Re: New Indirect Cost Return (IDCR) Policy
To: Faculty and chief administrative officers
March 21, 2022
A central element of the inaugural Strategic Plan is our ambitious goal of being the youngest campus to achieve R1 status. Achieving this goal will require a significant partnership between the administration and faculty. One area where the administration can help support the faculty is the indirect cost return (IDCR) on grants. On November 1, 2021, we sent a memo to Senate leadership outlining the new IDCR policy for the campus and we would like to provide a brief overview of the policy for the research community.
- 19.9% of all IDCR is retained by the Office of Research and Economic Development (ORED) specifically to support grants, as agreed with the Office of the President for all UC campuses;
- Of the remaining 80.1%, we are increasing the campus’ distribution of IDCR from 20% to 25%;
- The Principal Investigator’s (PI’s) share of IDCR will increase from 5% to 7.5%, with the exception of when a grant is supported by an Organized Research Unit (ORU). In this case the PI receives 6.25% and the ORU 1.25%;
- 2.5% of IDCR will be retained by the PI’s department, with the exception of when a grant is supported by an ORU. In this case the PI’s department will received 1.25% and the ORU 1.25%;
- A PI’s dean will receive 5% of the IDCR with the exception of when the PI’s grant is supported by an ORU. In this case the dean and the ORU will each receive 2.5% of the IDCR;
- The Provost’s office and ORED each receive 5% of the IDCR;
- IDCR will be awarded on all grants, not just those that are fully encumbered, and pro-rated based on the percentage of IDCR provided relative to a fully encumbered grant;
- For grants that exceed $5M in total costs (direct and indirect costs), the PI will be awarded 50% of the IDCR remaining after the 19.9% is provided to SPO and no other IDCR will be provided to the other entities mentioned above;
- The campus’ IDCR will be increased to 30% when the three-year moving average of research expenditures exceeds $80M and to 35% when it exceeds $100M.
The new IDCR policy outlined above will take effect this fiscal year (FY22) for any research expenditures incurred. The new allocation rules will be applied to any existing and new grant awards. The IDCR for FY22 will be provided after the close of the fiscal year and all research expenditures materialize and are documented. Therefore, changes in the IDCR allocations will materialize late in the Fall 2022 semester when disbursements are traditionally made.
Additional details on the revised IDCR policy are summarized in the attached memo to the Senate. We appreciate the Senate’s review of this revised policy earlier this year and the thoughtful comments provided by many of the Senate Committees.
We hope that these changes will provide the necessary support and incentive structure for you to continue to excel in your grant writing. Our recent progress, reaching over $45M in research expenditures, has been outstanding and we commend you all for your efforts. We look forward to continued partnerships to support the research enterprise moving forward.
Interim Vice Chancellor and Chief Financial Officer
Academic Senate Chair
Marjorie S. Zatz
Interim Vice Chancellor for Research