Understanding Voluntary Committed Cost Sharing: A Legal Perspective
Definition & Meaning
Voluntary committed cost sharing refers to the costs that an institution promises to contribute to a project beyond what is required by the funding sponsor. This commitment is made in the grant proposal and is acknowledged in the award documentation. Once accepted by the sponsor, these contributions become mandatory, meaning the institution must provide them in line with the terms of the award. Proper documentation of these costs is essential for accounting purposes. However, it is important to note that including voluntary committed cost sharing in grant proposals is not permitted.
Legal Use & context
This term is primarily used in the context of grant funding and research projects, particularly in academic and nonprofit sectors. Legal professionals may encounter voluntary committed cost sharing when reviewing grant proposals or managing funding agreements. It is relevant in areas such as contract law and administrative law, where compliance with funding terms is critical. Users can manage some aspects of this process through legal templates available on platforms like US Legal Forms.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A university submits a grant proposal to a federal agency, promising to contribute $50,000 of its own funds to a research project. Once the grant is awarded, this amount becomes mandatory cost sharing that the university must fulfill.
Example 2: A nonprofit organization proposes a project that includes $20,000 in voluntary committed cost sharing. After the grant is awarded, the organization must document this contribution for accounting purposes. (hypothetical example)