Business
In this episode of Nonprofit Horizons, host Bryce Lord explores the strategies and benefits of federally negotiated indirect cost rates (NCRA) for nonprofits. Indirect costs, which include expenses such as accounting, IT, HR, facilities, and administration, are essential to the smooth functioning of nonprofit organizations. However, recovering these costs can be a challenge. NCRAs provide a way for nonprofits to reclaim some of these crucial overhead expenses and stabilize their funding.
Bryce explains the concept of NCRA and its importance in ensuring financial sustainability for nonprofits. He highlights how a well-negotiated NCRA can secure a higher rate, sometimes up to 30% to 40%, compared to the default rate of 10%. This additional revenue can make a significant difference in investing in staff, infrastructure, and capacity building.
To help nonprofits navigate the process of obtaining a NCRA, Bryce outlines the key steps involved. This includes identifying the cognizant federal agency, gathering detailed financial records, and submitting an indirect cost proposal. He emphasizes the importance of justifying costs and demonstrating their criticality to program success during the negotiation phase.
The episode concludes with a reminder of the bottom