General Management Costs for State Humanities Councils

(Published on January 25, 2022) 

General Operating Support (SO) awards support state humanities councils’ (SHC) programming in the United States and its jurisdictions. NEH permits SHCs to incur costs across four functional areas:

  1. Program services, council-conducted projects, and public meetings
  2. Fundraising
  3. Subawards
  4. General management

NEH defines “general management costs” for a SHC as the portion of its SO award it expends to maintain day-to-day operations. General management costs cover all allowable expenditures for organizational administration. They include, but are not limited to, administrative costs for subaward programs—such as subrecipient monitoring, site visits, grant administration and reporting—and financial management. All costs must be allowable per 2 CFR § 200.403.

Allowable general management costs

The following expenses are allocable to general management costs:

  • Salaries and wages for council personnel, tracked by time allotted to each programmatic activity. All salaries and wages must be in accordance with 2 CFR § 200.430.
  • Fringe benefits (health insurance, life insurance, retirement, etc.) for council personnel. Fringe benefits must be in accordance with 2 CFR § 200.431.
  • Travel (when taken for the administration of the council, rather than for specific programmatic work)
  • Consultants (including those for fiscal services, information technology, marketing and communications, public affairs, general management training and coaching, and strategic and organizational planning)
  • Office rent, maintenance, telephone, and utilities
  • Materials and supplies, in accordance with 2 CFR §§ 200.314 and .453
  • Mailings, postage, and handling
  • Equipment for general administrative purposes (purchases, rentals, and maintenance, as permitted by the terms and conditions of the award and in accordance with 2 CFR §§ 200.313 and .439)
  • Computer services (including hardware, software, and website maintenance)
  • Council members’ board meetings
  • Memberships, subscriptions, and professional activity costs (including the National Humanities Conference or professional development related to council board governance and in accordance with 2 CFR § 200.454)
  • Dues for participation in the Federation of State Humanities Councils (provided the Federation doesn’t use the funds for lobbying activities such as “Humanities on the Hill.” See the Lobbying Activities in General Terms and Conditions for General Support Grants to State Humanities Councils (for grants issued on or after December 26, 2014.))
  • Financial services
  • Audit services
  • Legal services
  • Property taxes
  • Bank charges
  • Depreciation expenses (for real property and equipment)

Unallowable general management costs

 SHCs must not charge the following as general management costs:  

  • Costs claimed as fundraising, programmatic activities, or subawards (these costs must be accounted for separately from general management costs). Examples of costs to be accounted for separately from general management costs include, but are not limited to:
    • planning, design, and implementation of council-conducted projects (including standing programs such as book festivals, speakers’ bureaus, lecture series, and podcasts)
    • program-related services (such as hiring consultants for program implementation, program facilitators, and project scholars)
    • creation and operation of council-sponsored resource centers (council-produced libraries, archives, databases, and other collections of council products and resources)
    • staff time spent on council-conducted programs
  • Lobbying activities per 2 CFR § 200.450 (including travel, staff time, and dues for participation in the Federation of State Humanities Councils when used for lobbying activities such as “Humanities on the Hill”)
  • Social or political advocacy
  • Administrative costs for debt restructuring
  • Construction, renovation, or acquisition of real property, including the development of design and construction documents. Costs for construction, renovation, and acquisition of real property do not include maintenance and repair costs under 2 CFR § 200.452.
  • Rent for home office space
  • Unallowable costs listed in the Notice of Funding Opportunity
  • Unallowable costs listed in the general terms and conditions of award
  • Unallowable costs under 2 CFR Part 200 Subpart E - Cost Principles

Indirect Costs

General management costs are not the same as indirect costs, also known as facilities and administrative costs (F&A). Indirect costs are expenses that cannot readily and specifically be identified with an individual project. Indirect costs are determined by applying a negotiated rate with a cognizant federal agency. Since SO awards support the costs to cover the management of day-to-day operations, claiming indirect costs using a negotiated rate is unallowable.   

SHCs must not apply an indirect cost rate to their SO awards. However, if an SHC incurs costs typically allocated as indirect costs per 2 CFR § 200.414, these costs may be charged as direct costs under the general management cost classification.

Indirect Costs on Subawards

A subrecipient may charge indirect costs to a subaward made under an SO award. If a subrecipient has negotiated an applicable indirect cost rate agreement with the federal government, the SHC must accept the rate. Otherwise, the subrecipient may negotiate an indirect cost rate with the SHC or use the de minimis rate of 10 percent. The SHC must include the indirect cost rate in the subaward information, as required in 2 CFR § 200.332(a)(1)(xiv). A subaward’s total costs (direct and indirect) are part of the SO award’s direct costs.