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Los Angeles County to Explore Negotiating Indirect Cost Rates with Nonprofits
Important New Survey for Nonprofits Contracting with County

The Weingart Foundation is committed to advancing equity—to expanding opportunity by correcting the imbalances we see across racial, ethnic and socio-economic lines in our education, health, human service, economic, and criminal justice systems. For us, equity also means strengthening the capacity and infrastructure of nonprofits working in communities hit hardest by persistent poverty. This is why it’s so important to us that private and public funders support “full cost” funding for nonprofits.

Toward this end, we are excited to share that Los Angeles County is seriously exploring the idea of creating an optional process for each nonprofit to negotiate a single indirect cost rate that would then apply across all of their LA County grants and contracts.

In November 2015, the County took a big step forward toward providing full cost funding when the Board of Supervisors unanimously passed a motion co-sponsored by Supervisor Hilda Solis and Supervisor Sheila Kuehl recognizing the “deficiency and the unfair burden” placed on nonprofits “when the government funding they receive fails to cover the full cost of their services.” The motion supported the implementation of the Office of Management and Budget Uniform Guidance—new federal rules regarding nonprofit indirect cost payments—by directing County staff to return with recommendations on how the County should implement these new mandates.

Since then, the Weingart Foundation, the California Association of Nonprofits (CalNonprofits), and nonprofit leaders have been working closely with the County’s Chief Executive Office to discuss how the County can best implement the Uniform Guidance. The County is seriously exploring the idea of creating an optional process for each nonprofit to negotiate a single indirect cost rate that would then apply across all of their LA County grants and contracts. For those nonprofits that do not currently have a federally negotiated indirect cost rate, this process would provide a way for organizations to have their full costs more fairly and consistently supported.

As part of this exploratory process, LA County is currently conducting a survey of nonprofit grantees and contractors to gauge their interest in such an option. We highly encourage those nonprofits that have received the County’s survey to respond—your voices are critically important to this process. For more information and to get involved, please contact Nancy Berlin, Policy Director at CalNonprofits, nancyb@calnonprofits.org.