The new OMB Uniform Guidance is the biggest change in government grant guidelines in more than 30 years – and could spell relief for private grantmakers who won’t be called upon as much to subsidize constant (and growing) government shortfalls – if the new guidelines are implemented as intended.
With the nonprofit sector earning 32.7% of its revenues from government grants and contracts, and the new requirement that governments at any level using any federal funds must start paying nonprofits their indirect costs (and national data showing the governments currently reimburse 24% of nonprofits zero, and 49% of nonprofits 7% or less, and 75% of nonprofits 10% or less), this can translate to real money. A major hurdle is that states and localities must come into compliance, yet have a long history of holding onto federal dollars rather than passing them along; thus, we anticipate implementation challenges.
The National Council of Nonprofits recently reported about the White House Office of Management and Budget (OMB) work on government-nonprofit contracting reform. OMB has addressed multiple areas of confusion and inconsistency arising from the nonprofit reforms published last December. Their answers to Frequently Asked Questions have been incorporated into the OMB Uniform Guidance. The FAQs provide answers that are binding on federal agencies and pass-through entities – typically states and local governments receiving federal funding. The answers by OMB should help nonprofits protect their rights under Uniform Guidance, especially in regard to pass-through entities and indirect costs. Access the link for the National Council of Nonprofits' article, The Promise of Grantmaking Reforms Moves Closer to Reality, below.