What is the $25,000 subgrant/subcontract rule applicable to nonprofit organizations?
According to 2 CFR 230 (Circular A-122), Appendix A, Section D.3.f, if the nonprofit organization‘s distribution base is modified total direct costs (MTDC), then the organization is subject to the $25,000 subaward rule. The rule states that MTDC includes “subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract)”. Please note that this rule only applies to subawards given out by the nonprofit organization.
