A larger organization often writes the application, holds the award and has the finance staff. A grassroots or neighborhood group often has the trust of the people the project is meant to serve. When the two partner, a common failure is that the community group's name appears throughout the proposal while its line in the budget is small, late or missing.
This article shows how to build that partnership fairly: pay partners for their work, share decisions in design, delivery and evaluation, and help smaller organizations meet requirements they may not have met before.
If they are named, they are budgeted
Start with a simple rule: every partner named in the proposal for a role should have a line in the budget that matches the role. A letter of support costs a partner an hour. Running outreach, hosting sessions or collecting stories from neighbors costs staff time, space, food, childcare, transportation and overhead.
Check your draft for three signs of an unpaid partner:
- The narrative says the partner "will lead" or "will conduct" an activity, but nothing in the budget pays for it.
- The partner is described as providing "in-kind" help that is actually core project work.
- The partner's cost is folded into your own personnel line, so they have no agreement of their own.
If a partner genuinely wants to give time as an in-kind contribution, that is their choice, but the offer should come from them, be written down and be counted properly. See cost share and match for how in-kind contributions are documented.
Shared decisions, not just shared tasks
Money is only part of sharing power. Decide up front who has a say in:
- Design: who helps shape the activities before the application is final. A partner who sees the plan for the first time in the draft has not been a partner in designing it.
- Delivery: who makes day-to-day decisions, and who can change the approach if it isn't working for the community.
- Evaluation: what counts as success, who sees the data and how findings are shared back with the community.
- Communications: who speaks for the project and how partners are credited.
Write these into the agreement. A short decision table works: for each type of decision, who decides, who must be consulted and who is informed. Our article on community voice in the proposal covers how to bring community knowledge into the application itself.
Pay them in a way that works for a small organization
A fair budget can still hurt a small group if the money arrives late. Under the federal Uniform Guidance, 2 CFR 200.305(b), the standard payment method for recipients and subrecipients other than States is payment in advance, provided the organization maintains or demonstrates the willingness to maintain written procedures and financial systems that meet the standards of the regulation. Advance payments are limited to the minimum amounts needed and timed to actual, immediate cash needs. Reimbursement is the preferred method in certain situations, and when it is used, the agency or pass-through entity must pay within 30 calendar days of receiving the payment request unless it reasonably believes the request to be improper.
What that means in practice:
- Ask what payment method the award allows, then write it into the subaward. If the community group can't carry costs for a month, say so before you agree on reimbursement.
- Set a payment schedule with a named person and a turnaround time.
- Agree on what documents trigger payment, such as a simple invoice and activity log, so the partner isn't surprised.
Check the funder's terms too. A foundation may allow advance payments more easily than a federal program.
Agree on indirect costs
Small groups have overhead too: insurance, bookkeeping, a phone and a place to meet. If you are passing federal money, 2 CFR 200.332(b)(4) says the subaward must state the indirect cost rate. If the partner has a negotiated rate with the federal government, you can't require it to use the de minimis rate. If it has none, you and the partner agree on a rate, and the de minimis rate is an option. Under 2 CFR 200.414(f), the de minimis rate is up to 15 percent of modified total direct costs.
Don't leave this blank. A partner that isn't offered an overhead rate is quietly subsidizing your project. Our article on dividing the budget fairly among partners has a worked example.
Help partners meet the requirements
Federal money comes with requirements that a small group may meet for the first time. Plan for them, and budget for the support.
- Unique entity identifier. A subaward must include the subrecipient's unique entity identifier. SAM.gov says an organization can get a Unique Entity ID without completing a full registration, though it then can't apply directly for federal awards. Check the notice for any stricter rule.
- Audit status. The lead must verify that a subrecipient is audited as required. Under 2 CFR 200.501, an organization that spends less than $1,000,000 in federal awards in its fiscal year is exempt from federal audit requirements for that year, so many small groups won't need a single audit. Still ask.
- Reports and records. The lead reviews the partner's financial and performance reports. Agree on a simple template and a calendar.
- Training and technical assistance. 2 CFR 200.332 lists training and technical assistance as a monitoring tool. Offer it as support, and put the time in your budget.
Treat these as the lead's job to make easy, not as a test the partner has to pass.
A worked example
Say a regional health nonprofit plans an outreach project with a neighborhood tenants' association. The first draft pays the association nothing and describes its role as "community engagement." The development director asks the association's leaders what the work will really take. Together they list it:
| Activity | Hours | Rate | Cost |
|---|---|---|---|
| Door-to-door outreach | 200 | $25 | $5,000 |
| Hosting 10 meetings (space, food, childcare) | 10 | $150 | $1,500 |
| Coordinator time for planning and reports | 100 | $30 | $3,000 |
| Direct costs | $9,500 | ||
| Indirect at 15% de minimis | $1,425 | ||
| Subaward total | $10,925 |
The numbers are hypothetical. The director adds the association to the budget with a subaward, sets a monthly payment schedule and gives the association a seat on the project's steering group. The proposal now says what the partner does, what it is paid and how it shares decisions.
Your next step
Open your next proposal's narrative and list every partner by name. Beside each, write the budget line that pays for their role. Any partner without a line is a conversation to have before you submit. Ask each one what the work really costs, and share the draft budget with them.
If the hardest part is getting a first draft on the page, SoliContraX can take you from the notice to a draft built from your materials, so more of your time goes into the partnership conversations. See how to get started.