Kauffman Foundation Indirect Cost Rate – Grants Policy

In support of our renewed funding priorities, the Kauffman Foundation Indirect Cost Policy is designed to ensure all grant proposals reflect the “true costs” for the projects being funded. Our IDC policy applies to Project Grants, Research Grants, and Collective Impact Grants.

Indirect costs are general overhead and administrative costs like rent, information technology, human resources, and office supplies, etc., that support the entire operations of a grantee. When these costs are covered, it enables grantees to adequately pursue their critical, mission-driven work, unfettered by additional financial pressures.

The Kauffman Foundation now provides an indirect cost rate of 15-25% on project grants based on the grantee organization’s budget size.

25% for organization with budgets of $100 million or less.
15% for universities, government, or other organizations with budgets over $100 million.

This new structure covers the reported indirect costs of most of our grantees and will ensure the vast majority of our project grants have the flexibility and support to cover the true cost of their work.

Direct vs. indirect costs

Direct costs are expenses that are essential and clearly linked to a specific grant-funded project. These might include salaries or travel expenses for the project staff, stipends for consultants, and costs associated with hosting meetings.

Indirect costs, on the other hand, are expenses that support the broader operations of an organization and cannot be easily tied to a single project. These might include costs from the accounting department, IT services, or executive offices. While not directly connected to a specific project, these costs are crucial for the overall functioning of the organization.