Question: We operate a child care center where fees cover the direct costs but we lose money when indirect costs are added. The child care center serves the community and our employees. Can we count our loss when indirect costs are added?
Recommendation: We recommend counting indirect and direct costs of the child care center for community members (not employees) under Category F3. Community Support if all of these conditions are met:
- A community needs assessment identifies a gap in child care services;
- Community members that apply for the service undergo some form of means testing or criteria that confirms that they are disadvantaged or have difficulty accessing child care;
- Serving vulnerable people from the community was part of the intent for opening the center.
In reporting indirect costs, we recommend using the community's market rate for indirect costs for child care if this is lower than the indirect cost rate of the health care organization. (April 2009)