New Report Connects Reimbursement of Indirect Costs with Nonprofit Efficiency and Effectiveness

New Report Connects Reimbursement of Indirect Costs with Nonprofit Efficiency and Effectiveness

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Council of Nonprofits releases fourth in a series of solutions-oriented “streamlining reports” 
documenting issues with government-nonprofit contracting systems

Washington, DC - A new report details how a combination of governments’ inconsistent terminology, arbitrary application of those terms, and unrealistic expectations impair the ability of nonprofits to deliver services that governments at all levels contract with them to provide. The report, Investing for Impact: Indirect Costs Are Essential for Success, goes on to offer solutions that can result in even more efficient service delivery and better outcomes.

“This new report documents the harm created by government policies and practices that effectively force nonprofits to directly subsidize government programs by covering the actual indirect costs that are incurred while performing contracted services. This approach is not only unfair, but also unsustainable as nonprofits struggle in perpetual survival mode,” said Tim Delaney, President and CEO of the National Council of Nonprofits. “The solutions are simple and fair: governments must standardize the terminology and pay for the full cost of services which they contract with nonprofits to provide.”

“It is clear that there is momentum now moving us in the right direction. Acknowledgements from nonprofit watchdog groups and the OMB show that people are beginning to understand how important indirect costs are to effective service delivery,” added Jack Jackson, Senior Vice President, Finance and CFO of Catholic Charities USA. “State officials can help accelerate that process to the benefit of their communities.”

Investing for Impact is the fourth report in a series offering state and local governments solutions to improve contracting processes with nonprofits in ways that improve services to the public, restore value for taxpayers, and strengthen communities over time. More information on government-nonprofit contracting issues, and these earlier resources, can be found at


The National Council of Nonprofits is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more at

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