Top takeaway: By July 23, share your thoughts on the state’s draft guidance on administrative costs with the state’s Office of Grants Management (OGM) through this survey: OGM Reasonable and Necessary Guidance Feedback Form.
Since 2025, Minnesota state law has required grantees to have administrative costs that are “necessary and reasonable,” rather than previous language which required grantees to “minimize administrative costs.” (Minn. Stat. § 16B.98 subd. 1(a))
The state’s Office of Grants Management (OGM) has developed draft guidance intended to help state agencies interpret and apply what “necessary and reasonable” means in practice. The state is now seeking feedback on that draft guidance until July 23. The statute also requires state agencies to negotiate appropriate limits on administrative costs.
In addition to the draft guidance, OGM has created a draft voluntary checklist tool for agency staff to use when evaluating administrative costs.
This guidance could have important implications for how state agencies assess nonprofit administrative costs (also called “indirect” and “de minimis” costs) in grant contracting processes.
Who should review the drafts and share feedback?
- Nonprofits with experience managing state grants
- Nonprofits interested in partnering with the state through grants but who do not apply due to insufficient administrative cost allowance