The American Rescue Plan Act and Nonprofits

The $1.9 trillion American Rescue Plan Act, signed into law by President Biden on March 11, 2021, authorizes federal spending for much needed economic relief and poverty alleviation. The most discussed provision in the Act may be the round of (up to) $1,400 stimulus payments to most Americans. But 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.

Key Resources for Nonprofits

The American Rescue Plan Act: Analysis of Key Provisions Affecting Nonprofits and the People They Serve (National Council of 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. (ABC12 News)

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)

Additional Resources

American Rescue Plan Act passes with many tax components (Journal of Accountancy)