Cost Sharing

The OMB Circular A-110 defines cost sharing as “any project costs not borne by the sponsors but supported by contributions from the recipient and third parties, both cash and in-kind.” The Uniform Guidance (2CFR 200) defines cost sharing or matching as “any portion of project costs not paid by Federal funds (unless otherwise authorized by Federal statute)”, however, the UG goes on to state that “under Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity.”

Cost sharing consists mainly of direct costs, such as employee effort related to their salaries, fringe benefits, NGN costs, supplies and materials, equipment, and travel, but at times, it can also include indirect costs. This is known as indirect foregone (reduction or waiver of federally-negotiated F&A rate) – which is not utilized in NIH & AHRQ applications and NIH & AHRQ related subaward applications. An example of how cost sharing might appear within the budget or budget justification would be: ”Dr. John Doe, Co-I, will devote 10% of his time(or 1.2 person months) to the project at no cost to the sponsoring agency. Dr. John Doe’s salary will be paid using UC San Diego departmental funds.” The funds that UC San Diego uses for cost sharing must be unrestricted, non-Federal funds. In addition to using departmental funds as indicated previously, these funds may also come from a gift or an endowment or from the salaries and fringe benefits of faculty and on the rare occasion other UCSD-paid staff.


1. Voluntary cost sharing: in most cases, voluntary cost share can be re-written so as to no longer have an implication of cost share.
a. Example of committed cost sharing: if effort is in the proposal, but with no request for salary voluntary or if original effort commitment is met, but not charged to the grant = voluntary committed cost sharing
b. Example of uncommitted cost sharing: if higher effort is spent than committed, but not charged to the grant = voluntary uncommitted cost sharing
2. Mandatory cost sharing
a. Award eligibility criteria and needs to be included in the FOA. This sometimes is seen as institutional commitment.

1. UC San Diego Equipment cost sharing is where partial cost of an item of equipment may be requested on a proposal budget with the remainder to be cost shared by the University. Documentation can be in the form of a letter that reflects the detail of the cost-sharing, signed by the individual who has the authority to commit the funds.
2. UC San Diego Expenditure cost sharing consists mainly of direct costs, such as employee effort related to their salaries and fringe benefits, supplies and materials, equipment, travel, fellowships, (and applicable indirect costs) provided from internal UCSD non-Federal, unrestricted funding. 
3. Non-UC San Diego cost sharing (3rd Party) is where costs are provided by another entity that is participating in the proposal.