Governments at all levels took action in response to the coronavirus pandemic beginning in spring 2020. Nonprofits across the country quickly provided resources and partnered with governments and officials dedicated to responding to the crisis.
Congress provided federal funding for state, territorial, local, and Tribal governments that were to “cover costs that are necessary expenditures incurred” due to COVID-19.
State governments responded by partnering with nonprofits, adjusting government grants and contracts, providing unemployment insurance, and allocating funding.
Families First Coronavirus Response Act (FFCRA)
The Families First Coronavirus Response Act, enacted March 19, 2020, included a complex set of temporary paid leave mandates and employer reimbursement provisions, as well as funding for free coronavirus testing, food nutrition security, and Unemployment extension.
- What the Families First Coronavirus Response Act Means to Nonprofits, National Council of Nonprofits, March 2020.
Coronavirus Aid, Relief, and Economic Securities (CARES) Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted March 27, 2020, appropriated $2 trillion intended to act as an economic stimulus and provide immediate relief for individuals, nonprofits, businesses, and state and local governments.
The CARES Act included key provisions to fund governments, businesses, and nonprofits, including the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), $150 billion for a Coronavirus Relief Fund (CRF), an above-the-line deduction (universal or non-itemizer deduction) for charitable contributions, an Employee Retention Payroll Tax Credit (ERTC), and Economic Stabilization Fund.
- CARES Act: What’s in the Bill for Nonprofits Analysis, National Council of Nonprofits, March 2020.
- Section-by-Section Summary of the CARES Act, U.S. Senate, March 2020.
Consolidated Appropriations Act, 2021 – COVID Relief Bill
At the end of 2020, Congress passed an omnibus spending bill that included COVID relief measures affecting nonprofits including charitable giving incentives and relief for reimbursing employers and reforms to the Coronavirus Relief Fund, Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and Employee Retention Tax Credit (ERTC).
- Nonprofit Provisions in COVID Relief Legislation, National Council of Nonprofits, December 2020.
- What’s in the New COVID Relief Law for Nonprofits? (1:17:07) and slides, National Council of Nonprofits, Jan. 13, 2021.
American Rescue Plan Act (ARPA)
The American Rescue Plan Act (ARPA), signed into law on March 11, 2021, provided one of the largest economic relief programs in U.S. history. The law included many updates to COVID relief programs affecting nonprofits, including the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and Employee Retention Tax Credit (ERTC) as well as provisions affecting unemployment insurance, paid leave, individual and family tax credits, nutrition, health, education, and more.
Most importantly to nonprofits, under the American Rescue Plan Act, Congress allocated $350 billion in in Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) 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). CSLFRF funds are allocated separately to states, to counties, to metropolitan cities, and non-entitlement areas.
- Special Report: Strengthening State and Local Economies in Partnership with Nonprofits: Principles, Recommendations, and Models for Investing Coronavirus State and Local Fiscal Recovery Funds, National Council of Nonprofits, Updated April 2022.
- The American Rescue Plan Act: Analysis of Key Provisions Affecting Nonprofits and the People They Serve, National Council of Nonprofits, Mar. 12, 2021.
- Principles for Allocating ARPA State and Local Fiscal Recovery Funds, National Council of Nonprofits
Fifteen state associations hosted town halls with more than 38 Members of Congress as well as six governors and dozens of state legislators and officials to advocate for nonprofit resources and finances to help respond to the pandemic. Letters were sent on behalf of state associations and nonprofit partners to 23 governors as well as state legislative leaders and government officials.
- State and Local Funds | American Rescue Plan Funds, National Council of Nonprofits
State Association Coronavirus Policy Resource Pages
Many state associations of nonprofits have state-specific coronavirus policy resource pages. Please check your state association website for more information.
- State Action on Coronavirus (COVID-19), National Conference of State Legislatures.
- COVID-19 Policy Dashboard, Multistate.
- The Economic Impact of NYC’s Nonprofit Sector with NYC Comptroller Scott Stringer (50:54), Nonprofit New York, Oct. 6, 2020
- Unemployment Insurance, National Council of Nonprofits
- Don’t Let Senseless Unemployment Policies Sink Nonprofits—Act Now!, Nonprofit Quarterly, May 8, 2020.
Separate state and local funds have been created through state appropriations and private philanthropy and donations, as well as community foundations. Some nonprofits have successfully advocated to be eligible recipients of fund grants and loans from public funds.