Survey - THANK YOU
Thank you to everyone that participated in the recent survey around
government grants and contracts. Results will be out soon and
will update our recommendations
for the upcoming hearing of the
Red Tape Review Commission
, and will also be used in our broader
efforts to improve government grant and contracting, including
implementation of the
OMB Uniform Guidance
in New Jersey. Thank you!
The OMB Uniform Guidance for Government Grants/Contracts: What Non-Profits Should Know
In late December 2014, the U.S. Office of Management and Budget (OMB) published final guidance governing government grants and contracts that means good news for non-profits that receive federal grant funds, either directly or passed through state and local entities.
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, more commonly called the “Uniform Guidance,” consolidates and updates eight previous OMB circulars into a single set of regulations which make a variety of important changes in federal government grant policy. For example:
- State and local governments, using federal grant funds, as well as non-profits that use federal funds to grant subawards to other non-profits, are now required to reimburse non-profit contractors and grantees for reasonable indirect costs (sometimes inaccurately called administrative or overhead expenses). The minimum indirect cost threshold is 10% of a non-profit’s modified total direct costs, and can be negotiated higher based on actual costs.
- In some cases, administrative expenses associated with a particular project can be reported as direct, rather than indirect, costs.
- The guidance will allow non-profits to focus more on delivering services in their communities, and spend less money on wasteful paperwork by raising the Single Audit threshold from $500,000 to $750,000, as well as eliminating duplicative and unnecessary application and reporting requirements, while clarifying cost allocation rules.
This Guidance is the result of years of hard work on the part of OMB, non-profit advocates (led nationally by the National Council of Nonprofits
), the accounting community and other stakeholders. OMB is to be commended for actively seeking, and taking into account, the feedback and recommendations to improve the grant policies and procedures. YOUR input
, including your responses to surveys by the Urban Institute, the National Council of Nonprofits, and the Center for Non-Profits, has helped make the difference. The new Guidance, which has been called “game-changing,” provides enormous potential for significant time and resource savings for non-profits and the government alike.
Many of the provisions within the Uniform Guidance take effect beginning December 26, 2014, for new grants and contracts initiated after that date. Specific information is provided in the official regulations.
Turning the promise of reform into reality will require action from all of us. There are many things you can do to keep the momentum going:
- Learn about the rules – for starters, visit the National Council of Nonprofits’ OMB Uniform Guidance landing page, which highlights some of the key points and links to pertinent sections in the regulations. Center MEMBERS can get FREE access to the complete recording from our May 5, 2015, webinar, “The OMB Uniform Guidance: How Government Grant Reforms Can Benefit Your Organization,” led by the National Council of Nonprofits’ David Thompson and Beth Bowsky, two of the country’s leading advocates on this issue (contact the Center for the webinar link).
- Know Your Rights … and How to Protect Them – During this crucial implementation stage, it will not be unusual for state and local officials to be unfamiliar with the new rules, and they may provide information that is inaccurate. Equipped with the facts, we all have the power to rectify these errors. This analysis from the National Council of Nonprofits summarizes non-profit rights, highlights potential compliance challenges, and identifies actions non-profits can take to ensure the Uniform Guidance is properly interpreted.
- Take Action: Share What You See – In order to advocate for non-profits, provide helpful technical assistance, and ensure that the OMB Uniform Guidance is being implemented as intended, we need to hear from you! The Center and the Council of Nonprofits need to hear about your experiences, and what you’re being told by government representatives who are responsible for implementing the Guidance. If we stay silent, change will not happen. Please share your experiences under the Uniform Guidance – whether positive or negative – and help build the evidence for best practices and additional reforms, by filling out the National Council of Nonprofits’ Uniform Guidance Implementation Report Form. Also stay in touch with the Center for Non-Profits, which can help connect you to information and guidance, and may be able to advocate on your behalf.
- Encourage state, county and local governments, AND private funders, to embrace the principles within the OMB Uniform Guidance in their own grants and contracts – The OMB Uniform Guidance is a promising model that can be replicated for funds that do not originate with the federal government, and we can encourage other funders to follow this example. See, for example, this blog from Nina Stack, President of the Council of New Jersey Grantmakers.
- Be sure your own budgets reflect your organization's full costs, being sure not to overlook or underestimate crucial items such as indirect costs and infrastructure. For more information about why this is important, see #OwnYourOwnCosts from the National Council of Nonprofits and The Nonprofit Starvation Cycle, from the Stanford Social Innovation Review.
- BECOME A CENTER MEMBER! The Center’s advocacy, educational programs, and services for non-profits are made possible by our members. You can support and participate in this work by becoming a member of the Center for Non-Profits, New Jersey’s state association of non-profits. Membership is also your ticket to cost savings and value-added benefits to help your organization stretch scarce resources. Dues start at just $99 / year and are based on your budget. Even better, all members of the Center for Non-Profits are automatically members of the National Council of Nonprofits. Learn about membership at www.njnonprofits.org/Membership.html , or contact the Center to find out more.
In the coming months, we will be providing more information, training and other convenings about this and many other issues, so watch our website and your email for more information.
Information and Links
National Council of Nonprofits:
U.S. Office of Management and Budget
Center for Non-Profits
Watch this page or your e-mail for updates, or feel free to contact the Center with your comments or suggestions.
The Center’s advocacy, communications and technical assistance services would not be possible without the direct support of Center members.
If your organization is a dues-paying member, we thank you for your support and involvement which help to sustain this work.
If your organization is not currently a member, we encourage you to explore the many benefits of membership at www.njnonprofits.org/Membership.html. Membership is a sound investment in your organization and in New Jersey's non-profit community for the people of our state.
Simply put, the more members we have, the stronger we can be for you. Dues start at just $99/year; join today!