Indirect Cost Coverage
Most funders provide inadequate coverage of their grantees’ administration costs, contributing to a starvation cycle with significant negative organizational impacts. Inadequate cost coverage and limited access to unrestricted income is making it extremely challenging for most civil society organizations and social movements to achieve stable financial health. To stop trapping grantees in the starvation cycle and start building resilience, funders will need to provide:
a) full cost coverage;
b) means by which grantees can contribute to unrestricted reserves; and
c) support to strengthen grantees’ cost recovery capabilities.
This practice is best for: Funders who give project-restricted grants with a percentage for indirect costs who are looking to push this practice further.
