Direct comparison
Foundation vs. Federal Indirect Cost Rates
How Gates, MacArthur, and Ford set indirect cost rates for grantees, and how that differs structurally from federally negotiated NICRA rates.
Written and maintained by CASRAI Editorial Board
Last updated
Ask CASRAI · included with Regulatory Radar
Ask about Foundation vs. Federal Indirect Cost Rates
Ask CASRAI answers research-administration questions and cites the passages behind every claim — and says so when the corpus does not cover something, instead of guessing. It comes with a Regulatory Radar subscription at $29 a month, alongside the daily digest of regulatory changes and the dashboard of what changed.
150 questions a day, on this site, over the API, or inside your own tools through the CASRAI MCP server.
Everything CASRAI publishes — this page, the dictionary, the guides and the news — stays free to read, with no account and no card.
How do Private Foundations, Federal (2 CFR 200 / NICRA) compare side by side?
The table below compares Private Foundations, Federal (2 CFR 200 / NICRA) across 7 procurement-relevant dimensions, from how the rate is set through applies to sub-grantees/subawards.
Side-by-side comparison
| Dimension | Private Foundations | Federal (2 CFR 200 / NICRA) |
|---|---|---|
| How the rate is set | Published unilaterally by the foundation; not negotiated with the grantee | Individually negotiated between the institution and its cognizant federal agency (HHS or DOD for most higher ed) |
| Typical rate/cap | Gates: 0% (govt/other foundations), up to 10% (US universities/colleges), up to 15% (NGOs, multilateral orgs, non-US universities, for-profits). MacArthur: flat 29% minimum. Ford: 25% minimum (raised from 20% in 2023) | Commonly 25%-70% of MTDC at major research universities/medical centers; de minimis rate of up to 15% of MTDC available without negotiation to entities with no current negotiated rate (2 CFR 200.414(f), raised from 10% for awards issued on or after October 1, 2024) |
| Cost base | Gates: Budgeted Indirect Costs / Budgeted Total Direct Costs, foundation-defined. MacArthur/Ford: percentage of project costs, no itemization required | Modified Total Direct Costs (MTDC) as defined in 2 CFR 200 Appendix III |
| What counts as "indirect" | Gates pushes dedicated project management/support into direct costs wherever possible, narrowing its own indirect pool | Uniform Guidance requires many administrative/facilities costs into the indirect pool regardless of project dedication |
| Negotiation/audit burden on grantee | None for MacArthur/Ford (automatic); Gates may request substantiation but does not require a formal negotiated agreement | Substantial: formal rate proposal, supporting cost data, negotiation with and periodic renewal through a cognizant agency |
| Stability over time | Can change by foundation policy update at any time (e.g. Gates's 2017 revision, Ford's 2023 increase, MacArthur's 2020 adoption) | Legally protected once negotiated; recent attempts at a flat government-wide cap (NIH's 15% notice, a DOE cap) were enjoined/rescinded rather than taking effect |
| Applies to sub-grantees/subawards | Gates: sub-grantee's own organization-type cap applies independently of the primary grantee's cap | Subrecipient may hold its own separate NICRA, or elect the de minimis rate of up to 15% of MTDC, independent of the prime recipient's rate |
Common questions
Common questions about Private Foundations vs Federal (2 CFR 200 / NICRA)
Does the Gates Foundation match a grantee's federally negotiated (NICRA) rate?
+
No. Gates's published FAQ states that it classifies dedicated project management and support costs as direct rather than indirect, so its percentage is calculated on a narrower, foundation-defined cost base than a federal NICRA and is not designed to reproduce the same total reimbursement.
Is Gates's 10% cap for US universities the same as the federal de minimis rate?
+
No, and since 2024 they are not even the same number. The federal de minimis rate under 2 CFR 200.414(f) is an opt-in rate of up to 15% of MTDC, available to any recipient or subrecipient that has no current negotiated rate, raised from 10% for awards issued on or after October 1, 2024. Gates's up-to-10% figure is a foundation-specific maximum calculated on Gates's own, narrower definition of direct costs, and applies only to US universities and community colleges. Where the two numbers do line up again -- NIH reverted its own awards to a 10% de minimis rate in Notice NOT-OD-26-072, April 2026 -- that is a coincidence of figures, not a shared mechanism.
Why did MacArthur and Ford move to flat indirect cost minimums instead of negotiating rates per grantee?
+
Both cite the nonprofit "indirect cost equity" movement. MacArthur based its 29% figure on a commissioned study of IRS Form 990 data across 130,000+ nonprofits identifying the minimum rate associated with financially healthy organizations; Ford raised its minimum from 20% to 25% effective January 1, 2023, alongside similar commitments from Hewlett, Open Society, and Packard.
Are foundations legally required to follow 2 CFR 200 cost principles?
+
No. 2 CFR Part 200 governs federal awards specifically; foundations set policy voluntarily and are free to define direct/indirect costs, rates, and mechanics however they choose, which is why Gates, MacArthur, and Ford each publish distinct, non-interchangeable policies.
