Making the Case for Investing Coronavirus State and Local Fiscal Recovery Funds in Charitable Nonprofits
Governments at all levels are receiving millions or billions of dollars in federal pandemic recovery funds, and Congress expressly authorized them to invest those resources in charitable organizations of all sizes and missions. Nonprofits (and governments too) have many questions about eligibility, types of programs – loans, grants, in-kind contributions– and processes for building and implementing effective programs. Those questions, and many more, are answered in the new Special Report from the National Council of Nonprofits:
Strengthening State and Local Economies in Partnership with Nonprofits: Principles, Recommendations, and Models for Investing Coronavirus State and Local Fiscal Recovery Funds
As readers of this newsletter know, charitable nonprofits provide vital services in every community in America. They are a key part of the economy, employing more people than the construction, finance, and manufacturing industries. During the pandemic, tens of millions more Americans than usual turned to charitable organizations for help – and nonprofits delivered. Yet resources declined for tens of thousands of nonprofits, resulting in the loss of more than 700,000 nonprofit jobs. For communities and local economies to recover, governments need to invest in the work of nonprofits.
Congress allocated $350 billion in COVID-19 relief funds for state, local, Tribal, and territorial governments to use in providing “assistance to households, small businesses, and nonprofits, or to aid impacted industries” (emphasis added). The federal government showed tremendous trust that governments closest to the people and their problems are best positioned to decide the best ways to spend their allocated resources to meet local needs. The Special Report explains that to do so effectively, state, local, Tribal, and territorial governments should consider:
- Guiding principles for identifying high-impact programs to fund. Governments need to apply fair guidelines and reasonable criteria to secure the greatest impact for the public good. These four principles should serve as a guide for setting objectives: (1) prioritize equity from the outset; (2) invest in economic multipliers; (3) implement quickly, yet fairly; and (4) maintain accountability via reasonable documentation and transparency.
- Recommendations for designing programs with integrity. Governments and constituents alike benefit when processes encourage the public to offer informed insights and suggest innovative ideas on how best to solve local problems. Reliance on recommendations for structuring and managing relief and grant programs, based on recent experiences at the state and local levels in utilizing funds from earlier COVID relief, will help shape future partnerships for relief, recovery, and impact.
- Successful models of nonprofit relief from around the country. A similar federal funding program for state and local governments has taught important lessons and generated worthwhile examples of successful programs from across the country. These recent programs offer models that can be adapted to meet communities’ greatest needs and promote constituents’ wellbeing.
So How Much Is Going to Governments in Your State?
When Congress authorized the $350 billion in Coronavirus State and Local Fiscal Recovery Funds, it allocated them separately to states, to counties, to metropolitan cities, and “non-entitlement areas” (local governments typically serving populations of less than 50,000, including cities, towns, townships, and villages). This chart adds those amounts together to show how much funding will flow into each state. The map below shows those totals. (The $20 billion allocated for Tribal governments will be calculated and distributed separately by Treasury.)
Serving Those Who Need It Most. In Partnership.
Nonprofits and governments are natural partners, serving the same constituents in the same communities. Partnerships between the sectors allow for leveraging of resources, relationships, and strengths to serve those communities even better. Governments at all levels are charged to serve and invest in those within their communities. Nonprofits have close relationships and high levels of trust with those they serve. They are perfectly positioned to maximize public benefits with their deep knowledge of community needs, reach, and existing relationships, particularly in low-income and underserved or hard to reach populations. We as a people are stronger when governments and nonprofits work together.
Call to Action
We encourage you to share this Special Report with your elected officials to build relationships and partnerships between the sectors, and to encourage sound investment decisions. When we all work together, we all win.