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Win for Nonprofits in Federal OMB Grants reform

Posted By John Baker, Thursday, January 2, 2014

Hi All,

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 nonprofit community.

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 government.

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.


Tags:  contracts  federal  grant reform  grants  National Council of Nonprofits  Office of Management and Budget  OMB 

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