1. Purpose

The purpose of this policy is to establish guidelines for the reimbursement of indirect costs associated with research projects funded by grants, contracts, or other sources. Indirect costs are necessary for the proper administration and execution of research projects, and this policy ensures that the organization recovers an appropriate portion of those costs to support its continued operations and research infrastructure.

  1. Scope

This policy applies to all research projects, including but not limited to those funded by government agencies, educational institutions, private foundations, and corporate sponsors. The indirect costs for all qualifying research projects will be allocated and reimbursed according to this policy.

  1. Indirect Costs Definition

Indirect costs refer to expenses that are not directly attributable to a specific research project but are necessary for the general operation of the organization and the conduct of research. These include costs such as:

    • Administrative and clerical salaries
    • Office supplies and equipment
    • Utilities (electricity, water, heating, etc.)
    • Maintenance of facilities
    • Institutional support services (finance, human resources, IT support, etc.)
  1. Indirect Cost Rate

The Pet Care Trust allows up to 10 percent of the yearly budget to be applied to indirect costs, if your institution charges for these costs. You must calculate your own 10 percent indirect costs and show them as a separate line item above each year’s grand total. If your institution charges less than 10 percent, you may only claim the lower percentage. 

  1. Application of Indirect Costs

Indirect costs will be applied to the total direct costs of a research project, which may include:

    • Salaries and wages of researchers and project staff
    • Equipment and supplies
    • Travel costs
    • Consultant and subcontractor fees
    • Other direct costs directly related to the project

Indirect costs will be calculated and billed separately from direct costs in compliance with the terms of the funding agreement.

  1. Exceptions to the Indirect Cost Rate

There may be cases where the funding agency:

    • Does not allow indirect costs
    • Limits the percentage of indirect costs to be reimbursed
    • Requires a different methodology for calculating indirect costs

In such cases, the nonprofit will comply with the terms outlined by the funding agency and adjust the indirect cost recovery rate as needed.

  1. Review and Amendments

This policy will be reviewed annually or whenever significant changes occur in the nonprofit’s funding structure, tax laws, or grant regulations. Any amendments to the policy will be approved by the Board of Directors.