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)  nonprofits have performed above and beyond the call of duty during the pandemic, and b) nonprofits are still hurting and need funding for business infrastructure as well as service delivery c) nonprofits deliver the essential services government agencies are mandated to provide.

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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.

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 charitable nonprofits.


The new Special Report from the National Council of Nonprofits provides many examples and messaging points for nonprofits 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.

With Special Thanks to The National Council of Nonprofits


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