Including cost sharing in a proposal may benefit the Principal Investigator and Tulane by increasing the likelihood that a project will be partially funded by a sponsor. Cost sharing also indicates to the sponsoring agency the University's commitment to the proposed project.

University cost sharing implies the redistribution of department or school resources to support a specific sponsored agreement. Because these resources can be scarce in some cases, it is important not to over-commit funds when the sponsor does not require them and when the project can be completed without them.

It should be noted that cost sharing commitments can have an effect on the University's facilities and administrative rate (formerly indirect cost rate). Cost sharing of direct expenses is considered a part of the research base when calculating the F&A rate, and are excluded from the indirect pool of expenses. This distribution lowers the amount of the indirect expenses that can be allocated to sponsored projects and, therefore, reduces the University's recovery of F&A costs. It is a twofold hit by redistributing scarce institutional funds to support research, reducing the F&A rate by inclusion in the base and no F&A costs are paid by the sponsor on those expenses.