036: Indirect Cost Rates

036: Indirect Cost Rates
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Hi ChangeMakers!

Is your nonprofit including an indirect cost rate in your budget and grant applications? Did you know you can have a maximum 10% indirect cost rate according to federal regulations?

Learn why your organization should include this line item to your budget!

Today we are going to talk about indirect cost rate. The why, the how and the what of including it in your budget and grant applications. So let’s jump in!

If you do not have an indirect cost rate, you can only charge a maximum of 10% de minimus percentage towards indirect cost rate according to the OMB Super Circular (federal regulations). Even if this is for a foundation grant, I would stick with federal requirements. You do not have to go the full 10%, but I recommend that you do if you are able to justify it.

Make sure you also outline what is in this indirect cost rate. For example, does this pay for your Executive Director, Accountant, utilities, etc? Outline what you would budget from this line item. If you use indirect cost rate (without negotiations), then call it the 10% federal de minimis indirect cost rate, as that is what you are adhering to and it sounds (and is) legitimate. Organization’s can elect to use this rate if they have never received a negotiated indirect cost rate. That's crazy awesome.

Some examples of indirect cost rates include:

-Construction, costs that are required to complete but not attributable to the cost object


-Management (i.e Directors Salary)





-Electricity, Utilities

-Activities & Services that benefit more than one project

Link to OMB Super Circular 


Indirect cost rates are definitely something you and your organization should be thinking about. If you have further questions or want to discuss, we are happy to help, just let us know.


Thanks for Listening!


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