Nonprofits Win Key Victory in Overhead Battles With Government
Submitted by Steve on January 16, 2015
From Tim Delaney at The Chronicle of Philanthropy:
Rather than focusing on what Congress will (or won’t) do in the new year, foundations and other nonprofits would do well to take a close look at a little-noticed overhaul of federal grant-making rules — in the works for three years and that took effect the day after Christmas — that could provide meaningful traction for ending the so-called nonprofit starvation cycle.
Last month, the federal Office of Management and Budget formally recognized in new rules called the Uniform Guidance that when governments hire nonprofits to provide services, those nonprofits legitimately need to incur and be paid for their "indirect costs"—which is government-speak for overhead and administrative expenses.
OMB, which is responsible for overseeing how federal funds are spent, is ordering governments at all levels—local, state, and federal—to reimburse nonprofits for more of their direct costs plus their indirect costs when their work is funded in whole or in part with federal money.