AACN Indirect Cost Policy

The American Association of Colleges of Nursing (AACN) is the national voice for baccalaureate and graduate nursing education. AACN represents over 850 member schools at public and private universities nationwide. The dean serves as the representative to AACN, though the association serves the entire academic enterprise, including faculty, administrative staff, and students.

AACN works with its members and constituents to advance developments in academic nursing and supports strong and effective partnerships with organizations to do the same. We believe that good stewardship means maximizing our resources, including grant funding and staff time, while building strong partnerships based on trust. We aim to structure grants in a way that make sense from a financial perspective while also funding partners for the cost of delivering results efficiently.

The maximum indirect cost rate for grant funding from AACN is 10%. We welcome existing and prospective partners to refer to this document and our FAQs for clarification of this policy. If policy questions remain about a budget for a particular AACN program, please contact the AACN staff liaison for that program.


AACN defines expenses that are directly attributable to project outcomes and outputs as direct costs and expenses associated with general running of the business as indirect costs. Greater specificity on each category is described below. See FAQs for examples of each category.

Direct Costs

Direct costs are the expenses required to execute a grant that are directly attributable and can be reasonably allocated to the project. Costs that would not be incurred if the grant did not exist are often indicative of direct costs.

Indirect Costs

Indirect costs are general overhead and administration expenses that support the entire operations of a grantee and that may be shared across projects. Expenses that would be incurred regardless of whether the grant is funded are often indicative of indirect costs. While these costs may not be directly attributable to a project, they are real and necessary to operate as an organization.  Your organization may have an established indirect cost rate. The maximum amount allowed for AACN is 10%. 

Updated: May 15, 2022

Frequently Asked Questions

  • Question: What is the maximum indirect cost rate for AACN grantees and what are the limitations?
    Answer: The maximum indirect cost rate for grant funding from AACN is 10%. Indirect cost rates for grants are subject to the limitations as listed below.
  • Question: Can you provide examples of common direct and indirect costs?
    Answer: The following is a list of common direct and indirect costs. We recognize that there are categories of cost that can be considered either direct or indirect depending on grantee accounting practices and the nature of the cost relative to the project purpose.

    It is the responsibility of grantees to submit proposal materials that allow us to understand the link between project outcomes and direct costs. We also expect that grant proposals speak to what is covered by the requested indirect cost rate.


  • Salaries and wages of employees working directly on the project.
  • Fringe benefits of employees
    These costs should be substantiated by time keeping and/or an allocation methodology, and can include directly attributable and allocable project management and support, and project legal or accounting functions (substantiated by timekeeping)
Personnel cost of general management and administrative support personnel, such as school administration or central operational functions (Accounting, HR, IT, Legal, etc.)
  • Travel expenses for trips directly needed to deliver the project
  • Travel not directly related to the project
  • Contracted staff working directly on the project
  • Contracted staff for general administrative functions, such as accounting or audits
  • Costs for equipment directly used by the project (can include purchase/replacement, operation, maintenance; to be pro‐rated in case of partial use)
  • Costs for equipment or depreciation on equipment* incurred by central operational functions
Other Direct Costs
  • Allocable facilities, utilities and communications expenses that are required to execute the project, such as field clinics, laboratories, project office costs
  • Project‐specific supplies
  • Costs for facilities, utilities, and communications associated with central operational functions.
  • Grants or contracts with other organizations that directly contribute to the project outcomes
  • Outsourced general operating activities, such as accounting, audits, IT support

*If depreciation is included in the indirect cost pool, the acquisition cost used for computing depreciation must exclude any portion of the cost donated by the foundation or another funder.

  • Question: Why doesn’t AACN match my institution’s Negotiated Indirect Cost Rate Agreement (NICRA) rate with the U.S. government or other funding organizations?
    Answer:  AACN’s position is that whenever possible, specifically allocable costs should be identified as direct costs, including those for dedicated ongoing project management and support.  See above table for examples of direct and indirect costs. Please note that our categorization differs from the U.S. government’s instructions to treat project management and support expenses as indirect costs. AACN funds these costs as direct costs onto which is added up to 10% for indirect costs, which are not directly attributable to the project.
  • Question: Why are facilities typically not classified as direct costs?
    Answer: Rent and other centralized facilities costs are part of doing business for an organization and therefore are not specifically attributable to a project or activity. These facility expenses of the organization should be categorized as indirect costs. Facility expenses more than this allocation are considered indirect and are subject to the indirect rate limitations of the primary grantee noted in the Indirect Cost Policy.
  • Question: How do I determine if a cost is direct or indirect if it is not clear?
    Answer: The key differentiating factor should be whether the cost is required and allocable to the project to meet its objectives. Here are two examples to help illustrate the distinction:
    • An audit function could be considered indirect if it is organizational internal audit performing routine activities. However, if extra due diligence is required for new sub‐ awards on a particular project, the audit function to carry that out may be considered direct.
    • An organization can have accountants that manage the central organizational costs and some that are assigned exclusively or on a percentage basis to specific projects. In this case, the former would be considered indirect and the latter direct.