If your organization touches federal funding (either directly from an agency or passed through a state or municipal office), check the terms of the specific awards because there is a quiet update you need to be paying attention to.
The federal government’s revisions to the Uniform Guidance (2 CFR 200) brought some of the most significant operational updates we’ve seen in years.
Yet, I still see nonprofits drafting federal budgets using rules from 2018.
Here are four major shifts that directly impact your budget strategy right now:
- The De Minimis Indirect Rate jumped to 15% of modified total direct costs. For years, organizations without a negotiated indirect cost rate (NICRA) were stuck with a flat 10% de minimis rate to cover administrative overhead. Organizations eligible to use the de minimis rate can elect the 15% rate. If your team is still writing federal proposals electing the old 10% cap because “that’s what we’ve always done,” you are literally volunteering to underfund your own operations.
- The Single Audit Threshold Moved to $1,000,000. Previously, expending $750,000 or more in federal awards in a fiscal year triggered a costly, rigorous Single Audit. The threshold is now $1 million for fiscal years beginning after October 1, 2024. For mid-sized organizations hovering around the $800k mark, this has the potential to relieve massive administrative strain and may free up thousands of dollars in audit-related fees.
- Equipment Thresholds Rose to $10,000. The per-unit threshold for items classified as equipment (instead of general supplies) doubled from $5,000 to $10,000. That means less burdensome asset tracking and simpler line-item justification for mid-tier technology and program hardware.
- The treatment of subawards has change. The amount of each subaward included in the MTDC base increased from the first $25,000 to the first $50,000. This is directly relevant to calculating indirect costs.
Related: Inside the federal funding shakeup: How 300+ nonprofits are adapting
Why This Matters
Federal funding is already notorious for administrative friction. When the rules actually change in your favor, you cannot afford to ignore them.
Our value as grant professionals isn’t just knowing how to write a compelling narrative.
It’s understanding the compliance architecture behind the money.
So pull up your federal budget templates.
Check the indirect rate.
Check your Single Audit assumptions.
Check how you’re calculating MTDC.
And, this part matters: check the terms and conditions of the specific award. Older awards may still be governed by earlier versions of the Uniform Guidance depending on when and how the revised rules were incorporated.
The regulations changed.
Make sure your templates did too.
Until next time,
Write Epic Grants