Nonprofits and State & Local Fiscal Recovery Funds

As we all know, individual giving is not the sole, or even the primary, source of funding for the nonprofit sector. Last year, there was a significant new funding source: the Paycheck Protection Program (PPP), which offered forgivable loans to businesses and – thanks to a lot of intense advocacy last year – nonprofits, too. Many nonprofits described this unexpected and sizable funding as a “lifeline” for their survival, which is certainly worthy of celebrating.

The PPP is now closed, removing a significant source of relief before we’ve fully recovered. That is why the $350 billion in funding provided to state, local, Tribal, and territorial governments through the American Rescue Plan Act is so important to nonprofits. Thanks again to advocacy by many nonprofits, state and local governments can spend some of their allocations both to pay nonprofits to deliver services and to help nonprofits recover from COVID-19 and its economic aftermath. But those funds are now suddenly at risk, as some on Capitol Hill want to reclaim that money to pay for the infrastructure bill or other priorities. Last week, the National Council of Nonprofits sent a letter to Congressional leadership calling on them to protect the funds for their original use. We encourage you to reach out to your Representative and Senators to share this letter and your own perspective on why those funds must be preserved for their intended use.

Yesterday, we rolled out a new Special Report you can use: Strengthening State and Local Economies in Partnership with Nonprofits: Principles, Recommendations, and Models for Investing Coronavirus State and Local Fiscal Recovery Funds. In addition to showing how much money is allocated to flow into governments in your state, this new resource contains principles and recommendations that can be shared with state and local officials on the importance of working with nonprofits to restore local economies. It also shares more than three dozen examples of current and recent programs being used across the country to provide funding for nonprofits to serve local communities. Take a look and see how the principles, recommendations, and models can be applied within your own communities. Share the report with your elected officials to build relationships and partnerships between the sectors.

This article published today by Nonprofit Quarterly, “Nonprofits Must Speak Up Now to Protect COVID-19 Recovery Funds,” ties the federal advocacy needed to protect these funds together with the state and local advocacy needed to ensure funds are invested in nonprofit missions.  As the authors of the article conclude, “When we all work together, we all win.” Let’s work together to continue the economic recovery of our organizations and our communities.