Common use of Cost Share Determination Clause in Contracts

Cost Share Determination. Effective Date: 10/30/2020 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost sharing may be appropriate include: ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including an APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFO. Even after USAID issues a NOFO, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirements. If an activity generates program income, the AO may approve use of program income to finance the non-Federal cost-share of an award (see also 2 CFR 200.307 and the standard provision “Program Income”).

Cost Share Determination. Effective Date: 10/30/2020 08/01/2019 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost sharing may be appropriate include: ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including ) or an Annual Program Statement (APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFONOFO or APS. Even after USAID issues a NOFONOFO or APS, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirements. If an activity generates program incomea profit, the AO must consider the best uses of program income and document this in the award. In accordance with 2 CFR 200.307 and the prior written approval of the AO, USAID may approve use of program income to finance the non-Federal cost-cost share of an award (see award. The AO may also 2 CFR 200.307 and make the standard provision “Program Income”)program income additive to USAID’s contribution without a cost sharing requirement when this would help achieve program objectives, such as sustainability.

Cost Share Determination. Effective Date: 10/30/2020 08/04/2020 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost sharing may be appropriate include: ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including ) or an Annual Program Statement (APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFONOFO or APS. Even after USAID issues a NOFONOFO or APS, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirements. If an activity generates program income, the AO may approve use of program income to finance the non-Federal cost-share of an award (see also 2 CFR 200.307 and the standard provision “Program Income”).

Cost Share Determination. ‌‌ Effective Date: 10/30/2020 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular specific circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost sharing may be appropriate include: context.‌ ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. funding.‌ ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. activities.‌ ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). award.‌ The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including an APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFO. Even after USAID issues a NOFO, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. applications.‌ USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. resources.‌ The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. share.‌ USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirementsrequirements.‌ 303.3.10.2 Cost Sharing in NOFOs‌‌ Effective Date: 11/19/2020 If USAID makes a determination to require cost sharing in an award, it must state the requirements in the announcement. If an activity generates program income, the AO may approve use of program income to finance the non-Federal cost-share of an award (see also 2 CFR 200.307 USAID issues a NOFO and the standard provision “Program Income”).Planner decides‌

Cost Share Determination. ‌‌ Effective Date: 10/30/2020 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular specific circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost sharing may be appropriate include: context.‌ ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. funding.‌ ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). award.‌ The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including an APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFO. Even after USAID issues a NOFO, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. applications.‌ USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. resources.‌ The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. share.‌ USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirementsrequirements.‌ 303.3.10.2 Cost Sharing in NOFOs‌‌ Effective Date: 11/19/2020 cost sharing, or using cost sharing to break ties among applications with equivalent scores after evaluation against all other factors. Note that excessive reliance on cost sharing during the merit review may unfairly favor larger, better-funded organizations.‌‌‌‌ 303.3.10.3 Meeting Cost Sharing Requirements‌‌ Effective Date: 12/26/2014 In the award budget, cost share must be expressed as a dollar figure rather than a percentage to assist in monitoring the amount. Cost sharing applies throughout the life of an agreement, and the AOR must monitor the recipient's financial reports to ensure that the recipient is making progress toward meeting the required cost share. If an activity generates program incomeit appears that the recipient is not making adequate progress, the AOR must bring this to the attention of the AO. The AO then must initiate discussions with the recipient to resolve the issue. The AO has the authority to reduce the amount of USAID incremental funding in the following funding period or to reduce the amount of the agreement by the difference between the expended amount and what the recipient agreed to provide. If the award has expired or been terminated, the AO may approve use of program income request the recipient to finance refund the non-Federal cost-share of an award (see also 2 CFR 200.307 and the standard provision “difference to USAID.‌ 303.3.10.4 Program Income”).Income‌‌ Effective Date: 08/04/2020

Cost Share Determination. Effective Date: 10/30/2020 08/01/2019 Although there is no general legislative requirement that recipients of grants or cooperative agreements must cost share, cost sharing is an important element of the USAID-recipient relationship. When used, its application should be flexible, case- specific, and used to support or contribute to the achievement of results. USAID should use cost sharing after considering whether it is appropriate for the recipient organization in the particular circumstances, in particular, the programmatic and technical context. There is no set formula for cost sharing. There is not a suggested numeric reference point. Cost sharing should be based on the needs or purpose of the activity. Examples of when cost cost-sharing may be appropriate include: ● When there is a programmatic rationale for cost sharing, such as helping to ensure that the recipient will build its organizational capacity for mobilizing resources. For example, when building fundraising capability is an objective of an activity, it would be appropriate to require the recipient to meet specific private financing targets as a condition of USAID funding. ● When it is critical that the activity continues after USAID assistance ends, cost sharing requirements can ensure that the recipient establishes adequate alternate sources of funding. ● When an award supports an activity initiated by the recipient or an unsolicited application. Because most USAID funding is reserved for development priorities the Agency has already established, only limited funding may be available for even the best of other programs. USAID may only be able to partially fund these other activities. ● To otherwise give the recipient a financial stake in the success of a program. In all of these cases, the AO should discuss the amount and terms of cost sharing with potential recipients prior to award (see ADS 200saf, Guidance on Consultation and Avoidance of Unfair Competitive Advantage). The Activity Planner must determine the appropriate cost share for individual grants and cooperative agreements. The Planner must include this determination in the financial analysis of the program prior to issuance of a Notice of Funding Opportunity (NOFO), including ) or an Annual Program Statement (APS). In the case of awards solicited with unrestricted eligibility, the Planner and AO are encouraged to communicate with a broad range of potential applicants regarding appropriate cost sharing prior to issuance of the NOFONOFO or APS. Even after USAID issues a NOFONOFO or APS, it may be appropriate to consider special circumstances and change the cost share requirement. In the case of restricted eligibility awards, the AO may wish to discuss or negotiate the cost share with the applicant, especially those who submit unsolicited applications. USAID may not use a set formula in determining the level of cost share. The Planner should take several considerations into account when making cost share decisions. For example, it might be difficult for a recipient to meet a cost share requirement during an activity with a short timeframe. A specific program may be risky and discourages potential recipients from providing meaningful contributions. Eligibility may be limited to indigenous organizations with limited resources. The Planner must write a memorandum to the AO documenting the factors that were considered when determining the amount of cost share. USAID may require cost sharing regardless of the type of organization, whether non- profit (U.S. and international private voluntary organizations, local nongovernmental organizations, universities, foundations, and others) or commercial organizations, including for-profit businesses. In the case of a non-U.S. recipient, it is important to be flexible when establishing cost sharing requirements. If an activity generates program incomea profit, the AO must consider the best uses of program income and document this in the award. In accordance with 2 CFR 200.307 and the prior written approval of the AO, USAID may approve use of program income to finance the non-Federal cost-cost share of an award (see award. The AO may also 2 CFR 200.307 and make the standard provision “Program Income”)program income additive to USAID’s contribution without a cost sharing requirement when this would help achieve program objectives, such as sustainability.