10 Things to Know about the OMB’s Updated Uniform Guidance Governing Federal Grantmaking

The federal Office of Management and Budget (OMB) has issued major changes to its Uniform Guidance, which is the set of rules for most grantmaking to charitable nonprofits and state, local, and Tribal governments. These changes will go into effect on October 1, 2024, and will correct longstanding problems in the federal grantmaking process. Therefore, the changes should benefit nonprofit and charitable organizations as they seek, perform, and comply with reporting requirements under federal grants.

Here are ten things that charitable organizations should know about the OMB’s updated Uniform Guidance:

1. The guaranteed de minimis rate for indirect costs increases from 10% to 15% of modified total direct costs. This change will allow for a more reasonable and realistic recovery of indirect costs, especially for new or inexperienced organizations.

2. Organizations cannot be compelled to use a de minimis rate of less than 15% of modified total direct costs, and nonprofits can notify OMB directly of any disputes with federal agencies over indirect costs.

3. Exclusive use of the English language in notices, applications, and reporting is no longer required.

4. Federal agencies must urge grant recipients to engage community members who will benefit from or be impacted by the federal grant funds.

5. Notices of Funding Opportunities must be simplified to benefit applicants with less experience applying for federal grants. This requirement is designed to attract more applications from underserved communities.

6. Notices of Funding Opportunities must be clarified to help prospective applicants determine whether to apply. Each grant announcement will contain basic information about the grant at the top, including an Executive Summary in plain language with specific and clear program requirements.

7. Federal agencies must consider diversity when developing policies and procedures for merit review panels. Federal agencies are also encouraged to develop programs by consulting the communities to determine whether the programs will benefit or impact.

8. Advance, up-front payments are recognized as the default payment method for grant recipients and sub-recipients where relevant criteria are met. Government entities are urged to make up-front payments rather than payments reimbursed months after services are rendered.

9. The Single Audit Threshold increased from $750,000 to $1 million.

10. Federal agencies must eliminate unnecessary reports to monitor the grant effectively.

Call for Help with the Uniform Guidance Updates

If you need legal advice or assistance, we are here to help. Contact an experienced nonprofit lawyer today. Call the California Center for Nonprofit Law offices at (949) 892-1221, email us at info@npolawyers.com, or contact us online for more information today. We offer a wealth of experience handling the unique legal issues that charitable organizations routinely face.