Understanding the New $15,000 Micro-Purchase Threshold

Nonprofits that receive federal funding now have greater flexibility for small purchases, but only if their procurement policies are up to date.

As of October 1, 2025, the federal government has raised the micro-purchase threshold from $10,000 to $15,000. This change originates from the Federal Acquisition Regulation (FAR). Because the Uniform Guidance (2 C.F.R. § 200.320) follows the FAR’s definition, the new threshold also applies to federal grant and cooperative agreement recipients, including nonprofits.

What This Means for Your Nonprofit

If your nonprofit receives federal funding, you can now make purchases up to $15,000 under simplified “micro-purchase” rules that typically don’t require competitive quotes.

Your organization cannot take advantage of the higher threshold until your written procurement policies and procedures are updated to reflect it. Auditors are required to test compliance against your organization’s internal policies, not just the federal rules. As always, proper documentation remains essential.

Key Actions to Take

Update your procurement policies and procedures.

Revise your procurement manual, policies, or standard operating procedures (SOPs) to reflect the $15,000 threshold. Check that approval levels align with this change.

Communicate the update to your team.

Make sure staff responsible for purchasing, budgeting, and program management understand the new limit and its implications. If your organization uses purchase cards, verify that cardholders are trained on the updated threshold and related controls.

Review upcoming and past purchases between $10,000 and $15,000.

If you have procurements just above $10,000, or procurements in the “gap zone” (between $10,000-15,000) that previously required the simplified acquisition method, you might now have more flexibility.

These purchases may now qualify to be awarded without soliciting competitive price or rate quotations under micro-purchase rules. However, you cannot apply this change retroactively to purchases made before your policies are updated. You cannot retroactively reclassify or change procurement methods for completed awards.

Keep documentation strong.

Even under micro-purchase rules, it’s important to document why each purchase was reasonable and necessary. Auditors and oversight agencies will expect evidence that the procurement was appropriate.

Maintain vendor justifications, pricing support, and approval records to support compliance during audits.

Coordinate with subrecipients.

If your nonprofit passes federal funds to subrecipients, notify them of the change and encourage them to update their procurement policies accordingly.

Consider budget and planning impacts.

With the higher threshold, some purchases may now move more quickly through your procurement process. This could influence project timelines, administrative costs, and how your organization forecasts spending. Review upcoming budgets to ensure they reflect this new level of flexibility.

Stay alert for further guidance.

Regulatory updates don’t always arrive all at once. Changes to the FAR or Uniform Guidance may come with additional clarifications, transitional guidance, or new audit expectations. Our team will continue to monitor these developments closely, and we will share updates as new information becomes available.

In addition, federal agencies sometimes issue their own implementation instructions or grant-specific terms that modify how these rules apply. Be sure to review communications from the agencies that fund your programs, as their requirements may further restrict or clarify how the new threshold can be used.

Why It Matters

By updating your procurement policies now, your organization can:

• Take advantage of the increased $15,000 micro-purchase threshold
• Maintain compliance with federal procurement standards
• Reduce administrative effort for smaller purchases

We’re here to help.

Navigating federal procurement standards can be complex, especially when changes like this affect multiple layers of compliance. Our single audit advisory team works with nonprofits to review procurement policies, identify compliance gaps, and ensure your organization is positioned to take full advantage of updated federal thresholds while staying audit-ready. For further assistance implementing this new standard, get in touch with our team.