Regulatory and Industry News Alerts from Armanino

Is American Rescue Plan Act Funding a Fit for Your Nonprofit?

by Matt Petroski
January 21, 2022

Are you a nonprofit curious to know if you could receive American Rescue Plan Act (ARPA) funds to help support the community you serve? The ARPA program, under the framework of the Coronavirus State and Local Fiscal Recovery Funds, provides $350 billion in emergency funding for state, local, territorial and tribal governments.

ARPA expenditure guidelines are more flexible than guidelines were under the CARES Act. This creates a unique opportunity for nonprofits to partner with local government to achieve mutual goals.

Review the basics on ARPA funding below to get a sense of whether this effort may be a good fit for your organization.

Who Gets the Funds?

  • States and District of Columbia
  • Counties
  • Metropolitan cities
  • Tribal governments
  • Territories
  • Non-entitlement units of local government

How Can the Funds Be Used?

  • Supporting public health expenditures
  • Replacing lost revenue from the pandemic that would have been used to provide government services
  • Supporting the communities and populations disproportionately impacted by the COVID-19 crisis
  • Support for households, small businesses and impacted industries and workers
  • Investing in water, sewer and broadband infrastructure

What Is the Timeline for Spending and Receiving Funds?

  • Most government entities should have received 50% of their funding around July 2021, with the remainder to be paid out 12 months later.
  • Funds do not have to be committed until December 31, 2024, which gives governments plenty of time to think through the best way to spend their funds.
  • Any funds not used by December 31, 2026, must be returned.

How Some Governments Are Already Spending Their ARPA Funding

  • Connecticut offered $280 million to health and human services, and $100 million more to homeless services, food banks and arts and culture organizations.
  • Louisiana used a portion of its funding to establish the Louisiana Small Business and Nonprofit Assistance Program.
  • Many states, including Colorado, Washington and Florida, set aside ARPA funds to address homelessness.

How Nonprofits Can Help in the Deployment of Recovery Funds

  • Nonprofits and governments serve the same people in their communities, making them natural partners.
  • Nonprofits have a deep understanding of community needs and meaningful relationships with those they serve, particularly among underserved populations. Government can work within existing systems and programs to distribute funds where they are most needed instead of trying to reinvent the wheel, using up precious resources. For example, there are likely existing nonprofits in each community that offer after-school programs, housing assistance, mental health services, legal aid and more. These nonprofits are perfectly situated to deploy funds quickly and efficiently throughout the community.
  • Nonprofits are used to measuring and reporting on their impact on the community for donors and board members and can be of great assistance to government partners in meeting the compliance requirements of the ARPA.
  • To identify what partnership opportunities might be available, reach out directly to your local government officials to discuss their strategy and timeline.

To better understand the programs created by ARPA and how your organization might leverage them, contact our experts.

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