services provided by affiliated organizations

7.8 Services Provided by Affiliated Organizations

A number of universities and other organizations have established closely affiliated, but separately incorporated, organizations to facilitate the administration of research and other programs supported by Federal funds. Such legally independent entities are often referred to as "foundations," although this term does not necessarily appear in the name of the organization. Sometimes, the parent organization provides considerable support services, in the form of administration, facilities, equipment, accounting, and other services, to its foundation, and the latter, acting in its own right as an NIH recipient, includes the cost of these services in its F&A proposal.

Costs incurred by an affiliated, but separate, legal entity in support of a recipient foundation are allowable for reimbursement under NIH grants only if at least one of the following conditions is met:

• The affiliated organization is charged for, and is legally obligated to pay for, the services provided by the parent organization.
• The affiliated organizations are subject to State or local law that prescribes how Federal reimbursement for the costs of the parent organization's services will be expended and requires that a State or local official acting in their official capacity approves such expenditures.
• There is a valid written agreement between the affiliated organizations whereby the parent organization agrees that the recipient foundation may retain Federal reimbursement of parent organization costs. The parent organization may either direct how the funds will be used or permit the recipient foundation that discretion.

If none of the above conditions are met, the costs of the services provided by the parent organization to the recipient foundation are not allowable for reimbursement under an NIH grant. However, the services may be acceptable for cost-sharing (matching) purposes.

Foundations that represent already existing recipient organizations should contact DGP, OPERA before attempting to become a separately recognized applicant organization.