Nonprofits and the Stimulus Package

Unless you’ve been circling the earth on the International Space Station for the past six months, you know that President Barack Obama signed the 407-page American Recovery and Reinvestment Act (ARRA) of 2009, better known as the Stimulus Plan, into law on February 17.

We all know about the huge cost of the act – $787 billion dollars in spending (16) and tax and related provisions (7), the political wrangling before and after its passage and signing, and the large number of funding opportunities (34).

Nonprofits Need to Act Now

All stimulus funding is scheduled to expire in fiscal year 2011 – as stimulus funds are, as the name suggests, intended to be temporary, one-time injections of cash aimed at reviving the economy as quickly and efficiently as possible. The funds have been allocated to help people through the current economic meltdown and are not intended to morph into ongoing governmental assistance programs.

Specifically, ARRA has been designed to (Section 3, H. R. 1—2 of the act):

1. Preserve and create jobs and promote economic recovery.
2. Assist those most impacted by the recession.
3. Provide investments needed to increase economic efficiency by spurring technological advances in science and health.
4. Invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
5. Stabilize state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.

The act is indeed ambitious. But the very size and scope that make the Stimulus Plan so ambitious also make it hard to know exactly how we in the nonprofit sector can best use it to serve constituents. According to the National Council of Nonprofits, there are seven general areas within the Stimulus Plan that are of special interest to nonprofit organizations:

1. Arts and humanities
2. Education and internet access
3. Employment and job training
4. Energy
5. Housing and community development
6. Human and social services,
7. National service

And nonprofit organizations can tap into these funds in various ways. Some of the stimulus funds will be redistributed by federal agencies. Most, however, will first go to state and local government agencies for redistribution.

According to Michael Seltzer, at PhilanTopic, governor’s offices are at the center of the action. State legislators and/or mayors are also important allies in gaining access to Stimulus dollars, and some grants and contracts will be awarded through competitive local, state or federal processes.

Seltzer explains that others will be awarded based on existing formulas. He suggests, “First stop is your local legislator’s office. Network with peer organizations in either your own district or in other districts. And be sure to check with your local nonprofit or grantmakers association for current information.”

Overview of Provisions Beneficial to Nonprofits

For a comprehensive explanation of the ARRA provisions that are of special interest to nonprofit organizations visit the National Council of Nonprofits and read its series of special reports on the Stimulus.  Also visit:

• Independent Sector
• OMB Watch
• Coalition on Human Needs
• Center for Community Change
• Center on Budget and Policy Priorities
• Your state association of nonprofits or grantmakers

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