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Organizational Requirements

May 2019

This webpage is intended to identify some significant additional conditions that OJP may include in FY 2019 awards, in order to address matters that may be particularly pertinent to particular types or categories of recipients. These additional conditions are used as appropriate to supplement the "General Conditions" to be included on OJP awards made in FY 2019.

Demonstrating non-profit status

Under certain OJP programs, an award may be made to a nonprofit organization only if the organization has "501(c)(3)" status under applicable Internal Revenue Service rules. Under certain other OJP programs, an award may be made to a nonprofit organization regardless of whether the organization has "501(c)(3)" status. If "non-profit" status -- but not "501(c)(3)" status -- is required for an organization to be eligible under a particular OJP program, an organization may demonstrate its non-profit status through one of following four methods:

  1. Submission of proof that the Internal Revenue Service currently recognizes the applicant entity as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code.
  2. Submission of a statement from the State taxing authority or State Secretary of State (or other authorized State official) certifying that the applicant organization is a nonprofit organization operating within the State, and that no part of its net earnings may lawfully benefit any private shareholder or individual.
  3. Submission of a certified copy of the applicant organization's certificate of incorporation (or comparable legal instrument) that clearly establishes the non-profit status of the organization.
  4. For an applicant organization that is a local nonprofit affiliate or local nonprofit subsidiary of a parent nonprofit organization, submission of any item above, if that item applies to the parent, together with a written certification from an authorized officer of the parent that the applicant organization is a local nonprofit affiliate or local nonprofit subsidiary of the parent.


Additional requirements pertinent to nonprofit organizations (for certain OJP programs)

Certain OJP programs, and the awards made under those programs, are authorized by statutes that (among other things) include requirements specific to nonprofit organizations. As a result, awards under some OJP programs may include a condition that, under certain circumstances, requires a recipient that is a nonprofit organization to disclose information regarding the process the organization uses to determine the compensation of its officers, directors, trustees, and key employees. Another award condition that may be included under some OJP programs requires a recipient that is a nonprofit organization to represent and agree that it does not, and will not during the period of performance, hold money in offshore accounts for the purpose of avoiding paying the tax described in 26 U.S.C. 511(a).


Conditions specific to for-profit organizations

Certain additional conditions are placed on OJP awards to for-profit organizations. Under these conditions, with a few exceptions, the specific cost principles and audit requirements set out in the Part 200 Uniform Requirements do not apply to for-profit organizations. Generally speaking, for-profit recipients are required to follow the contract cost principles set out in Subpart 31.2 of the Federal Acquisition Regulation (the "FAR"). The audit requirements that pertain to for-profit recipients (including requirements for submission of audit reports and corrective action plans) are specifically set out in detailed award conditions. (The audit "threshold" is the same as that under the Part 200 Uniform Requirements.) With regard to procurement contracts under the award, for-profit recipients must follow the "Procurement Standards" set out in the Part 200 Uniform Requirements (at subpart D of 2 C.F.R. Part 200).

Other provisions included in conditions on awards to for-profit recipients specifically preclude any profit or management fee, and impose certain restrictions -- typically for one calendar year after the end date of the award -- on competition for (or acceptance of) any federal procurement contract or federal grant or cooperative agreement that may result or derive from the award.


Return to "Overview of Legal Requirements Generally Applicable to OJP Awards - FY 2019"

Date Created: February 4, 2020