Nonprofit American Rescue Act Stimulus Bill 2021

Nonprofit American Rescue Act Stimulus Bill 2021 takes a broader view of the different ways nonprofits benefit regardless of one’s political view. President Biden signed the $1.9-trillion coronavirus relief package into law and includes billions for nonprofits and public service. The $1.9 trillion American Rescue Plan Act, authorizes federal spending for much needed economic relief and poverty alleviation. There are a number of provisions directly impacting nonprofits, thanks in large part to the efforts of many nonprofits, including Independent Sector and the National Council of Nonprofits.

The third federal relief package since the pandemic was declared a year ago, the American Rescue Plan Act includes billions in support for state and local governments and expanded eligibility for the Payroll Protection Program (PPP). Independent Sector highlights some provisions relevant to the nonprofit sector here.

Nonprofit American Rescue Act Stimulus Bill 2021

Among the provisions that should be good news for nonprofits is $350 billion in support of state and local governments. “Our partners need to be funded,” said David L. Thompson, vice president of public policy at the National Council of Nonprofits. When governments run out of money, they tend to turn on nonprofits, either to impose work burdens or taxes, he said. “Nonprofits benefitted from moderate concerns about state and local funds because they added guardrails,” Thompson said, as funds can not be used to cover pension plans, deficits or tax cuts.

Faced with a billion-dollar budget shortfall amid the pandemic last summer, New York State delayed payments and held off new contracts with nonprofit service providers as the state seeks relief from the federal government.

Unemployment insurance can be dull but if nonprofits are having to divert $1 million to pay their unemployment bill, it gets attention, Thompson said. The bill extends to Sept. 6 the subsidy for costs incurred by employers, including nonprofits, that provide unemployment benefits on a reimbursable basis versus tax contributions. The subsidy also would increase from 50% to 75% for weeks beginning after March 31. Nonprofits had sought 100% reimbursement.

Credits for paid sick and family leave that were to expire this month under the Fist Coronavirus Response Act would be extended through September. The Employee Retention Tax Credit would be extended through the end of the year.

Nonprofits with more than 500 employees were previously excluded from PPP funding in the December coronavirus stimulus bill. The change will benefit nonprofits, Thompson, pointing to an example of the New York City YMCA, which has 1,600 employees in 22 locations but no one location has more than 500 employees. “You can understand if each of the 22 locations was a freestanding, unrelated Y,” he said, crediting Senate Majority Leader Chuck Schumer (D-N.Y.) with pushing to expand the size eligibility and Sen. Ben Cardin (D-Md.), chairman Senate Committee on Small Business and Entrepreneurship. In rural areas, some nonprofits cover an entire state from one location, Thompson said.

The December stimulus added 501(c)(6) associations as PPP eligible. This latest stimulus would make charities eligible if they employ up to 500 people per physical location and adds another $7.25 billion in funding, bringing the total available to $813 billion.

Key Resources for Nonprofits

Summary of the American Rescue Plan Act of 2021 (Independent Sector)

The Center on Poverty and Social Policy at Columbia University estimates that the stimulus bill will reduce child poverty by nearly half, and nonprofit advocates say that will reduce demand on overburdened charities. (Chronicle of Philanthropy)

Some 27 million children — including roughly half of all Black and Latino children and a similar share of rural children — received less than the maximum $2,000-per-child tax credit under prior law because their parents earn too little, even as middle- and higher-income families received the full amount. The Act makes the full Child Tax Credit available to children in families with low earnings or that lack earnings in a year, and it increases the credit’s maximum amount to $3,000 per child and $3,600 for children under age 6. It also extends the credit to 17-year-olds. The increase in the maximum amount begins to phase out for heads of households making $112,500 and married couples making $150,000. These changes will lift 4.1 million children above the poverty line — cutting the number of children in poverty by more than 40 percent. They also will lift 1.1 million children above half the poverty line (referred to as “deep poverty”). Black and Latino children in particular, whom the credit disproportionately left out or left behind, will benefit. (CBPP)

Millions of Americans who were set to lose unemployment benefits in a matter of days now will received continued, enhanced federal payments of an extra $300 each week until early September. Many workers who collect unemployment also are set to receive a tax break on those benefits. (Washington Post)

The American Rescue Plan Act provides additional relief for the nation’s small businesses [and nonprofits] and hard-hit industries for programs the SBA is currently administering and adds new efforts, including:
* $7.25 billion additional for the Paycheck Protection Program, including to expand eligibility to additional nonprofits and digital news services
* Additional funds are allocated for the Shuttered Venue Operators Grant program, and now allows businesses to apply for both a PPP loan after Dec. 27, 2020, and the SVOG
* $15 billion additional for Targeted Economic Injury Disaster Loan Advance (EIDL) payments, including NEW $5 billion for Supplemental Targeted EIDL Advance payments for those hardest hit
* NEW: $28.6 billion for the Restaurant Revitalization Fund for industry-focused grants
* NEW: $100 million to establish a Community Navigator pilot program; grants will go to eligible organizations supporting efforts to improve access to COVID–19 pandemic assistance programs and resources.  (U.S. SBA)

The aid included in the American Rescue Plan Act — the third round of housing relief approved in a year — is intended to support the tens of millions of people who are unable to pay for their housing or utilities because of the pandemic. The plan includes $27 billion in rent relief, $10 billion in mortgage payment relief and $5 billion to address homelessness. (CNN)

The law also includes an additional $1 billion for AmeriCorps and its many programs, which will support the agency’s ongoing efforts to bolster community response efforts to the pandemic, while building a new path forward. … With programs, people and promise in more than 40,000 locations across the country, AmeriCorps is uniquely positioned to bolster community response efforts. … In urban and rural communities alike, AmeriCorps is supporting critical services like contact tracing, case investigation efforts, testing sites, community outreach, and vaccine distribution centers. They’ve also provided the extra manpower to overstretched food banks and are a crucial component of student success programs. (AmeriCorps)

The $1.9 trillion American Rescue Plan Act, signed by President Joe Biden on Thursday, provides students with immediate and long-lasting financial benefits, including:
* Relief checks, even for dependent students.
* Emergency financial aid grants from their schools.
* Child tax credits for students who have children.

The new law creates the Emergency Connectivity Fund, providing $7.171 billion to reimburse schools and libraries for providing free broadband service (and connected devices) to students and patrons at their homes. (Benton Institute for Broadband & Society)

Nonprofit American Rescue Act Stimulus Bill 2021 was first posted at INSIDE CHARITY

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