Question

Why is it important to include overhead costs in a grant budget? Please vote your source of you used one. Thank you for your help.

Answer 1

The amount of overheads is indirect cost, which is not directly related with production like material cost or labor cost; but still important because of cash spending. Examples of overhead costs are salaries to staffs, general insurance, depreciation, etc.

Direct cost together with overhead cost constitutes the overall cost. If a grant proposal doesn’t support such overhead cost, then the amount of such cost would be a loss to the organization because of non-recovery. In that case the proposal should not be accepted.