Indirect Cost Policy

The Semnani Family Foundation has always sought to work with grantees that make the best use of grants—particularly seeking out charities and programs that minimize administrative costs and other indirect costs. The foundation looks for efficient users of its assets that have the greatest impacts. This policy is a more direct statement on its long-term practices in an attempt to help clarify its intentions and what it looks for in giving a grant.

 

Indirect costs are a necessity for organizations to thrive. Administrative expenses such as rent, utilities, and staff are all indirect costs that exist regardless of whether a grant is given or not. A direct cost would be those expenses directly related to the program the grant is supporting—for example, materials to build a classroom in Kenya or a water well.

 

The Semnani Family Foundation has declined grants to various organizations because their rate of indirect costs was deemed to be too high. We understand that a new charity may have higher initial administrative and other costs to get started, however some well-established charities are administrative heavy and so we have opted to not participate in their programs.

 

Likewise, the foundation does not allow a percentage of a grant to go to Facilities and Administrative costs (F&As) (which are often automatically attached to donations made to educational and research programs). Our policy is always to have donations go to actual costs, not have money go to general funds nor generate financial surpluses.

 

If you have any questions about the Semnani Family Foundations policies, please contact us at info@semnanifamilyfoundation.org.