Cost sharing is the portion of a project or program cost that will not be borne by the sponsor. Cost sharing occurs when either a sponsor requires a recipient to commit funds beyond an award amount, or the award recipient voluntarily commits other funds to a project or program. When cost sharing for Federal awards, the obligation must be met using non–Federal fund sources. Note that such sources may only be "used" once as cost sharing/matching funds. 

Cost sharing commitments should be held to a minimum. 

Types of Cost Sharing

There are three types of cost sharing:

1. Mandatory – Required by the sponsor as a condition of the proposal submission and acceptance of the award. The funding announcement and/or award document will outline such a requirement.
2. Voluntary Committed – Cost sharing committed in the budget proposal that is not required by the sponsor (highly discouraged since funds are usually drawn away from other institutional sources, could affect negotiated Facilities & Administrative (F&A) rate, prompt additional audits). Once offered by the institution and agreed to by the sponsor, it becomes an obligation the university must fulfill.
3. Voluntary Uncommitted – Cost sharing that is over and above an amount that was committed and budgeted for in a sponsored agreement. It is neither pledged explicitly in the proposal nor stated in the award documents, but it occurs in the course of executing a project, often when an individual expends more effort on the project than his or her commitment requires.

Cost Sharing vs. Institutional Support

Institutional Support is NOT cost share. It is a general description of how institutional resources will benefit the project, but this is not quantified in the grant proposal. Institutional support uses generalized language, and only gives estimates of value and does not require tracking and documentation in post-award as cost sharing does.

Approval of Cost Share for Your Application

Cost share should be kept to a minimum. Cost sharing has a significant financial impact on the department providing the funds and on the University as a whole. Cost sharing increases the requirements for auditable recordkeeping, adversely affects the University's recovery of indirect (F&A) costs, and reduces the flexibility of the PIs to conduct other research when their effort is pledged to specific projects.

1. Inclusion of Mandatory Cost Sharing: If your project proposes the inclusion of mandatory (required by the sponsor) cost sharing quantified in the proposal, you must obtain prior approval from Sponsored Project Services (SPS) by working with your pre-award Sponsored Project Administrator. Completing and submitting a request to SPS is not required for this purpose. Adequate documentation of a mandatory cost sharing requirement is necessary and can be in the form of the requirement as outlined in the RFP or sponsor guidelines, or an e-mail or letter format obtained from an authorized representative of the sponsor.
2. Inclusion of Voluntary Committed Cost Sharing: Anyone proposing the inclusion of voluntary committed cost sharing must first request approval via the Request for Cost Share Approval form. 
3. Inclusion of Voluntary Uncommitted Cost Sharing: Typically, approval is not required for voluntary uncommitted cost share at the proposal stage, as it is not committed in the application. Rather, if you want to go above the committed cost share for an award, you must work with your post-award team for approval during the post-award management of the award. Please see the Managing Your Award: Cost Share Reporting and Documentation page for more information about post-award management.

Cost Share in the Proposal

1. Review: 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. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity. Reference: 2 CFR 200.306(a)
2. Types of Costs: For all Federal awards, any [cost share] and all contributions, including cash and third-party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria:
   • Are verifiable from the non-Federal entity's records;
   • Are not included as contributions for any other Federal award;
   • Are necessary and reasonable for the accomplishment of project or program objectives;
   • Are allowable under Subpart E-Cost Principles;
   • Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs;
   • Are provided for in the approved budget when required by the Federal awarding agency; and
   • Conform to other provisions of [2 CFR 200.306]. Reference: 2 CFR 200.306(b)
3. Waived F&A/Unrecovered Indirect: Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount that could have been charged to the Federal award under the non-Federal entity's approved negotiated indirect cost rate. Unrecovered indirect costs, including indirect costs on cost sharing or matching, may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency. Reference: 2 CFR 200.306(c)

See 2 CFR 200.306 sections (d) through (k) for additional guidance or contact your SPS Sponsored Projects Administrator for clarifications and/or questions.

Documentation of Cost Share at the Proposal Stage

1. Cost Share from a UO Funding Source: For cost share that will be provided by a UO funding source, you should build a separate budget identifying the expenses that will be included as cost share on the proposal that will be paid from a non-Federal funding source.
2. Cost Share from a Non-UO Funding Source: Third parties can contribute to cost share (mandatory or voluntary) by donating cash or services (i.e., material/personnel/equipment) or other allowable items to the project. For the proposal application, third-party entities should include certification in a letter of commitment submitted to the UO certifying that cost sharing provided is from non-Federal sources. 

Additional Resources

See, Managing your Award: Cost Sharing Reporting and Documentation page for more information regarding tracking cost sharing after receiving an award.

See also, the Office of the Vice President for Research and Innovation's Institutional Commitment Policy and Request Process webpage for information on how to request institutional commitment from the OVPRI.