President-elect Biden’s new $1.9 trillion stimulus proposal would allow nonprofits to participate in a new loan program and draw from a $3 billion economic development fund, according to a summary document of the plan. It also contains multiple measures that would probably relieve the stress on nonprofits and foundations to provide aid to Americans in need of food, housing, and other necessities.
Grants from the economic development fund could be used for “initiatives that support bottoms-up economic development and enable good-paying jobs.” The plan says that “state and local government entities, tribal institutions, institutions of higher education, and nonprofits” would be eligible to draw on the $3 trillion fund.
The plan also would use $35 billion in government funds for a small-business lending program that nonprofits could participate in, to “generate as much as $175 billion in low-interest loans and venture capital to help entrepreneurs — including those in the clean-energy sector — innovate, create, and maintain jobs, build wealth, and provide the essential goods and services that communities depend on.”
The plan also includes $350 billion in emergency funding for state and local governments. Nonprofit advocates say those funds are crucial because they would prevent cash-starved states and local governments from delaying or cutting payments to charities that have service contracts with them.
Relieving Burden on Nonprofits
In the stimulus bill enacted in December, nonprofits won a one-year extension of the temporary charitable deduction available to people who don’t itemize their taxes and another round of forgivable Paycheck Protection Program loans.
The Biden stimulus plan also offers measures that would directly help people nonprofits serve and probably reduce some of the extraordinary demands facing nonprofits that offer food, housing, and other necessities.
It would provide $1,400 in direct payments to Americans in addition to the $600 in aid provided in the December stimulus bill. The plan also would increase and extend emergency unemployment benefits beyond their March expiration date, extend an eviction and foreclosure moratorium, expand the child tax credit, and boost funding for food programs.
If the direct payments are approved, that could also offer a new fundraising tool for nonprofits: In the last round of direct cash subsidies, many Americans who were not suffering economic harm from the pandemic donated their federal checks to people in need.
