Foundation Grant transition planning: Example of pro-rating a grant

As outlined in the transition planning options for Foundation Grant holders, the funding start dates for Project Grants do not align with the funding end dates for Foundation Grants, which leads to a potential overlap in funding. The following example outlines how the funding overlap/pro-rating component of the transition process could work for a returning Foundation Grant holder.

In this example, let's assume that the returning Foundation Grant holder, Dr. Q, has decided to apply for a Project Grant as soon as they become eligible—and they are successful. Dr. Q's Foundation Grant ends on June 30, 2022 and this new Project Grant starts on October 1, 2021. This creates nine months of overlap, so Dr. Q decides to defer this grant, which means that it will now start on July 1, 2022, without any pro-rating. Dr. Q then applies for their second Project grant—and they are successful again. This second Project Grant has a funding start date of April 1, 2022. This creates three months of funding overlap (April, May, and June 2022). Since Dr. Q is only allowed to defer one grant, the new Project Grant will maintain its funding start date of April 1 and will be pro-rated for the equivalent of that three month overlap. To calculate the overlap amount, CIHR will pro-rate the average yearly budget of the new Project Grant.

More specifically:

  • Dr. Q's second Project Grant was awarded for $800,000 over 4 years—or a yearly average of $200,000.
  • By pro-rating the average yearly budget of the new Project Grant, CIHR will determine the overlap amount ($200,000 / 12 months x 3 months = $50,000).
  • Instead of reducing the budget for the first year of the Project Grant by $50,000, CIHR will spread the reduction across the life of the grant ($50,000 over 4 years = a reduction of approximately $12,500 per year, on average).
  • The new average yearly budget for the Project Grant therefore becomes $187,500, for a total of $750,000. (The actual payment schedule may differ slightly.)

With these two grants secured, Dr. Q decides not to apply for the next (what would be their third) Project Grant competition. In the end, then, their new Project Grant begins on April 1, 2022; their Foundation Grant ends on June 30, 2022; and their deferred Project Grant begins on July 1, 2022.

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