Indirect Costs

What About Indirect Costs?

When organizations request funding, they often include “indirect costs” (also called overhead) — expenses that support the program but are not directly tied to specific services (like rent, utilities, general administration). Many granting entities negotiate a fixed rate or percentage of the total award to cover these costs.

At Hands for Life Lake Merritt, we recognize that indirect costs are a real part of running community health infrastructure. However, to maximize the number of direct-service awards we can make in Oakland’s underserved neighborhoods, we have adopted a policy in which indirect costs are generally not covered under our grant awards unless otherwise specified.

While we understand this may add a burden for some applicants, our approach enables us to direct a greater share of every grant dollar to front-line wellness programs, mobile unit operations, and community outreach.

Why We Use This Policy

Maximizing Impact: By limiting coverage of indirect costs, more of our funding goes directly to programs delivering services in the field.
Supporting Equity: Our mission is to serve neighborhoods with the greatest need. Direct funding mechanisms help ensure more projects get funded.
Transparency: Clear expectations around funding enable applicants to plan ahead and vet how other overhead expenses will be covered.
Sustainability: We encourage applicants to incorporate other strategies for covering indirect costs—such as institutional support, local partnerships, or in-kind contributions—so that the program’s infrastructure remains robust.

What This Means for Your Application

Do include program-specific costs such as mobile unit operations, supplies, outreach events, community training, and direct service delivery.
Do not include general institutional overhead or broad administrative expenses unless the call for proposals explicitly allows them.
Do plan to identify how indirect or overhead costs will be supported—either via your organization’s budget, separate funding sources, or partner contributions.
Do contact us if you’re unsure whether a particular cost qualifies as “direct” or “indirect” under our policy.

Questions & Contact

If you have any questions about how this policy applies to your project or need help understanding what counts as indirect versus direct costs, please reach out. We want to ensure clarity and fairness in our process.