MTDC exclusions — amounts that do NOT count toward the base
| Total direct costs | — |
| Less: MTDC exclusions | — |
| = MTDC base | — |
| Indirect (rate × MTDC) | — |
| Total project budget | — |
MTDC excludes equipment, capital expenditures, participant support costs, rental costs, tuition remission, scholarships/fellowships, and the portion of each subaward exceeding $25,000 (2 CFR 200.1). Always confirm the program’s rules — some federal programs cap or disallow indirect.
The opposite of restricted grant dollars
Indirect-cost recovery helps — but it is still grant money with strings. Good Circles builds a base of recurring, unrestricted funding you can spend on whatever your mission needs, including the overhead funders underwrite poorly. Supporters pick your cause once, then a share of their everyday local spending funds you automatically — about 10% of each merchant’s net profit, conservatively ~$72 per active supporter per year (an estimate), free for your nonprofit.
Claim a Founding Nonprofit spot →Sources & tools
Free first
- 2 CFR 200 (Uniform Guidance), eCFR — the authoritative federal cost-principles text, including MTDC (200.1) and the de minimis rate.
- Grants.gov — find and apply for federal grants; program notices state any indirect-cost limits.
- National Council of Nonprofits — indirect costs — plain-language explainers on recovering true overhead.
Paid — optional labor-savers
- A grant-accounting CPA / cost-rate specialist — helps negotiate a NICRA when the de minimis rate leaves money on the table. Worth it when your federal funding is large enough that a negotiated rate beats 15%.
Last verified 2026-06-17. Figures and rules change — verify at the source before you act.
FAQ
What is the de minimis indirect cost rate?
The de minimis rate lets a nonprofit without a negotiated rate charge a flat percentage of its Modified Total Direct Cost (MTDC) base for indirect costs. Under 2 CFR 200 it is 15% of MTDC, effective for federal awards issued on or after October 1, 2024 (it was 10% before that).
What is the MTDC base?
Modified Total Direct Cost is your total direct costs minus certain exclusions: equipment and capital expenditures, participant support costs, rental costs, tuition remission, scholarships and fellowships, and the portion of each subaward over $25,000. You apply the indirect rate to MTDC, not to total direct costs.
Do I need federal approval to use the 15% rate?
No. The de minimis rate is available to any eligible non-federal entity that does not have a current negotiated indirect cost rate, with no prior approval or negotiation required. You must apply it consistently across your federal awards.
Should I negotiate a NICRA instead?
If your actual indirect costs run well above 15% of MTDC and your federal funding is substantial, a Negotiated Indirect Cost Rate Agreement (NICRA) can recover more. For smaller or occasional federal awards, the de minimis rate is simpler and avoids the cost of negotiating.