In the Department of Amplification:

After submitting my grant application to the USDA, they bounced back a couple of items related to letters of support. Letter writers who were offering in-kind matches did not provide enough detail in their letter to effectively document the monetary value of what were offering.

1. In the first case, a professor was offering in-kind consulting services that were valued at $100 per hour. The grantor pushed back saying…how is the $100 an hour calculated? There are a couple ways this could be wired up, but the most honest is probably to take the professors yearly salary, plus the fringe benefit rate which is applied to the salary, and then divide that by the number or working hours that represents. So, let’s say the professor is on a nine-month contract (i.e. she gets the summer off, but also isn’t paid for summer), and she earns $125,000. The “fringe rate” is calculated at 42%. This is a typical percentage. Do the math on your own salary, and you may find that you end up in similar situation. Fringe includes vacation, sick days, social security (both the employer and the employee’s portion), and federal and state taxes and medicare, and any other fringe benefits that normally go into the calculation. 42% of $125,000 is $52,500 meaning that the full cost of the employee, salary plus benefits is calculated at $177,500. ( I know, we should all be so lucky, right?).

Divide $177,500 by the number of hours (9 months at 35 hours per week = 1260 hours)….which gives us an hourly rate of $141.

From the funder’s viewpoint, the professor is actually contributing their time at a rate of $141 / hour. From the college’s viewpoint, the $100 was really just a figure pulled out of the air, they may or may not actually expect that the professor is going to use a portion of their 1260 working hours as an in-kind contribution to our organization. My guess is the above kind of calculation would be sufficient to document this contribution to a federal agency and it is certainly more precise than the $100 figure.

Another way to quote this is by percentage of FTE (full-time-equivalency). Perhaps the college allows the professor to contribute up to 5% of the FTE to non-college activities and that the professor is planning to contribute 4% to your organization. 4% of $177,500 is $7100 which could be used for the value.

2. In the second case, a member organization is giving our non-profit office space, use of a copier, wi-fi access, etc. They valued this at $1250 a month or $15,000 per year. The funder asked how they came up with that figure… and so additional details were supplied including the square footage of the office space, the percentage of the donated space versus the full square footage of their building, the cost of wi-fi, prorated, etc.