Statement on Action by LA County Board of Supervisors to Pay Nonprofits Their Full Costs

Statement on Action by LA County Board of Supervisors to Pay Nonprofits Their Full Costs

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Tim Delaney, President and CEO of the National Council of Nonprofits, made the following statement regarding the November 3rd passage of an LA County Board of Supervisors motion to improve communities by paying reasonable costs for nonprofit services:

“Los Angeles County has now raised the bar for collaboration between governments and nonprofits by stating its firm stance that its nonprofit partners must be paid the full cost to deliver services that the County contracts with them to provide. We urge states, counties, and localities across the country to follow its lead as the first local jurisdiction to insist on full implementation of the OMB Uniform Guidance.

“Research shows that for too long, governments at all levels that hire nonprofits to perform services have been shortchanging nonprofits, forcing foundations and individuals to subsidize the funding gaps when governments fail to pay their fair share. We applaud the LA County Supervisors for their leadership in being the first local officials in the nation to formally declare that 'all governments entering into written agreements with nonprofits to deliver services to the public have an affirmative duty to pay their fair share of the costs that those nonprofits incur.'

“Importantly, the LA County Supervisors recognized that while the OMB Uniform Guidance is already the law of the land, full implementation will require cooperation and collaboration between nonprofits and county government, as shown by the motion’s directive that the county executive consult with area nonprofits and philanthropic leaders for their input and advice in developing solutions to local problems. Further, recognizing the need for coordination with the state government, the Supervisors agreed to send a letter urging state leaders to also play a leadership role in properly implementing the federal grants reforms as they relate to nonprofit organizations.”


The OMB Uniform Guidance went into effect on December 26, 2014. It requires governments at all levels – local, state, tribal, and federal – that hire nonprofits to deliver services to reimburse nonprofits for the reasonable indirect costs (sometimes called “overhead” or “administrative” costs) they incur on behalf of governments when federal dollars are part of the funding stream. The motion by the LA County Board of Supervisors both embraces this new requirement and makes a strong statement about the partnership of County government and nonprofits that work together to serve the same constituents in the same community.

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