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Maryland General Assembly Considers De Minimis on State Funds

Testimony Presented to Support Maryland Senate Bill 1045

I am of the mindset that everything we do in the grants community is important; however, there are some days that present special opportunities to step up to the plate in support of our work and profession. Recently, I delivered testimony in support of a Senate Bill before the Maryland General Assembly, together with colleagues from the Maryland Chapter of the Grant Professionals Association (GPA) and Maryland Nonprofits, a 501(c)(3) membership association that works to promote the nonprofit sector in Maryland, including public policy advocacy and raising a collective voice. I like that, our collective voices. 

Maryland Senate Bill 1045 State Government Grants & Contracts Reimbursement of Indirect Costs was reviewed by the Senate Committee for Education, Health and Environmental Affairs on March 6, as part of the legislative process. The bill proposes a 10 percent de minimis flat rate on state-funded awards in addition to federal awards, as provided by the uniform guidance. SB 1045, therefore, would provide consistent treatment of costs on state-funded grants whether the awards were federally connected through a pass-through subaward or supported entirely by state funds.
The testimony supported the bill, but it also provided a meaningful opportunity to offer input to the bill's language in order to better align with the uniform guidance. The Maryland bill omitted modified total direct costs, for example, which should be included in the language. It also defined eligibility as nonprofits that had not negotiated an indirect cost rate, rather than had never negotiated an indirect rate.
Henry Bogdan, Director of Public Policy for Maryland Nonprofits, explained that testimony from experts in the field plays a crucial role in the legislative process, especially in states that have a full and time-constrained legislative agenda. Elise Saltzberg, a fundraising consultant in Maryland and also a member of Maryland GPA, supported logistics of the testimony and reminded all of us that the bill would present an improvement over current practice.
Many nonprofits lack the capacity and resources to formally negotiate an indirect cost rate. The alternative of a de minimis rate would greatly provide much needed support of operating costs for those organizations that need it the most. We hope SB 1045 receives an affirmative nod from the Maryland State Senate, and if you are ever invited to raise a collective voice, go for it.
Karen Norris is nationally recognized in the grants community as a training consultant and Subject Matter Expert (SME) for k4rnoco - a k4ren norris company in Gaithersburg, MD, and has experience in grants and contracts for more than 20 years, previously as a grants administrator for educational institutions, as an author and managing editor for national grants publications, as an invited presenter at conferences, and on Boards of Directors for nonprofit organizations and professional associations. 



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