New Rules Can Help You Increase Your Government Overhead Reimbursement

Direct from Donna with Headshot

Happy New Year!

2015 is already proving to be a significant one for nonprofits. In case you missed the big news that Michigan Nonprofit Association (MNA) announced earlier this month, governments at all levels are now required to reimburse nonprofits for the reasonable indirect costs (sometimes called “overhead” or “administrative” costs) they incur to deliver services.

As you know, entering into a contract for services with a government agency has often meant that we had to accept low limits on the amount of reimbursement for indirect costs. Essentially, government agencies were asking us to lose money in order to do the work.

A recent study by Charity Navigator says that the average American does not understand the indirect costs of the nonprofit sector. In fact, the study says that 62 percent of the people surveyed believe the typical nonprofit spends more than what is reasonable on overhead expenses such as fundraising and administration.

The new federal Office of Management and Budget Uniform Guidance rules are setting a precedent for the way that foundations and other funding sources view the indirect expenses that nonprofits incur. By instituting these new rules and paying their fair share of the costs that we incur in providing services and supports, the federal government is setting an example.

The Uniform Guidance rules now call for more costs to be directly reimbursable. They also raise the threshold for single audits to $750,000. It is estimated that this change alone will reduce the administrative costs for approximately 5,000 nonprofits across the country. Specifically it will help to ease the administrative costs and improve the efficiency and effectiveness of federal and state contract awards.

I urge you and your team to do a deep dive into what these new rules mean to your organization and your current and future contracts. You can start by registering for this free webinar presented by MNA and the National Council of Nonprofits:

Stop Losing Money: New Grant Rules You Need to Know
New OMB Uniform Guidance: Find out how new reforms can save you money
3-4 p.m. Tuesday, Feb. 24

If you receive federal funds, either directly or through pass-through funding, this webinar is a must. Are you unsure if your organization receives federal funding? Check your most recent audit.

MNA will continue to educate Michigan nonprofits, foundations, funders and other donors on our indirect costs and what they support.

We will continue to share information on the OMB rules, as well as how nonprofits can prepare for and take full advantage of the changes.

Learning your rights will help support a successful year for the good work you do throughout 2015!

Michigan Nonprofits – Do you know your economic impact?

Direct from Donna with Headshot

As the business community and policymakers talk about the road to economic recovery coming up to the election and beyond, our sector must remember that we too are key players and contributors to building a stronger Michigan. So often our work and its significance flies under the radar.

If you have not read the MNA-commissioned, Economic Benefits of Michigan’s Nonprofit Sector Report , produced by Public Sector Consultants and released this year, I urge you to do so. It is a tremendous tool to help us all understand the value that our sector provides to the economy.

The report bears out that nonprofits have held their own under some very tough economic circumstances, and employment in our sector has actually increased. The nonprofit sector now employs about the same number of people as durable goods manufacturing, which includes the auto industry. More than 438,000 individuals, or 11 percent of the state’s workforce, were employed by nonprofits in 2013.As nonprofits come to the table with government, business and communities, it is important that we understand our impact. We have had to be nimble and proactive so that we can contribute in innovative ways. While filling in gaps and providing services to address the needs of residents remains a primary focus for nonprofits, our sector has the resources to effect change on a much broader scale. It is time for Michigan nonprofits to really see our influence and embrace our ability to be change-agents and great partners in this state.

Together, we need to continue to educate ourselves on our collective contributions to the economic wellbeing of the state, and we need to continually reinforce those messages to other sectors. The Michigan nonprofit sector provides innovation and stability to the most vulnerable in uncertain times. We are major employers in the state, as well as major service providers. We see trends, often before other sectors. And we often feel the impacts of times of crisis before others.

Armed with the data, we all have the opportunity to reframe the discussion on the value of Michigan nonprofits. So often we are about doing the work, securing the funding, and looking at our individual organization’s bottom lines, and we forget the successes and strengths that collectively we offer.

Take some time to review the report. In addition, I am excited to announce that MNA is hosting regional trainings on how to use the data.

Jeff Williams, CEO of Public Sector Consultants will present two regional workshops this year. These workshops will highlight interesting data and trends as well as demonstrate the powerful web-based tool that allows users to drill down into this data set.  These interactive, interesting and educational workshops will give you the tools you need to communicate the influence of the sector to your stakeholders.

Events are free but registration is required.

Economic Impact of Nonprofits in West Michigan

Wednesday, November 19, 9:00-10:30 a.m., Johnson Center for Philanthropy, Grand Rapids

Economic Impact of Michigan’s Nonprofit Sector

Tuesday, November 25, 10:00-11:30 a.m., Michigan Nonprofit Association-Armory Building, Lansing

Donna Murray-Brown
President & CEO
Michigan Nonprofit Association

Complete MNA’s 2014 Compensation & Benefits Survey – the Quality of Your Team Depends on It!

We work for the cause and not for the money, but even in the nonprofit sector we want a fair wage.

But how do you figure that out? How do you make sure you aren’t underpaying your employees just because their focus is on making a difference, not making a paycheck?

The Michigan Nonprofit Association’s Compensation and Benefits Survey is our tool. It gives us rich data on wages, broken down by geographic region, budget size, and organization type. It helps us understand the market for talent in the nonprofit sector and provides honest benchmarks for us to measure our wages against. It gives us the confidence that we’re asking for the right personnel support in grant proposals and that we’re treating our employees with the care and dignity they earn every day.

But it doesn’t work unless you and I participate.

There are thousands of nonprofits in Michigan, but only a fraction provide this salary data every other year. To make the survey a truly valuable tool, we need all of us to weigh in. It does take a little bit of time to fill out — I spent about 30 minutes on ours — but you get access to the data in return. And you help ensure that the whole nonprofit community has a valuable tool to use in setting salaries.

Please, take the time to fill out the Compensation and Benefits Survey this week. A fair wage is everyone’s business, and together we can help ensure Michigan nonprofits are giving their employees the right return for an almost immeasurable investment.

Your appropriate HR person may complete the survey at Deadline extended to 9/26/2014.

Conan SmithConan Smith is the Executive Director of the Michigan Suburbs Alliance and a Washtenaw County Commissioner representing Ann Arbor. He chairs the board of Michigan Saves and is a member of the Michigan Utility Consumer Protection Board and the Michigan Works Association board.

Succession and Leadership Planning Are Key to Nonprofits

Succession planning is key to all organizations if they are going to remain sustainable. But so many times nonprofits forget or put off the decisions that go into creating a solid and actionable succession plan. This is a critical time for Michigan’s nonprofit sector to take a long hard look at succession planning. It should be an important part of each organization’s strategic planning, now and in the future.

Admittedly, succession planning is not easy. In fact, it can be uncomfortable and hard for boards and staffs to grapple with over time. The notion of who will take over the ship is not only important within an organization, it is something that funders look at when they consider investments and support of your organization. Having a succession plan in place shows that your board and staff leaders are paying attention to leadership transition.

Carve Out Time to Plan and Execute

Leadership succession is most often not an emergency – it’s not the fire that needs to be put out today, so it gets put off until tomorrow. The current demands that are placed on nonprofits can be overwhelming. This work requires some quiet, thoughtful time that organizations don’t often have, because they are constantly running as fast as they can. But we all have to carve out the time. [Nonprofits are facing increased demands for their services with increasingly fewer resources to accomplish them. See Nonprofit Finance Fund’s findings from 2014 State of the Sector survey: 80% of respondents reported increased demand, the 6th straight year of this finding.]

Where’s Your Back-Up Person?

In any organization, leadership transition is a destabilizing time; especially when an unexpected /emergency transition occurs. At Michigan Nonprofit Association we have seen this create a situation of great vulnerability for nonprofits, especially when there is not a deep bench of CEOs-in-waiting already on staff who are the logical next leaders. Start building a strong staff of future leaders and cultivate that talent.

You May Need a Consultant to Help Navigate the Discussion

Succession and leadership planning discussions can be emotional and often uncomfortable. Your board members may dance around this issue, not wanting to bring it up for fear of damaging their relationship with the current leader. Often using a 3rd party/consultant is the best way to approach transition planning in order to provide more objectivity. Bringing in a consultant requires a financial investment in the process, which could mean culling extra and unplanned expenses. Planning ahead is critical.

It’s Complicated

Choosing the next leader for your organization is a big deal. It requires knowing where the organization is going and what the future needs will be. This is fundamentally the role of the board, yet board members may be new or inexperienced.  The planning process and an executive search process are time-consuming and generally infrequent events that only a few board members have experience with, so it’s not uncommon that everyone ‘puts it off’ until there’s a crisis. It may be common, but it isn’t prudent!

Similarly, CEOs/executive directors find it awkward to initiate the discussion – because they don’t want to unintentionally or prematurely signal to the board that they want to leave – so a strong relationship with the board chair can help. A candid conversation between the board chair and staff helps get many succession planning issues out in the open early.

At MNA, we continue to study the issues and challenges that our member organizations face. As you tackle succession and leadership planning and transitions, know that we are here to help you. You too can help us share this important issue with the field. If you have stories and best practices that you’d like to share, please send your stories me at


Donna Murray-Brown
President & CEO
Michigan Nonprofit Association 

Get Ready, Here It Comes… Increasing the Minimum Wage

On September 1, 2014, Michigan’s Workforce Opportunity Wage Act, Public Act 138 of 2014, will go into effect. The new Act will increase the minimum wage for workers in the state from $7.40 to $8.15 per hour.

In Michigan, one out of 11 workers are employed by nonprofit organizations. Many employees of Michigan Nonprofit Association member organizations are paid at the minimum wage. We also know that nonprofit organizations in Michigan and across the country provide many valuable services and support to Americans who are living in poverty, including the “working poor.”

Nonprofits in the state directly employed 438,000 individuals in 2013. Together the nonprofits in Michigan pay their employees over $4.9 billion per quarter. Our members have weighed in on both sides of the debate around raising the minimum wage.

The minimum wage increase is a policy that will have significant impact for our member agencies and for the state. While our nonprofits provide valuable services, many operate as lean small businesses. And just like small businesses across the country are grappling with the impacts of a minimum wage increase, so will our nonprofits in the coming weeks and months. The key thing to remember is that the debate is over.  Starting in September, nonprofits, along with small businesses and large corporations will be expected to raise the minimum wage payments for their hourly workers.

Wherever you personally weigh in on the issue of an increased minimum wage, as a nonprofit with employees, this increase will initially impact your bottom line. And it will require lots of planning and reviewing as a part of the sustainability for many of your organizations.

Many of you have already begun your strategic planning to address the financial implications that this increase may have on your budgets, staffing and reimbursement levels for direct services. There is no question that the increase in wages will require an increase in revenues and donations, much in the same way that small businesses will have to think strategically about creating more revenue to support the wage increase. We will continue to revisit this subject and share with you some of the strategies that your colleagues are implementing in the field to make this a seamless win-win.

For information and questions on compliance, contact Michigan’s Department of Licensing and Regulatory Affairs (LARA) at,4601,7-154-61256_11407_32352-140972–,00.html. Organizations seeking professional assistance can search MNA’s Consultant & Resource Directory for companies that specialize in accounting & auditing or human resources for nonprofits. The Consultant & Resource Directory is available at

 Submitted by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

Passing the Leadership Baton

Are you interested in creating relationships that will lead to future career opportunities?  Would you like to sit down with an experienced nonprofit or philanthropic executive?  If the answer is yes, register for “Passing the Leadership Baton,” a dynamic, full-day workshop, March 25 in Detroit. Designed to improve your knowledge of the nonprofit sector, this program for “40s and under” will help you build a trajectory that will take you to the C-suite!  The day includes inspiring and expert speakers, sessions on developing mentoring relationships, executive recruiters, speed coaching by area leaders and costs only $20.

MNA President & CEO Donna Murray-Brown is a featured speaker at this event.


“It is rewarding for me to share my story of executive leadership with the Michigan Nonprofit Association with Michigan’s emerging new leaders.  As a native Detroiter, I believe that it is critically important that we provide professional development opportunities for the next generation of nonprofit and philanthropic leaders in our city.” – Donna Murray-Brown, President & CEO, Michigan Nonprofit Association 

Complete details and registration at

This event is co-sponsored by the Council of Michigan Foundations and Wayne State University.  Event supporters include Quicken Loans, Michigan Nonprofit Association, YNPN Detroit and EPIP Michigan.

Share this opportunity with your colleagues and join the conversation #NextGenDetroit!

The MNA*VISTA Program and MLK Day Impact

The Michigan Nonprofit Association houses a Civic Engagement AmeriCorps*VISTA (Volunteers in Service to America) program through which 30 VISTAs throughout the state of Michigan build the capacity of local organizations in efforts to bring individuals and communities out of poverty.  Our MNA*VISTAs work in conjunction with Michigan Campus Compact, Volunteer Centers of Michigan, and The LEAGUE Michigan to promote and facilitate lifelong civic engagement.

ac MNA logo 295

Civic engagement can look different for everyone. Our VISTAs focus on engaging community members through service-learning, student engagement, college access and success, financial literacy, and employability skills. All of these are goals within the areas of education and economic opportunity, two areas which, if improved within the state of Michigan, can help eliminate poverty.

One way in which MNA*VISTAs engage community members is organizing and facilitating service projects for well-known and important national days of service. Martin Luther King, Jr. National Day of Service is one of these widespread service days, and was held in 2014 on January 20, 2014. On MLK Day, our VISTAs were out in their communities in full force facilitating and managing service projects to raise awareness of this day and rally communities together to unite and serve.

Through service projects held on and around MLK Day, our VISTA cohort completed 29 independent projects (including some large multi-site projects), and recruited 1,368 volunteers! These volunteers served a combined 2,460 hours of their time completing projects addressing hunger & homelessness, animals, environment, health & wellness, veterans, literacy & education, food access and more.

MNA*VISTAs Rachelle Rice and Michael Januzzi, who are serving at Delta College in University Center, Michigan, facilitated a service project in which Bridgeport High School and Ruben Daniels Middle School students created a mosaic of Martin Luther King, Jr. The “Dr. King Mosaic” is comprised of 216 tiles, each of which has special meaning to a Bridgeport or Ruben Daniels student.

Dr King Mosaic

MNA*VISTA Matthew Vargo who is serving at Volunteer Kalamazoo in Kalamazoo, Michigan, organized and facilitated a march in remembrance of MLK Jr. which began at Western Michigan University, ran through the city of Kalamazoo, and ended at MLK Memorial Park. Participants then released biodegradable balloons after hearing speeches from community leaders. This was part of a large day of service in which 275 volunteers gave their time at 19 project sites throughout the Kalamazoo area.

MLK Day Kalamazoo

As you can see from these two examples, our MNA*VISTAs are doing fantastic work! Since most of our members began their service terms in August 2013, they will wrap up their terms in August 2014, and we’re looking for new members to continue the great work our current VISTAs have started. If you’re interested in becoming an AmeriCorps*VISTA starting in August 2014, please contact our program staff at!

Chelsea Leser2Submitted by Chelsea Leser, AmeriCorps*VISTA Leader, Michigan Nonprofit Association


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