What is the primary distinction between direct costs and indirect costs in grant proposals?

The primary distinction between direct costs and indirect costs in grant proposals lies in the nature of the expenses related to the project. Direct costs refer to expenses that can be directly attributed to the specific activities or outputs of the project. This includes items such as salaries for project staff, materials, travel, and other resources that are essential for executing the project.

The choice highlighting direct costs as expenses related to project completion captures this definition accurately, emphasizing that these costs are fundamental to achieving the project's objectives. In contrast, indirect costs, often referred to as "overhead," are expenses that are not directly tied to specific project activities but are necessary for the overall functioning of the organization, such as utilities, administrative support, and facility maintenance.

Understanding this distinction is crucial for budget preparation in grant proposals, as it helps in accurately allocating resources and justifying the funding request to grant reviewers.