I recently received this great news that I want to share with you.
After much heavy lifting by our National Council of Nonprofits and our
partner nonprofit state associations around the country, the federal Office of
Management and Budget (OMB) released for public inspection "Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards", which will
streamline federal grants rules and procedures.
To boil it down, the OMB is recognizing that it is
important to include an appropriate administrative amount in their contracts
with nonprofits. If you are, or will be, getting state or local funding that
comes from the federal government (a.k.a.pass through funding) you can
opt for the new automatic indirect cost rate of 10%. Other changes
include: expanded eligible direct costs, more favorable audit rules, and standardized/streamlined applications and reports.
As our National Council of Nonprofits points out (summarized):
The new guidance means that nonprofits
should be able to focus more on their missions and should be under less
pressure to raise additional funds to support the work of a contract. In turn,
charities with no government contracts or grants could see less competition for
scarce philanthropic dollars. This is a major win for the entire charitable
This will help all nonprofits, even if they don’t have government contracts,
because those with contracts will not have to raise funds from private sources
to cover the overhead that will now be included in their contracts with the
We hope you see the value and the power that is illustrated by this OMB
Announcement. Working together with our colleague associations across the
country, we have been able to make an impact on Federal contracting. They
acknowledge that all organizations must cover their administrative costs if
they are to continue to provide critical services. Together we are making
our communities stronger.
I will keep you posted as I learn more in processing the 759 pages.
Please feel free to reach out to me if you have any questions or
comments, and I will get back to you upon my return from the holidays on January 6th.