Nonprofit American Rescue Plan Act of 2021

Nonprofit American Rescue Plan Act of 2021 is based on INSIDE CHARITY’s direct communication with U.S. Senate & House leadership and provides an overview of how new legislation would affect charities and nonprofits. Saturday morning, March 6th, the House passed the American Rescue Plan Act, the bill to enact President Biden’s $1.9 trillion set of proposals to address the health and economic effects of the coronavirus pandemic. Senate Majority Leader Schumer (D-NY) has said he plans to pass the bill this week, if possible, giving it time to go back to the House and then to the President’s desk for signature before the unemployment benefits for 18 million individuals expire on March 14.

Nonprofit American Rescue Plan Act of 2021

The nearly 800-page bill would allow nonprofits to participate in a new loan program and draw from a $3 billion economic development fund, according to a summary document of the plan. It also contains multiple measures that relieve the stress on nonprofits and foundations to provide aid to Americans in need of food, housing, and other necessities. Grants from the economic development fund could be used for “initiatives that support bottom-up economic development and enable good-paying jobs.” The plan says that “nonprofits, tribal institutions, institutions of higher education” would be eligible to draw on the $3 billion fund. The Biden plan also would use $35 billion in government funds for a nonprofit lending program that nonprofits can participate in, to “generate as much as $175 billion in low-interest loans to provide the essential goods and services that communities depend on.” Here’s some more details:

Economic Development Administration (EDA) Allocation – $3 billion would be allocated to the Economic Development Administration (EDA). This allocation would be used for grants to nonprofits, and other initiatives that support. This American Rescue Plan EDA allocation is twice as much as provided by the CARES Act.

Nonprofit & Small Business Financing Programs – $35 billion would be available to nonprofits for small business financing programs.

Higher Education Emergency Relief Fund – Public institutions would receive a $35 billion increase through The Higher Education Emergency Relief Fund, which would provide an additional $1,700 in financial assistance.

Relieving Burden on Nonprofits – The plan also includes $350 billion in emergency funding for state and local governments. Nonprofit advocates say those funds are crucial because they would prevent cash-starved states and local governments from delaying or cutting payments to charities that have service contracts with them.

Government Benefit Programs would be expanded and extended, reaching a wider audience of individuals served by nonprofits. A 15% increase in SNAP benefits would be extended through September and $3 billion would be available to increase enrollment for the Special Supplemental Nutrition Program for WIC participants. Additionally, a $35 billion emergency stabilization fund would cover costs of childcare providers that are in danger of closing, as well as a $1 billion increase for states to cover the additional cash assistance that TANF recipients needed because of the pandemic.

Now Is the Best Time to Apply for a PPP Loan

As of today, the Small Business Administration and Paycheck Protection Program lenders are processing loan applications ONLY from nonprofits and for-profit businesses with fewer than 20 employees. This exclusive small-employer PPP processing window is designed to provide more equitable relief by “targeting the PPP to the smallest businesses and those that have been left behind in previous relief efforts” to ensure that lenders give smaller employers the attention they need to work their way through the application process. If you think your nonprofit may be eligible for an initial PPP loan or a second draw loan that Congress authorized at the end of 2020, now is the best time to contact a lender and find out how much relief may be available. Learn more at SBA.gov.

Beyond the American Rescue Plan Act

Even as Senators are finalizing the text of their version of the American Rescue Plan Act for floor action this week, they are looking ahead to the next major legislative push: a large infrastructure bill to fulfill President’s “Build Back Better” agenda. While important provisions like broadband expansion are already on the to-do list for that bill, nonprofit advocates are working to ensure additional relief for charitable organizations is also included. This infrastructure bill could also be the vehicle to make any legislative improvements to the unemployment and forgivable loan programs discussed at the outset of this newsletter.

This week, Senator Klobuchar (D-MN) is expected to introduce an updated version of her WORK NOW Act (S. 3747 in the last Congress) that would create a grant program at the local, state, and federal levels to help nonprofits employ more people to advance their missions in communities. A bipartisan group of Senators led by Senator Lankford (R-OK) is promoting support for a bill they will reintroduce that will seek to expand the universal charitable deduction, a very high priority for the nonprofit community.

Nonprofit American Rescue Plan Act of 2021 was first posted at INSIDE CHARITY

For more articles like Nonprofit American Rescue Plan Act of 2021 VISIT HERE

Nonprofit American Rescue Plan Act of 2021 and other INSIDE CHARITY content and comments are for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on this site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.