The American Rescue Plan Act
March 15, 2021
Additional COVID Relief has been critical to nonprofits across the U.S. and here in Washington State. On March 11, 2021, President Biden signed in law the American Rescue Plan Act, enacting $1.9 trillion to assist in combating and recovering from the COVID-19 pandemic.
Nonprofits are on the frontlines of combatting this pandemic and they will be vital to our recovery. Below are some of the key provisions as they apply to nonprofits in Washington State.
American Rescue Plan Act Overview
Independent Sector Analysis
What the American Rescue Plan Act Means for Nonprofits
National Council of Nonprofits Analysis
What the American Rescue Plan Act Means for Nonprofits in Washington
Paycheck Protection Plan (PPP) Loans and Other Assistance to Businesses and Nonprofits
PPP loans have been an essential part of supporting nonprofits during the pandemic. The American Rescue Plan Act adds more funding for PPP loans and expands eligibility to nonprofits with over 500 staff. It also expands eligibility to more types of nonprofits beyond 501c3 organizations.
Shuttered Venue Operator Grants (SVOG) will be expanded, and eligible organizations can now apply for both PPP and SVOG funding (but PPP loan amount will be subtracted from any SVOG grant received). EIDL loans and the Employee Retention Tax Credit will also be expanded and extended.
Direct Aid to States
Nonprofits are important partners to government at all levels to accomplish public purposes as diverse as childcare, affordable housing, emergency services, health, education, and economic development. Some of this funding will be passed down to nonprofits via government contracts, which make up 32% of nonprofit revenue overall.
In addition, we will advocate strongly that nonprofits must receive their fair share of relief grants along with small businesses, since nonprofits are major employers as well as contributors to their local community health and vitality.
Unemployment Insurance for Self-Insured Nonprofits
While most nonprofits pay into the state system for unemployment insurance, many larger nonprofits in Washington are self-insured. These include YMCAs and Boys & Girls Clubs, major arts and cultural institutions, and universities. This is a system that has served them well for decades, but the unique circumstances of the pandemic have introduced a massive increase in costs to nonprofits who are self-insured. Like state unemployment systems, nonprofits need relief from unprecedented levels of unemployment claims.
The CARES Act provided for 50% reimbursement for self-insured nonprofits, but this still left many of our nonprofits and cultural institutions with unsustainable bills. The American Rescue Plan Act increases the federal reimbursement rate for self-insured nonprofits from 50% to 75% from April 1 – September 6, 2021. This increase in reimbursement, which was championed by Washington State Representative Suzan DelBene, will be critical to many of our self-insured nonprofits continuing to provide for our communities.
Investment in Nonprofit Priorities
The ARPA includes significant investments in areas often addressed by nonprofits: childcare, healthcare, education, childcare, arts and culture, national service and housing. This funding will benefit many nonprofits who are able to compete for and manage federal funding. The ARPA’s investments in stimulus payments and anti-poverty programs will also relieve demand in nonprofits serving people in need.
This is a far-reaching law that we will all be learning more about in the coming weeks and months. Please read the analysis we link to above from our partners to learn more details, and stay engaged to help influence how this enormous investment will roll out to our communities.