Industry Sponsored Institute Financial Model

Funding Sources

Many institutes are funded solely by the industry sponsor through payments under the ISI Master Agreement and Master Sponsored Research Agreement. Gifts to the institute are handled by a Berkeley development officer. Gift processing is handled by UDAR. IPIRA can facilitate but does not process gifts. IPIRA personnel coordinate with research departments and UDAR.

Using multiple funding sources in the institute can create complexities as different funding sources may have “strings attached” and create conflicting obligations. Knowing your funding strategy in advance is important so that the institute can be organized in a manner to avoid conflicting obligations.

Indirect Cost Rate

The standard federally negotiated indirect cost (IDC) rate for sponsored research applies to institute funding. IDC is assessed on the direct costs of research under an institute.

The IDC is intended to cover conventional research contracts and grants, and covers only the basic costs of negotiation by IPIRA staff, award and subaward management by IPIRA’s IAO, Phoebe processing, accounting and invoicing by Contracts and Grants Accounting (CGA), and basic pre/post award and HR support by Berkeley Regional Services (BRS). Due to the complexity, scale and scope of an institute, the Executive Director should build additional support for staffing (central campus and institute) into the institute budget as direct costs.

Operational and administrative costs can be budgeted at the rate for other sponsored activities.

Funding Supplemental Operational and Administrative Costs

It is imperative that all institute activities be adequately resourced. An institute requires resources to design, implement, and maintain the institute that generally exceed the baseline levels of central office staffing that is funded by the campus through Indirect Cost (IDC) recovery. These activities are considered administratively complex research projects as defined in Uniform Guidance. Examples of services that are not funded through IDC recovery include:

  1. staffing to manage calls for proposals, receive proposals, review proposals, and submit to the sponsor on behalf of Berkeley
  2. post award/grants management services
  3. special intellectual property (IP) diligence in pre-award analyses (such as background IP analyses, determination of third party rights to be managed in proposed scopes of work)
  4. management of tax implications (e.g., “private use” in bond-funded facilities)
  5. legal analyses such as conflicting contractual rights due to faculty involvement in related research activities, and/or visitor arrangements
  6. costs for greater than ten (10) task agreements at Berkeley campus per year (an institute typically funds research by multiple PIs; each research project is handled a separate research project task order under the ISI Master Agreement)
  7. costs for greater than six (6) subawards per year to researchers outside of the Berkeley campus.

Added Financial Administration Services

The Contracts and Grants Accounting office (CGA) requires an administrative surcharge be added to the budget for additional financial services. Examples are extensive and unusual invoicing, coordinating of purchase orders with research project task orders and invoices. The amount of the surcharge be added to the budget is determined by the Executive Director and CGA, with approval by the dean and Vice Chancellor of Research.

Additional administrative costs typically arise in the following cases:

  1. Large, complex programs such research centers, program projects, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.
  2. Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting.
  3. Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
  4. Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports).
  5. Projects that are geographically inaccessible to normal departmental administrative services, such as research vessels, radio astronomy projects, and other research fields sites that are remote from campus.
  6. Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols; and multiple project-related investigator coordination and communications.