The Stimulus Package in a Nutshell
The ARRA, more commonly known as the "stimulus package," provides new spending and tax cuts totaling $787.2 billion. It's the largest single appropriation bill in U.S. history. It aims to:
- Preserve and create jobs and promote economic recovery
- Assist those most impacted by the recession
- Provide investments needed to increase economic efficiency by spurring technological advances in science and health
- Invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits
- Stabilize state and local government budgets in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases
Stimulus monies are designated as temporary, one-time funding. Recipients are encouraged to see the money as helping them through the recession and not as an ongoing governmental assistance program. (However, many predict that Congress will find it difficult to rescind some of the assistance — particularly for programs like Medicaid and special education.) All stimulus money is scheduled to expire in fiscal year 2011.
Funding Available to Nonprofits
From our review of ARRA, we found that many of the Act’s funding components will be available to nonprofits. Major categories of eligible programs that have strong nonprofit applicability include:
- Arts and humanities
- Education and Internet access
- Employment and job training
- Energy
- Housing and community development
- Human and social services
- National service
In addition to providing direct funding for nonprofit organizations, ARRA contains many provisions to help individuals and families who are served by nonprofits. Examples include unemployment compensation, supplemental nutrition assistance (food stamps), and Medicaid.
How the Money Will Be Distributed
Some of the stimulus funds will be redistributed by federal agencies. Most, however, will first go to state and local government agencies for redistribution to governmental, business, and nonprofit entities in their jurisdictions.
Some money will be distributed according to existing formulas and contracts. In other cases, qualifying applicants must apply through a competitive grants process. In some instances, the receiving agency is placing limits on who can apply. For example, the National Endowment for the Arts (NEA) has reportedly said that it will only consider requests from arts organizations that already have received an NEA grant.
Act Now!
Federal legislation calls for quick distribution of the stimulus money. Unless nonprofits act quickly, these one-time funds will go to entities better able to use the resources right away. And, as mentioned earlier, all stimulus money is scheduled to expire in fiscal year 2011. To help you act fast, see the websites listed below.
Other Legislation
Congress and some state legislatures are enacting additional laws that can benefit nonprofits and the people they serve. For instance, on March 11, President Obama signed legislation related to the normal federal budgeting process. The omnibus spending bill appropriated another $410 billion, this time directed at traditional federal spending programs. The bill also contains some 8,500 earmarks, totaling more than $7 billion, many of which will benefit individual nonprofits.
Within the next few months, Congress is also expected to pass targeted budget bills which include funding for affordable housing, energy, and natural resource protection.
In today's economy, we need to remember that Americans have always stepped up to help each other. Those of us who work in nonprofits really are doing the work that makes a difference in our communities. As the year progresses, Fieldstone Alliance will continue to publish updates and helpful information on legislation that can help you sustain your organization and your community. You can view a list of helpful websites here.
About Tom Triplett
Tom specializes in helping nonprofits develop financial strategies for long-term sustainability. He helps organizations evaluate potential revenue sources that fit their unique situations, mission, and values. He also guides nonprofits to sustainable financing as major funding ends. He also knows about government finance and legislation, having been commissioner of three different Minnesota state agencies: Finance, Revenue, and Planning. Tom can be reached at ttriplett@fieldstonealliance.org or at 651.556.4504.
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