Indirect Costs of Research at the University of Guelph

Most funding for university research is obtained by faculty through grant competitions offered by various funding agencies and sponsors, or through developing contracts with government, NGO’s or industry. The direct costs of performing the research are usually well understood, but there are many other significant costs involved in research that are not immediately obvious, nor can they always be attributed to a specific research project.  None the less they are real costs and are incurred by the University for all research activities. These additional, non project specific costs are known as, indirect costs.

Research Grants and Research Contracts

The University enters into a variety of agreements with other parties to support its research enterprise, including research agreements with sponsors pursuant to which the University secures a commitment from sponsors to financially support research projects. The terms of research agreements can vary from the most basic to very complex. The two main types of research agreements are Research Grants and Research Contracts. For the purposes of implementing its indirect cost policy, the University uses the following key criteria to distinguish Research Grants from Research Contracts:

Research Grants (Indirect Cost Rate = 25%)

Research Grants contain the following three key elements: 

a. There is no restriction or delay in the dissemination of the results of the research project.

b. The sponsor does not own or license intellectual property (data, copyright, trademarks patents, etc.) resulting from the research project.

c. There is no warranty with respect to standard of performance (e.g., Good Laboratory Practice, Good Clinical Practice) or the research results.

Research Contracts (Indirect Cost Rate = 40%)

A deviation from any of the three key elements of a Research Grant listed above will result in the research agreement being deemed a Research Contract.