Long-Awaited Improvements to Federal Grantmaking Now in Effect

Maine Association of Nonprofits, and many other capacity-building organizations within the nonprofit community, have been part of a sustained, multi-year advocacy effort led by the National Council of Nonprofits (NCN) to address federal grantmaking rules that harm to nonprofits and limit their effectiveness in carrying out their missions. Starting today, October 1st, some very big wins take effect!

Charitable nonprofits will now face lower barriers to accessing government grants and be able to secure higher reimbursement rates for their actual costs. Huge for nonprofit bottom lines, the de-minimis indirect cost rate will go up from 10% to 15%, and pass-through entities must accept nonprofits' negotiated indirect cost rates. rate that governments using federal funds must pay to every grantee to 15% (up from 10%), removes multiple barriers to accessing federal grant funding, mandates streamlining and simplifying of Notices of Funding Opportunities (requests for proposals), and raises the Single Audit threshold to $1 million (from $750,000). To learn more, check out the National Council of Nonprofits' summary of beneficial changes in the rule.

The rules advance equity by encouraging community engagement in federal programs, consideration of diversity, no longer requiring English language in notices, applications and reporting, and simplifying language in notices of funding opportunities. 

Another huge win is allowing for up-front payments and reducing the use of reimbursable grants—you can find more information from NCN here. In Maine, we are advocating for changes to improve state grantmaking, some of which is based on the new federal improvements. Let us know if you want to stay updated on this topic!

Thank you to North Carolina Center for Nonprofits, Maryland Nonprofits, and National Council of Nonprofits for language used in this post.