Stipends on Sponsored Awards


Harvard has developed the following guidance to ensure compliance with charging stipends to sponsored awards. Stipends are a form of support paid to an individual that is meant as a subsistence allowance to help defray living expenses most often during a research training experience. Stipend payments are not compensation for services rendered and, therefore, are not allowable on federal awards except those specifically awarded as training grants or include such payments in the scope, terms and conditions and budget.

If a trainee is providing benefit to a project under the direction of a principal investigator, they should be paid as an employee (if a graduate student, pay as a Research Assistant or if a postdoctoral fellow, pay as an Employee Postdoc).

However, stipends are allowable on sponsored funds intended to support training or research training and will state that intention clearly in the program announcement. The scope of work in the proposal and award documents should also state explicitly that training or research training of specific individuals is a purpose of the award. In such cases, stipend expenses are expected and allowable. Typical training awards include NIH "T" and "F" awards, NASA's various fellowship programs, and NSF Research Experiences for Undergraduate (REU) awards, Postdoctoral Fellowships, and NSF Graduate Research Fellowships. Other award programs may support stipends; please read the program announcement carefully and completely before adding these costs to a proposal. At award stage, it is important to review the notice of award to verify that stipends are allowed and awarded.

At Harvard, the following object codes must be used to record payments to individuals whose academic appointments at the University define them as stipendees:

  • 6440 Graduate Student Stipendee,
  • 6450 Stipendee, elig extended benefits,
  • 6452 Stipendee, inelig extended benefits; and,
  • 6455 Not Harvard Students, Other grants + Awards.

Federal Guidance 

OMB Uniform Guidance, Cost Principles (Subpart E)

No explicit guidance exists in the Uniform Guidance for the allowability of stipends, but the Cost Principles section does address student support. The only allowance for payments to individuals that do not represent compensation for services rendered appears in §200.466, Scholarships and student aid costs, which says such payments are allowable “…only when the purpose of the Federal award is to provide training to selected participants and the charge is approved by the Federal awarding agency.”

Two sections of the Uniform Guidance Cost Principles (Subpart E) suggest that stipends should not be charged to research awards. First, §200.430, Compensation - personal services, requires that amounts paid to individuals for their services on federal programs be documented, implying that payments to individuals which are not for services rendered should not be funded by research awards. Harvard’s effort reporting system does not include stipends since these amounts do not represent compensation for work effort. Additionally, the Uniform Guidance Cost Principles for direct and indirect costs requires that the University include all modified total direct costs allocable to benefiting activities across its major functions in determining indirect costs. Funds used to support effort directly benefiting organized research that are incorrectly coded as stipends would be excluded from the research base and would violate of the federal cost principles.

National Institutes of Health

The National Institutes of Health Grants Policy Statement states explicitly that stipends are not allowable on research grants. This definitive statement appears twice in Section 7 Cost Considerations, 7.9 Allowability of Cost/Activities,7.9.1 Selected Items of Cost, under Fringe Benefits/IHE, it states: "Payments made for educational assistance (e.g., scholarships, fellowships, and financial aid costs) may not be paid from NIH research grant funds even when they would appear to benefit the research project." Further, under the entry for Stipends, it states: "Stipends are not allowable under research grants even when they appear to benefit the research project."

National Science Foundation

The National Science Foundation Grant Proposal Guide allows for stipends only in support of participant costs at conferences, symposia, workshops, or other specific training activities. In these cases, the scope of work should include a description of the training activity and NSF would have acknowledged in the Notice of Award (NOA) that participant costs would be funded by stipends. NSF guidelines do not provide an allowance for payments to non-employees or non-consultants for activities that benefit a research award.

Given this clear guidance from NIH and NSF, Harvard's two dominant federal sponsors, University policy follows this guidance for all federal awards, regardless of agency.

University Guidance

Stipends are only allowed if there are specific training activities included in the scope of work and stipends are included in the budget and justification. Costs must be in alignment with the program announcement and must be proposed and awarded by the federal sponsor. 

Outgoing federal proposals that include stipends in the budget should include a description of a training purpose in the award. Graduate student support that is not identified explicitly as "stipend" will be considered "compensation" and will incur indirect costs. Submitting offices and tub-level research administrators will review proposals to ensure payments are properly budgeted as compensation vs. stipends.

During financial reviews, tub or local financial managers of sponsored funds are responsible for reviewing awards for allowable costs and other compliance concerns. Stipend expenses on a federal award should trigger verification that stipends are allowable on that award. Similarly, OSP financial officers will confirm the allowability of stipend charges on federal awards during their periodic reviews of financial activity.

For cases in which it is not clear whether stipends are allowable, tub-level research administrators and OSP will review the program announcement, the award document, the budget, and the budget justification to determine allowability. If it is determined that stipends are not allowable on the grant, the department financial managers must remove expenses on stipend object codes (6440, 6450, 6452, 6455) from the grant. See below FAQ #4.

Stipends are allowable on non-federal sponsored research awards, but they should be anticipated in proposal budgets and approved by the sponsor. Many sponsors are willing to fund stipends. It is important, however, to distinguish individuals who are providing services to the University from individuals who are being paid without any expectation of work effort. University human resources policies prevail over non-federal sponsor expectations. An individual who is being paid for the services they provide to the University should be considered either an employee or an independent contractor. Please see the Independent Contractor Policy.

Stipend FAQs 

1. Which types of NIH awards allow stipends?

We interpret the NIH guidance to mean that "T" and "F" grants allow stipends, while "R" and "P" awards do not. Other programs should be evaluated on a case-by-case basis.

2. Can a visitor who is an employee or faculty member from another university or a non- Harvard graduate student be paid a stipend?

The employment status of an individual at their home institution should not determine their appointment status here at Harvard. If they are providing services to the University, they should be either appointed as an employee or paid as an independent contractor. If they are visiting the University for their own research or educational purposes and will not be working on federal research, they can receive an academic appointment and be paid a stipend.

3. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to a compensation object code?

No, payments in these object codes reflect the employment or academic appointment category assigned by the appointing official. The payments carry taxation and employment liabilities for the individual and for the University that are specific to the terms of the respective appointment categories. If the costs are recent and fall within the current calendar year, you may be able to work with tub officials in payroll or human resources to modify the appointment retroactively.

4. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to another fund using the same object code.

Yes, stipends can be moved from federal research awards to funds where they are allowable as long as the transaction follows the cost transfer rules and the costs meet the conditions of allocability and allowability for the fund to which the costs are moved. 

5. What do you do when stipend expenses appear on an invoice from a subcontractor on a federal research award?

Universities use the term "stipend" to cover a variety of affiliations for individuals and the use of the term itself should not specifically disallow the cost. When an invoice for stipends is submitted by a subcontractor, the costs should be verified and documented as compensation before they are charged to a Harvard federal research award. If possible, the subcontractor should resubmit the invoice using a more accurate description of the costs, such as compensation or salaries and wages for students or postdocs. Subcontracts on federal research awards should indicate clearly that the University will reimburse the subcontractor for expenses incurred to support the scope of work of the subcontract. 

6. Will appointing researchers as employees, rather than stipendees, increase my indirect costs?

Yes, employees are paid from compensation object codes in the 6001-6399 range. Compensation expenses take overhead. Stipends are paid from object codes in the 6400-6499 range. Stipends are excluded from overhead and are removed from total direct costs to determine modified total direct costs (MTDC).