Indirect Cost Policy for Applicant & Grantee Organizations
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Definitions
Health Foundation defines indirect costs as:
 Overhead expenses or ongoing operational costs incurred by the applicant.
 Administrative or other expenses which are not directly allocable to a particular activity or
project.
 Expenses related to general operations of an organization that are shared among projects
and/or functions.
Basic examples of indirect costs include:
 Executive oversight, existing facilities costs, accounting, grants management, legal expenses,
utilities, and technology support.
Health Foundation defines direct costs as:
 Costs directly attributable to the project.
 Expenses incurred specifically and solely for the project.
Additional information is provided, below, to distinguish between indirect and direct costs.
Maximum Indirect Cost Rates
Health Foundation allows for indirect costs calculated on a percentage basis, based on the size of
your organization’s budget. Your organization’s budget is defined as its revenues from the most
recently completed fiscal year.
If your organization’s budget is at or below $500,000: Your indirect cost rate is up to 15%
If your organization’s budget is above $500,000: Your indirect cost rate is up to 10%
The rates provided above are the maximum rates allowed under the Foundation’s policy. Given the
policy provides an “up to” percentage amount, the approved indirect cost rate may be anywhere
from 0% to 15% (for organizations with a budget at or below $500,000) or anywhere from 0% to 10%
(for organizations with a budget above $500,000) depending on the specific situation.
Calculating Indirect Cost
Indirect Cost Calculation = Rate % X Total Direct Costs
When calculating the amount of indirect cost, use the sum total of all the project’s direct costs. This
includes project-specific expenses such as salaries, fees, consultants, and sub-contracts. Capital
costs in excess of $500, such as equipment purchases, are not considered direct costs and are
excluded from the indirect costs calculation.
Including Indirect Cost in a Budget
The Health Foundation grant application includes a proposal budget form. The form includes a line
item for indirect costs, calculated using the formula as described above.
In general, indirect costs do not need to be itemized. However, Health Foundation staff may request
an indirect cost itemization depending on the circumstances of the request.
Indirect and Direct Cost Examples
Funds requested or provided as indirect costs may be used towards:
 Rent for an existing facility
 Utilities (including electricity, internet, and telephone) for an existing facility
 Insurance
 General office supplies
 Executive and managerial oversight (including CEO, CFO, and COO)
 Shared expenses that are not directly attributable to the project such as audits, human
resources, grant writing/fund development, legal counsel, and IT support.
Funds requested or provided as direct costs may be used towards expenses directly attributable to
the project such as:
 Salaries, benefits, and taxes for staff positions that have distinct and measurable effort on the
project
 Consultants with a scope of work that is specific to the project
 Sub-contracts for project-specific work sourced from the applicant/grantee organization to
another organization
 Supplies and materials used exclusively by the project
Other Funders’ Policies
Health Foundation of South Florida is a charitable organization and is not committed to matching the
indirect cost rates of the U.S. government or other entities. We believe our policy is consistent with
that of many private foundations that have a flat or maximum rate that caps the amount an
applicant or grantee organization can receive for indirect costs.
Questions
Please contact a Health Foundation Program Liaison to discuss questions you may have regarding
this policy or the definitions, rates, calculations, and examples.