ARPA Funds Are There to Do Good
When Congress approved sending $350 billion in fiscal recovery funds to state, local, Tribal, and territorial governments as part of the American Rescue Plan Act (ARPA), it expressly authorized those governments to invest resources in charitable nonprofits serving their communities. Specifically, governments may use the federal funds directly or through others, meaning that individual charitable nonprofits can be both the recipient of assistance as well as the provider of assistance to others. But those resources aren’t going to flow automatically to deserving charitable organizations; many private interests are already competing aggressively for the funds.
So governments and nonprofits have the best information and framework to decide how the dollars can best be spent for the public good, the National Council of
Nonprofits published a Special Report: Strengthening State and Local Economies in Partnership with Nonprofits: Principles, Recommendations, and Models for Investing Coronavirus State and Local Fiscal Recovery Funds. It shares guidance based in part on recent examples from across the country to help governments and charitable nonprofits work together serving people in local communities.
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. See Advocacy in Action, below, for more insights on using the report and resources to advocate for relief for nonprofits and communities.
Bipartisan Infrastructure Deal, Blessed by the President, Faces Uncertainty
The President and a bipartisan group of Senators publicly declared their agreement on the nearly $1.2 trillion Bipartisan Infrastructure Framework to build roads, bridges, broadband, and other “traditional” or “hard” infrastructure projects. The
deal’s costs reportedly will be fully paid for with a variety of savings and revenue raisers. These include implementing “unemployment insurance program integrity,” redirecting unused unemployment relief funds, and repurposing unspecified and unspent relief funds from 2020. Notably, the framework does not call for clawing back some of the $350 billion in Coronavirus State and Local Fiscal Recovery Funds authorized in 2021. This is a win for charitable nonprofits and local governments that forcefully opposed proposals to redirect these funds. As the National Council of Nonprofits recently wrote to congressional leaders, “The recovery is not assured; many people, communities, and the organizations that support them continue to suffer from the pandemic’s aftermath. The State and Local Fiscal Recovery Funds must be used for their intended purpose of securing a full and complete recovery.” See also, the Nonprofit Quarterly article, Nonprofits Must Speak Up Now to Protect COVID-19 Recovery Funds.
The ultimate passage of the infrastructure package is in doubt due to conflicting Democratic priorities and uncertainty about whether there will be enough Republican support in the Senate to overcome a filibuster. Prior to the announcement of the bipartisan deal, Speaker Pelosi expressed qualified support, but made clear that the legislation would only move in the House in tandem with a multi-trillion dollar spending package using the budget reconciliation process to enact more of the President’s priorities. Some Republican participants in the bipartisan Senate negotiations have balked at this strategy. President Biden issued
a statement over the weekend reaffirming his support for the Bipartisan Infrastructure Framework and backing away from the both-or-nothing approach.
- Federal Workforce Equity Executive Order: On June 25, President Biden signed an Executive Order to advance diversity, equity, inclusion, and accessibility (DEIA) in the federal workforce. In addition to launching a government-wide initiative to advance DEIA, the order charges all federal agencies to assess the current state of progress on DEIA issues within their workplaces, plus develop and act on plans to eliminate barriers to success that employees from underserved communities face. It calls on agencies to establish or elevate Chief Diversity Officers, expands training throughout the federal workforce,
requires a comprehensive plan to address workplace harassment, reduces government reliance on unpaid interns, advances pay equity, and promotes equity in the workplace for individuals with disabilities and for LGBTQ+ public servants. Read the White House Fact Sheet for more information.
- OSHA Issues COVID-19 Workplace Safety Rules: This month, the Occupational Safety and Health Administration (OSHA) has implemented a long-awaited comprehensive COVID-19 workplace safety standard that provides employers guidance and defines obligations. Primarily focused on healthcare and related support service workers, the Emergency Temporary Standard (ETS) requires employers in the healthcare industry and in facilities providing healthcare services to develop COVID-19 safety plans and to take specific steps to reduce the transmission of COVID-19 in the workplace. OSHA also issued updated guidance on mitigating and preventing the spread of COVID-19 in all other types of workplaces. Specifically, the new guidance focuses only on protecting unvaccinated or otherwise at-risk workers in their workplaces; most employers no longer need to take steps to protect fully vaccinated workers. The guidance recommends, but does not require, employers to grant paid time off for employees to get vaccinated, offers instructions on stay-home orders to infected workers, reiterates advice on social distancing, personal protective equipment, and more.
- Eviction Moratorium Extended: The Director of the Centers for Disease Control and Prevention (CDC) extended through July 31 the agency’s nationwide moratorium preventing the eviction of tenants who are unable to make rental payments. The CDC issued the initial moratorium in 2020 as a measure to reduce the spread of the coronavirus and has extended it several times. The extension through July reportedly will be the last. In connection with the CDC announcement, the White House issued a Fact Sheet
announcing several initiatives to promote housing stability by supporting vulnerable tenants and preventing foreclosures.
- Dirty Dozen Tax Scams: The IRS is issuing its annual Dirty Dozen Tax Scams over four days this week to alert taxpayers to recurring unlawful schemes. This year’s “Dirty Dozen” will be separated into the following categories: Pandemic-related scams like Economic Impact Payment theft (6/28); Personal information cons including phishing, ransomware and phone ‘vishing’ (6/29); Ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud (6/30); and Schemes that promote abusive structures such as syndicated conservation easements (7/1).
- Workforce Development Through Post-Graduation Scholarship Act: Bipartisan legislation in the House and Senate (H.R. 4095/S.2191) would treat post-graduation scholarships the same as traditional scholarships for tax purposes. Foundations and nonprofits provide these post-graduation scholarships to attract workers with essential skills to needed communities and address the student debt crisis. The legislation
would define post-graduation scholarship grants as a charitable activity for the granting organization, ensure the program is benefiting those communities most in need, and require reports to Congress on the implementation of the program.
Charitable Giving Data Updates
In the past few weeks, separate reports provided a somewhat clearer picture of charitable revenues through the depth of the pandemic. Nonprofit survivability looked bleak throughout most of 2020, but sector-wide revenues turned out better than feared because “[g]overnment support through the PPP played a big role in buoying the budgets of many nonprofits last year,” according to a new report from the Center for Effective Philanthropy, Persevering through Crisis: The State of Nonprofits.
The annual Giving USA report, released in mid-June, announced that charitable giving by corporations, foundations, individuals, and bequests hit a record high of $471.44 billion in 2020. When factoring for inflation, however, giving by individuals increased by only one percent and, as the Chronicle of Philanthropy reported, it would have been almost zero without the mega-gifts by MacKenzie Scott ($1.7 billion in July 2020 and $4.2 billion in December). Corporate giving plummeted by 7.3% last year. Moreover, as Giving USA acknowledged, charitable giving was uneven: donations to religious nonprofits were flat, fell by 4.2% for health organizations, and dropped 8.6% for arts organizations. The Charitable Giving Coalition issued a statement, commenting: “While we’re encouraged by the initial increase in giving in
2020, the sector is still not out of the woods,” and observing “Nonprofit employment remains down from 2019 levels, with 800,000 fewer jobs now than before the pandemic.”
States Allocate ARPA for Nonprofit Relief and Recovery
As states grapple with how to spend the $350 billion in American Rescue Plan Act funds, many lawmakers are beginning to allocate their share to help nonprofits. The Connecticut Legislature passed a biennial budget authorizing a substantial portion of the state’s $2.6 billion in ARPA funds to the work of charitable organizations, including $280 million in additional funding for community nonprofit providers of health and human services and more than $100 million in nonprofit programs and services for homeless service agencies, food pantries,
arts and culture organizations, and more. Louisiana Governor Edwards recently signed legislation to establish the Louisiana Small Business and Nonprofit Assistance Program spending all but $400 million of the state’s allocation of ARPA funds for 2021. The program will provide grants up to $25,000 to small businesses and eligible nonprofit organizations, including public charities and faith-based organizations, to administer aid to individuals impacted by COVID-19. In Vermont, legislators allocated $599
million in ARPA funds for significant investments in nonprofit priorities, including broadband, infrastructure, housing, and climate change mitigation.
A bill moving in North Carolina would use about $1 billion of the state’s ARPA funds to create a new Job Opportunity and Business Saving Grant Program (JOBS Program) to make automatic grants to many nonprofits that have previously received loans or grants from various federal programs under the CARES Act or state relief programs. Read the Special Report, Strengthening State and Local Economies in Partnership with Nonprofits, for more ideas for investing ARPA funds to support the work of
Taxes, Fees, PILOTs
A recurring feature highlighting efforts by governments to tax the property of tax-exempt entities.
- Property Taxes: A newly enacted rewrite of the state property tax law in Florida clarifies that exempt nonprofit property should remain tax exempt so long as the predominant use of the property is for nonprofit purposes. The revision makes clear, for the first time, that portions of property “not predominantly used for charitable, religious, scientific, or literary purposes are not exempt.”
- PILOTs: The Acting Mayor of Boston, Massachusetts announced the creation of a 2021 PILOT Task Force to “revisit and modernize” the city’s so-called “voluntary” payments in lieu of taxes (PILOTs) program. The Task Force, consisting of institutional partners, elected officials, community advocates, labor leaders, and residents, will be charged with reviewing the existing program and developing new ideas for direct benefit to residents, supporting the city’s mission and priorities, collaborations with the city, quantifiable services, and consistent and
transparent approaches. The Boston PILOT scheme has been called a model by government officials there, but is seen by most nonprofits as an extra-legal pressure tactic to force nonprofits to divert money from missions to cover government spending gaps.
- PILOTs: The Mayor of Pittsburgh, Pennsylvania has announced raising $115 million in payments in lieu of taxes from the four largest nonprofit organizations in the city. The OnePGH agreement between the city and two healthcare organizations and two universities took several years to negotiate. It will include direct payments and in-kind contributions and services for affordable housing, workforce development, infrastructure, parks, social and health services, first responders, K-12 education.
States Enact Record Number of Election-Related Laws
The news late last week that the U.S. Justice Department is challenging new voting restrictions in Georgia brings into focus the many election-related laws enacted across the country this year. According to the National Conference of State Legislatures, lawmakers in all 50 states introduced laws to alter their election systems. Of those, 38 states have enacted 220 new laws so far, with the most frequent topics being to increase or limit absentee and mail voting, ballot drop boxes, and voter identification requirements.
Arkansas (25), Texas (17), Louisiana (14), Virginia (14), Arizona (11), and Montana (11) enacted the most election-related laws. Many of the 220 new laws address narrow topics, such as a single-county issue. The controversial Georgia measure generating the Justice Department lawsuit is an omnibus law that makes several changes, including requiring voter identification to request and return absentee ballots, establishing guidelines for ballot drop boxes, and giving the State Election Board more power over county election administration. See
NCSL’s 2021 Election Enactments.
Using the Advocacy Tools You Have
We wrote it at the outset and repeat the point here: the $350 billion in Coronavirus State and Local Fiscal Recovery Funds aren’t going to spend themselves. State and local politicians need to be reminded that a) charitable nonprofits have performed above and beyond the call of duty during the pandemic, and b) charitable nonprofits are still hurting. The new Special Report from the National Council of Nonprofits provides many examples and messaging points for charitable organizations to turn the promise of the federal funds into resources that support organizational and community
recovery. In short, the Special Report is a set of tools with which nonprofits advocates can advocate.
So, what does that advocacy look like? Like anything the imagination can dream up. Here are a few recent examples.
Shortly after publication of the Special Report, the Kentucky Nonprofit Network sent out an alert to their members sharing the report’s substance and uses. For instance, the member message informed nonprofit professionals about the “nearly four dozen examples of successful programs that they can promote as models for new programs funded by these new resources.” KNN also incorporated some of the report themes in crafting its Open Letter to City and County Leaders, a resource that weaves national information with Kentucky-specific data gleaned from prior research and surveys. By issuing the
Open Letter, KNN paved the way for all nonprofits in the Commonwealth to amplify the message that governments must invest the recovery funds in charitable organizations.
This past week, the Pennsylvania Association of Nonprofit Organizations issued an Action Alert urging nonprofits to advocate for the Commonwealth to provide targeted support exclusively to nonprofits through PANO’s Targeted Relief Media Campaign. The advocacy efforts reflect frustration that, “More than a year into the COVID-19 pandemic, we still have not seen targeted support for the nonprofit sector.”
In March, Maryland Nonprofits wrote to local leaders to "encourage their support of local nonprofits and to encourage partnership with your local community foundation," and CalNonprofits reminded California's mayors, county supervisors, and city councilmembers that "[n]onprofits must be at the forefront of your investment priorities."
The Utah Nonprofits Association sent a letter to Utah’s Governor in mid-May making the case for setting aside a significant portion of the funds as grants to local nonprofits. Similarly, the Minnesota Council of Nonprofits and partner organizations sent a letter to state policymakers, and a separate letter to officials in each of the state’s 87 counties, “asking for immediate action to create a nonprofit resiliency and recovery fund, which would provide critical
investment in the nonprofit organizations delivering essential services to Minnesotans across the state.”
Finally, three Massachusetts - Boys & Girls Clubs MA Alliance, Massachusetts YMCA, and Providers’ Council – modeled the way by sending a letter to government officials urging them to use American Rescue Plan Act funds to cover the unemployment costs of reimbursing employers. The letter states, “The American Rescue Plan dollars create an opportunity for the Commonwealth to assist the nonprofits that stepped up and served during the pandemic. We ask that you utilize this funding to offset the remaining unemployment insurance costs for nonprofits.” Many states have
shown a willingness to pay off state unemployment loans from the federal government and replenish the state unemployment trust fund; the letter from the three organizations called on Massachusetts to fairly reimburse nonprofits, too.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Updates.