American Rescue Plan Provides Relief to Nonprofits

On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021 (American Rescue Plan) into law. Because of the widespread and persistent advocacy of nonprofits (thank you!), it includes many important provisions that directly affect nonprofits and the communities they serve. Here are a few highlights.


Paycheck Protection Program Loan Programs

The American Rescue Plan allows many larger nonprofits to apply for Paycheck Protection Program (PPP) loans for the first time by extending eligibility to nonprofits with more than 500 employees that operate at multiple locations as long as no more than 500 employees work at any one location.

It also allows performing arts nonprofits to apply for both the Shuttered Venue Operators Grant and the PPP with limits on the total amounts they can receive from the two programs.


Federal Unemployment Coverage

The American Rescue Plan extends various federal benefits for unemployed workers – including coverage for self-employed workers and staff of religious and very small nonprofits and $300 per week supplemental federal payments – through September 6, 2021.

Notably for nonprofits, the federal government will cover 75% of the unemployment costs of reimbursing nonprofits from April 1 through September 6; currently, the federal government is only covering 50% of these costs, and the state of North Carolina is covering the other 50%. (Center members that are interested in becoming reimbursing employers have access to partner programs with First Nonprofit that help manage unemployment insurance plans and reduce expenses.)


Tax Relief for Employers

The American Rescue Plan extends the tax credit for nonprofits and other employers that offer paid sick leave and paid family and medical leave through September 30, 2021.

The new law allows employers to receive a PPP loan and claim the Employee Retention Tax Credit and extends the deadline through December 31, 2021.


Additional Federal Funding for Nonprofit Programs

The American Rescue Plan provides additional funding for child care providers, the Corporation for National and Community Service, arts and humanities organizations, food assistance, housing and homelessness prevention, and nonprofits providing services to survivors of domestic violence and sexual assault.


Additional Funding for State and Local Governments

The American Rescue Plan allots $340 billion in additional funds for government programs. More than $5 billion of this aid will go to the state of North Carolina, and more than $3 billion will go to local governments throughout the state. This support could help ease financial pressures on cities and counties throughout North Carolina and provide additional support to state legislators to invest in nonprofits providing COVID relief.


Funding for COVID-19 Vaccines, Treatment, Testing and Other Public Health Programs

The added investment in these public health measures should significantly reduce the spread of COVID-19.


The National Council of Nonprofits’ analysis provides additional guidance and deadlines that can help nonprofits take full advantage of the American Rescue Plan.