Federal Economic Recovery Funds & Grant Opportunities for Nonprofits

Federal economic recovery packages like the American Rescue Plan can create a wealth of new grant seeking opportunities for nonprofits.

[Updated May 2022]

Federal economic recovery and investment packages have been a buzzing topic of public discourse since the onset of the COVID-19 pandemic and its far-reaching impacts.

Through large (and often quite complex) pieces of legislation, Washington has issued funding for federal, state, and local projects covering a wide range of areas. In many cases, this means that governments will issue grants and contracts to eligible organizations within their jurisdictions.

What do recent federal economic recovery funds mean for your nonprofit? Are there new opportunities to receive funding to support your organization's work?

In this guide, we'll review the recent federal packages of economic recovery and investment funding and the types of grant opportunities they're creating for nonprofits.

Infrastructure Investment and Jobs Act: Takeaways for Nonprofits

Federal and state grant opportunities through the Infrastructure Investment and Jobs Act

The Infrastructure Investment and Jobs Act, commonly known as the Infrastructure Act, became law on November 15, 2021. This $1.2 trillion infrastructure package is designed to provide funding for federal, state, and local projects related to infrastructure construction, improvement, and repair. 

The bill covers projects related to:

  • Roads, highways, railroads, and bridges
  • Water and energy systems
  • Broadband internet networks
  • Transportation safety and efficiency
  • Energy efficiency and green technology investment

How Infrastructure Funding will be Allocated

Infrastructure funding will be invested and disbursed over the next eight years. Of the $1.2 trillion, roughly $840 billion will be earmarked specifically for surface transportation and water infrastructure improvements. The federal government will retain at least $120 billion to spend on projects and to fund competitive grant programs. 

The remaining $550 billion will be directed toward new investments in a wide range of areas at the state level, including broadband access, cybersecurity, disaster response, environmental and energy resiliency, and transportation. The National Conference of State Legislatures has compiled a complete breakdown of how infrastructure funding will be distributed to state governments for various purposes. 

Nearly 80% of the Infrastructure Act's funding is slated for grants through the federal and state governments, some of which will be directly issued to grant seekers. Much of the funding distributed to states will be reissued through project contracts.

Key Takeaways for Nonprofits

  • The distribution of infrastructure funding for state agencies is active. Projects and grant programs have been started and will continue to be developed and launched in the coming years.
  • Most of the bill's funding is being distributed directly to state governments, which will then apportion it toward specific types of infrastructure projects through grants, contracts, and direct spending.
  • This potentially opens up a diverse array of grant opportunities for nonprofits that work in relevant fields depending on how state governments choose to apportion funding.

Particularly Relevant Grant Opportunities

  • Nonprofits may see new state and federal grant opportunities related to:

    • Water decontamination and system upgrades, especially for small and disadvantaged communities
    • School bus efficiency upgrades, with a priority given to low-income, rural, and Tribal school districts
    • Improving and expanding broadband internet infrastructure in underserved areas
    • Pedestrian safety, walkability, and alternative transportation initiatives, particularly for schools
  • Parts of the Act emphasize engaging small businesses, improving underserved communities, and reauthorizing the Minority Business Development Agency.
  • The Act also directs funding specifically toward energy-efficient building upgrades, which are expected to be made available to all 501(c)(3) nonprofits regardless of their mission.

Should Your Nonprofit Go for a Government Grant?

Is your nonprofit ready to pursue federal grant opportunities? Use the following criteria to audit your organization’s readiness to compete.

The American Rescue Plan Act: Takeaways for Nonprofits

Federal and state grant opportunities through the American Rescue Plan Act

The American Rescue Plan Act (ARPA) became law on March 11, 2021. This $1.9 trillion package of grants, lending, and investment programs was designed to provide emergency relief to states, local governments, and businesses amid the COVID-19 pandemic and its economic impacts.  

Early ARPA funds have already been allocated, but funding given to state and local governments is still actively being distributed to fund a wide variety of public projects and grant programs. Distributions of a new tranche of funding are expected in May 2022.

ARPA funding is intended to support four key goals:

Responding to the public health emergency.

This includes COVID-19 response, prevention, testing, and vaccination programs. The funding can cover COVID-related expenses incurred by public hospitals, group and long-term living facilities, nursing facilities, incarceration settings, and homeless shelters.

Paying government essential workers.

ARPA funding offers extra support for eligible government employees who served essential roles during the COVID-19 pandemic.

Replacing lost local government revenue.

Local governments are able to calculate their lost revenue through a government-provided formula. ARPA funding can then be disbursed to make up for any losses and ensure government services can continue uninterrupted.

Making infrastructure improvements.

ARPA funding can be used by state and local governments to make improvements involving drinking water quality, sewer upgrades, and broadband expansion. 

$350 billion of ARPA funding will ultimately be dispersed to states, counties, and large cities in the U.S. This money will be used to reimburse public entities for approved costs and to make direct disbursements to community members and eligible organizations.

ARPA dollars can be earmarked for costs incurred up until December 31, 2024. They must then be disbursed by state and local governments and other agencies no later than the end of 2026. Any funds not allocated by the end of 2024 must be returned to the federal government.

Key Takeaways for Nonprofits

  • The key federal programs that provided direct funding for eligible nonprofits, including the Paycheck Protection Program (PPP), Shuttered Venue Operators Grants (SVOG), and Economic Injury Disaster Loans programs, are no longer accepting new applications.
  • Remaining ARPA funding is being distributed through the packages of aid that were provided to state, local, and Tribal governments.
  • Many, but not all, state and local governments are making grants using ARPA funding. At the state level, this is generally through new or expanded grant programs within existing agencies. Some counties and localities are distributing funding through formal processes, while others are simply allocating the funding through legislators, commissioners, or council members.
  • The best way to learn more about ARPA funding for your organization is to check with state agencies or your local government. Your state or local association of nonprofits may also be monitoring and identifying ARPA opportunities in 2022 and beyond.

Crisis Grant Seeking Webinar Series

The Grants Plus team has presented a series of webinars on all aspects of emergency grant seeking. Click below to view our archive of rich, informative webinar recordings, where you will gain access to techniques and tips for proactively finding and pursuing grants for your nonprofit organization during and beyond crisis. 

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