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Philanthropy Politics

Direct Help for Nonprofits Thin in Biden Plan

President-Elect Joe Biden has unveiled his American Rescue Plan, a $1.9-trillion stimulus package to boost the economy and get past the coronavirus.

The summary of the plan runs 19 pages but is thin on details for nonprofits, according to David L. Thompson, vice president of public policy at the National Council of Nonprofits in Washington, D.C. Nonprofits are expressly included in a $35-billion loan fund and a $3-billion economic development grant program.

The president-elect’s plan would allocate $3 billion to the Economic Development Administration (EDA)—twice as much as provided by the CARES Act—for grants to provide resources directly to state and local government entities, institutions of higher learning and nonprofits, to fund initiatives that support “bottom’s up economic development and enable good-paying jobs.”

There’s also $35 billion available to nonprofits and others for small business financing programs, which the president-elect said would generate as much as $175 billion in low-interest loans and venture capital.

Nonprofits support the proposal to provide $350 billion in state and local aid because “governments have been wracked by the pandemic and governments that run out of money impose draconian cuts on programs that are typically performed by nonprofits pursuant to written agreements,” Thompson said. For example, New York State has cut payments to nonprofits by 20 percent with a promise to pay its bills when it receives federal aid, he said. Nonprofits such as legal aid organizations could face potential staff reductions and layoffs if state contracts or funding do not materialize.

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Many of the items in the proposal, including $1,400 per-person payments for individuals, housing, and food support, are important to the missions of various nonprofits, Thompson said.

A 15-percent increase in Supplemental Nutrition Assistance Program (SNAP) benefit would be extended through September and $3 billion would be available to increase enrollment in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). A $25-billion emergency stabilization fund would cover costs of child care providers that are in danger of closing.

Biden also is calling for an additional $1 billion for states to cover the additional cash assistance that Temporary Assistance to Needy Families (TANF) recipients needed as a result of the pandemic.

The Higher Education Emergency Relief Fund would provide $35 billion to public institutions, providing students an additional $1,700 in financial assistance.

Also important to nonprofits is unemployment insurance relief for self-insured or reimbursing employers. The National Council has sought to increase unemployment relief for self-insured or reimbursing employers to cover 100 percent of the cost. The Omnibus Appropriations and Emergency Coronavirus Relief Act, passed by the last Congress in December, extended federal coverage of the costs of self-insurance “reimbursable” employers to March 14. “Will they continue the 50-percent coverage through September and or will they increase that coverage to 100 percent as we are seeking,” Thompson said.

This article originally appeared in The NonProfit Times.  It is reprinted with permission.

Mark Hrywna

Senior Editor, NonProfit Times. Journalist currently covering various aspects of the nonprofit sector, including fundraising, finance, technology and more for The NonProfit Times, a national trade publication.