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Non-Profit Success

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Achieving Success for Non-Profit Clients - the “Extra Mile”

Tait Weller has a number of non-profit clients who receive funding from the U.S. government through grants from departments such as US Agency for International Development (USAID) and the Department of State. With such grants comes a reimbursement for indirect costs – those expenses that are not directly related to the grant purpose or activity, but are necessary to keep the organization running, such as salaries for support staff, the percentage of rent and utilities attributable to them, etc. As experienced grant managers know, not allocating these costs correctly results in a lower indirect cost rate, lower reimbursement and potential damage to the organization’s ability to deliver on the very purpose of the grant.

“Success” example 1: One of the partners reviewed the indirect cost rate for a new client and discovered it was unnecessarily low. Although there are strict guidelines for calculating the indirect cost rate – for example, they must be allowable, reasonable and allocable – the rate is ultimately negotiable provided sufficient supporting documentation can be provided. In this case, the partner discovered a different way to design the allocation plan within the cost recovery standards. When submitted, USAID approved the new rate and the client was reimbursed at a significantly higher percentage.

“Success” example 2: As often is the case, a non-profit client may receive grants from multiple federal sources or a mix of federal and foundation sources. One such client received a large grant from a private foundation in addition to a number of federal awards. While a fortunate occasion, the unfortunate consequence was that direct program costs increased and the indirect rate lowered correspondingly. One of the partners was able to develop a new methodology for constructing the rate and, because of his relationship and experience with federal grant makers, was able to negotiate on the client’s behalf to have the new methodology accepted – and the original indirect cost reimbursement maintained.

“Success” example 3: a client had an approved plan for their indirect cost rate, which allowed them to recover indirect costs on sub-grants to its affiliates. Normally, under cost principles, an organization may only include the first $25,000 of a sub-grant in its “pool” of costs and must exclude the balance without recovering indirect costs on it. However, Tait Weller had previously developed and presented a methodology to the Department of State (DOS) that showed that the relationship between the organization and its affiliates was based on intense monitoring rather than a strict pass-through. The Department of State had been in agreement for many years, but with each subsequent personnel change the methodology was called into question. In all cases, the engagement partner accompanied the client or participated in conference calls with DOS representatives to clarify the nature of the organization’s relationship with its affiliates, and in all cases DOS accepted the indirect cost proposal. That’s Tait Weller’s “extra mile.”

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