Beneficiary Breakdown: Nonprofits

Funding is available to local governments to support the economic recovery of nonprofits in their communities. The State and Local Funds Fiscal Recovery Funds (SLFRF) was designed to help the United States recover from the widespread impacts of the COVID-19 pandemic through federal grants to subsidiary governments. One of the eligible uses of funds is to support nonprofits who are recovering from the impacts of the pandemic, who might have lost revenue or experienced changing operational costs, which threaten their ability to thrive. Local governments can apply for SLFRF funding for individual impacted nonprofits in their communities or class(es) thereof.  

Local governments can identify eligible nonprofits by organizations who meet the legal definition of a “nonprofit,” thus an organization holding the tax-exempt 501(c)(3) status or 501(c)(19) status. A nonprofit or class of nonprofits would only be eligible for SLFRF funding if it were impacted by the pandemic. To be recognized as an “impacted nonprofit” according to SLFRF guidelines, organizations should be able to exhibit symptoms including any of the following: 

  • Decreased revenue (i.e., from donations and fees) 
  • Financial insecurity 
  • Increased costs 
  • Decreased capacity to weather financial hardship 
  • Challenges covering payroll, rent/mortgage, and other operating costs 

SLFRF guidelines recognize that some nonprofits that were disadvantaged before the pandemic suffered greater effects from COVID-19, and the Treasury refers to these organizations as “disproportionately impacted nonprofit.” These can be identified by their: 

  • Operating in Qualified Census Tracts 
  • Operating in US territories 
  • Operating on Tribal Lands or by Tribal governments 

In order to invigorate impacted nonprofits in their communities, local governments can provide three enumerated services to impacted nonprofits. For instance, loans or grants can be made available to nonprofits to alleviate their financial hardship.  Alternatively, SLFRF funds can be used to provide technical services or in-kind assistance to mitigate the negative economic impacts of the pandemic on nonprofits. Regardless, assistance to nonprofits should have a response related to the hardship experienced and proportional to its impact.  

A list of allocations to county governments can be found here, and a list of allocations to metropolitan areas can be found here. For further information regarding SLFRF funding for your nonprofit, contact your state and local governments. 

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