Cost Sharing: Cost sharing not required by the sponsor as a condition of award but provided at the discretion of the institution and meeting Northwestern, sponsor, and Uniform Guidance criteria. Voluntary Committed Cost Sharing, with required institutional approvals, is a binding, auditable obligation and is primarily (though not always) referenced in an award document. Voluntary committed cost sharing, which may consist of in-kind and cash types, must be documented in the proposal budget and tracked in the university financial and/or effort reporting system for cost accounting and compliance purposes.
- Voluntary Uncommitted Cost Sharing: Cost sharing of effort or other institutional support not required by the relevant program solicitation, whether or not referenced in the proposal or award. It is not formally tracked or auditable.
Cost Sharing Resources
If a request for institutional (Office for Research) cost sharing will be made, refer to the below documents for guidance. All letters of support from the Vice President for Research – both those with cost sharing and those with no measurable support – should be submitted through the VPR Signature Request Form for Proposals.
Guidance and Job Aids
- Office for Research Cost Share Guidance
- Cost Share Decision Tree
- Cost Share Roles and Responsibilities
- Cost Sharing on Sponsored Programs Policy