Indirect costs are the administrative costs that institutions incur to support research, but which are not always attributable to specific departments or research projects.
The Government of Canada introduced the federal Indirect Costs Program (ICP) in 2003. This permanent program provides Canadian universities and colleges with an annual grant to help pay for a portion of their hidden or “indirect” costs of research, which pose a financial challenge to these institutions.
For example, an allocation from the ICP grant may supplement the salary of an expert staff member who manages specialized equipment used by many researchers and students. It may also subsidize the UBC Library's subscriptions to e-journals that are used by the research community to prepare studies, articles and theses.
ICP funds may be used to cover new expenditures, to maintain the current level of services, or to support an institution's research environment and improve its management. The five expenditure areas of the federal Indirect Costs Program are:
- Research facilities;
- Research resources;
- Management and administration of an institution's research enterprise;
- Regulatory requirements and accreditation; and
- Intellectual property.
Overall, grants for indirect costs must add to, and not displace, any research support funds that postsecondary institutions have received from the provincial government, private sector or other federal sources.
Whether the grant pays for the maintenance of libraries, laboratories or research networking spaces, or for the technical support required for an institution's website or library computer system, the overall goal of the Indirect Costs Program is to help ensure Canada's research institutions remain top-notch. By subsidizing the financial burden of indirect costs, the program ultimately helps researchers and universities focus on delivering innovative research and scholarly excellence.
Indirect Costs or Overhead Costs?
The federal Indirect Costs Program is sometimes confused with Overhead Costs related to research budgets. Overhead costs are a percentage of a specific research project that is allocated to supporting research infrastructure at the host institution. Overhead costs are established by individual institutions and are not related to the federal Indirect Costs Program.
If you are a researcher or administrator preparing a grant application and are seeking information about UBC's Overhead Policy, please consult the Overhead Costs section of this website.
UBC’s Indirect Costs Allocation
The amount of UBC’s Indirect Costs grant is calculated using an algorithm based on the amount of funding awarded in the previous fiscal year by Federal granting agencies. According to this calculation, in 2011/12 UBC received an ICP grant of $26,907,173, which was allocated in the five categories as shown in the chart.
A portion of this allocation is retained to support central research administration units and core facilities, and the rest of the allocation is distributed to UBC faculties and affiliated research institutes where eligible costs are incurred.
Funding from the Indirect Costs Program has provided much-needed funding to support key research facilities, such as the WestGrid installation, Canada’s largest computer infrastructure. Additionally, ICP funds supported the salary of the Proteomics Core Facility manager in the Michael Smith Laboratories, who provides access to advanced protein sequencing technologies at a low fee-for-service to over 65 research groups on UBC’s Vancouver campus.
Through the ICP grant, UBC has been able to schedule and complete time-sensitive renovations to research facilities, such as the Vancouver General Hospital Research Pavilion, where a renovated research space supported is now shared by three groups in the Department of Surgery, creating opportunities for collaboration and equipment-sharing.
In the last decade, UBC’s research output has increased by nearly 60% and its ranking amongst world-leading universities has consistently improved from 40th in 2009, to 22nd in 2011. This correlates to UBC’s investment in and access to electronic resources, which are supported in large part by over $9 million per year in ICP funding. These funds support subscriptions that provide online access to more than:
- 875,670 e-books;
- 87,820 serial titles;
- 990,000 electronic resources and 1,000 digital databases; and
- 5.6 million digital collections.
Management & Administration
ICP resources have supplemented the salaries of highly competent administrative support staff who oversee operational matters ranging from financial and administrative tasks, research planning and promotion, human resources, and public relations. Their work minimizes the administrative demands on busy researchers who must apply their own expertise in the most efficient way possible; namely, generating research outputs.
A key group of UBC administrative staff supported by ICP funds is the Grants Facilitators, a distributed network of funding professionals who assist researchers in preparing grant proposals and identifying funding opportunities. Their work has significantly improved the success rate of UBC’s applications to external granting agencies. For example, in the Faculty of Education, the success rate of UBC researchers in securing SSHRC Insight Grants exceeded the average national success rate.
Regulatory Requirements & Accreditation
ICP funding makes a vital contribution toward UBC’s Research Ethics Boards (REB). Without these funds, it would be virtually impossible for the University to cover the combined cost of research ethics board committee expenses, staff salary, training and education.
This would severely hamper and delay research because researchers are prohibited from conducting studies involving human or animal subjects, or biohazardous materials, without the appropriate ethical review process and a compliance certificate.
ICP funding supported various staff positions in the University-Industry Liaison Office that enabled UBC to maintain base technology transfer operations while developing new channels to support knowledge mobilization, industry engagement, and entrepreneurship. Newer activities include the continued development of entrepreneurship@ubc, genomics.entrepreneurship@ubc, the UILO Start-up Services Voucher, and the Global Access Initiative.
The investment of indirect cost funds in UBC Okanagan’s Industry Outreach Scanning Electron Microscope/Microelectronic Machine project enabled the completion of an innovative industry collaborative model. These investments are vital for researchers, as they are already assisting in bringing in industry and inter-institutional interest in new research collaborations.
Summary of Impacts
Funding from the Indirect Costs Program has been critical in allowing UBC to maintain both the foundational and transformational supports to the research community, and has also provided flexibility to undertake time sensitive renovations and maintenance of research facilities and equipment. The ICP grant supported staff salaries and benefits, allowing researchers to focus on research issues, leading to a number of high-impact papers and patents that are currently being commercialized.
Without these funds, the core and vitality of research interests would suffer. The strength of the institutional infrastructure support apparatus would be undermined and as a result, the focus on accelerating the productivity of research activities would be marginalized.