Announcement from Patrick Fitzgerald, FAS Associate Dean for Research Administration and Jay Herlihy, FAS Associate Dean for Finance

April 27, 2017

The FAS/SEAS will be issuing a new policy governing assessments on gifts and sponsored awards (“grants”).  The new policy, which will be effective on gifts received on or after July 1, 2017 and on sponsored awards submitted for funding on or after July 1, 2017, will standardize the collection of assessments on current use gifts and grants made by non-federal entities (excluding industry sponsored research agreements) at 15%.  Assessments on gift and grant funds represent a partial reimbursement to FAS/SEAS for costs that FAS/SEAS incurs when we accept external funding.  When sponsors and donors do not pay our minimum assessment, the ancillary (i.e., indirect) costs associated with the funded activity must be absorbed by the FAS/SEAS budget, which reduces funds available for reinvestment. 

The new policy is designed to ensure all gifts and grants contribute more fairly to the recovery of indirect costs and to eliminate the incentive to classify funds as grants in order to reduce the assessment.  Sponsors (grants) and donors (gifts) will be expected to comply with the minimum assessment of 15% on funding provided to FAS/SEAS.  If the donor or sponsor does not support the 15% assessment, faculty or departments/centers will be asked to make up the difference.  The shortfall can be met by charging gift/grant funds directly for costs that would otherwise be borne by the FAS/SEAS budget (“budget-relieving costs”).  Examples of budget relieving costs include directly charging administrative salaries, space costs, or faculty salaries to the gift or grant.  Certain categories of expenditures will not be subject to the 15% assessment, as outlined in the policy, as well as assessments limited by law or government restriction. 

The new policy provides options for faculty and departments or centers to pursue if the sponsor/donor does not pay the minimum assessment.   In situations where none of these options are feasible, a request for funding to pay for the waiver may be made to the Dean of FAS.  However, a request to the Dean should be the final option, not the first. 

Currently, we are developing supporting documentation for enacting this policy, such as FAQs, guidance for budgeting at proposal stage and mechanisms for tracking budget-relieving costs over the life of the gift or grant.

If you have questions on the new policy that relates to sponsored awards, please contact Patrick Fitzgerald, Associate Dean for Research Administration (pwf@fas.harvard.edu).  Questions related to gifts should be directed to Jay Herlihy, Associate Dean for Finance (jherlihy@fas.harvard.edu).