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Support the work of Colorado’s nonprofits through ARPA funds!

Feb 10, 2022

Summary

Today, Colorado’s lawmakers are reviewing proposals that were submitted for consideration of American Rescue Plan Act (ARPA) relief funding. One of those proposals from Rep. Mary Young uses between $25 million and $50 million of ARPA funds to make one-time grants to over 1,500 nonprofit organizations. To date, COVID relief has not addressed how hard the pandemic negatively impacted many nonprofits. 

We need the Colorado nonprofit community to come together to ask lawmakers to support this proposal!

How you can help

1. Call your lawmaker: You can make a huge impact in just a few minutes if you can look up your lawmakers and call their offices to ask for their support of this proposal. Click here to download a call script you can use to contact your legislators.

2. Email your lawmaker: It takes less than 30 seconds to email your lawmaker! We make it easy for you to send an already drafted message directly to your legislators. Please feel free to add any stories or experiences you’ve had at your nonprofit to have a greater impact on your lawmaker. Click here to email your lawmaker today

Background

Colorado’s nonprofit organizations are on the front lines of Colorado’s efforts to stop COVID-19 and recover from resulting socioeconomic hardships. As the pandemic has exacerbated systemic inequalities, nonprofits serve the people impacted the most including communities of color, families with low incomes, people living in rural areas, etc.  

The pandemic weakened the nonprofit sector’s ability to serve communities. The U.S. nonprofit sector lost 13% of employees or 1.64 million jobs, between March & May 2020 and 468,000 vacancies remain.  While the U.S. recovered 83% of all jobs, only 71% of nonprofit jobs have been recovered.   In Colorado, 13% loss of jobs would mean nearly 25,000 nonprofit employees lost their jobs between March and May of 2020 and that over 7,000 vacancies still remain.  Prior to the pandemic, nonprofits employed 1 out of every 20 Coloradans

Our state can do more to “help the helpers” especially the 6 out of 10 nonprofit employees negatively impacted by the pandemic in terms of their health, health of a family member, financial impact, job loss, or limited access to child care.   The Colorado General Assembly ought to use American Rescue Plan Act (ARPA) funds to alleviate the negative economic impacts of the COVID-19 pandemic on Colorado’s charitable nonprofit organizations [including entities fiscally-sponsored by 501(c)(3)s].

Request for ARPA Funding

We propose using between $25M and $50M of ARPA funds to make one-time grants to over 1,500 nonprofit organizations. Each of the following 5 ranges will receive the same amount of funding (between $5M & $10M): 

  • Up to $5,000 for applicants with gross receipts up to $50,000; 
  • Up to $10,000 for applicants with gross receipts between $50,001 and $100,000;
  • Up to $20,000 for applicants with gross receipts between $100,001 and $499,999;
  • Up to $40,000 for applicants with gross receipts between $500,000 to $999,999; and
  • Up to $80,000 for applicants with gross receipts of $1M or more.

Eligible nonprofits must report one or more of the following impacts of the pandemic [comparing an average of year-end figures for 2020 -2021 or 2021-2022 with 2019]:

  •  Loss of significant organizational funding or fundraising opportunities;
  • Significant reduction of the number of employees or difficulties paying wages to retain current employees or make future hires; or
  • A significant increase in demand for key programs and services.  

Nonprofit organizations can use these funds to address impacts on services and operations including:

  • Offsetting losses of revenues - e.g. reduced numbers of donations or donation amounts from individuals and businesses, canceled fundraisers, reduced sales or fees from services, etc.; 
  • Hiring new employees, filling job vacancies, or paying payroll or benefits obligations;
  • Ensuring the nonprofit’s financial sustainability by increasing cash flow, paying for mortgages or leases for office space, replenishing depleted reserves, or costs of business interruption; 
  • Increasing the quantity or quality of services in response to increased demand; or 
  • Paying for expenses for returning to the office during the pandemic such as re-organizing office spaces for social distancing, PPE, hand sanitizer, cleaning supplies, etc.    

A state agency experienced with managing grant programs for nonprofits (e.g. OEDIT, DOLA, et al) should administer this program directly or contract with an intermediary (e.g. foundation, federation). 

Why Colorado should use one-time ARPA funds to support nonprofits

Nonprofits are on the front lines of fighting COVID-19 and helping communities recover 

  • Besides health and mental health, nonprofits have been providing essential services including: 
  • access to housing for people who lost their homes after being laid off;
  • child care to help parents return to the workplace;
  • job training & adult education to help people return to work or change careers;
  • outdoor recreation for safe enjoyment of mountains, trails, and parks; and
  • arts & faith-based organizations to support needs for enrichment & spirituality.

COVID-relief has not addressed how the pandemic negatively impacted many nonprofits

  • While the Governor’s COVID-19 relief fund provided $24M of funds, solicited 11,000 donations, and made 1,000 grants, the program ended in 2020. 
  • By our analysis, nonprofits received only 3% of PPP loans & 8% of total dollars awarded in CO. 
    • Volunteer-run nonprofits and nonprofits with 500+ employees often did not qualify
    • PPP Second Draw’s 25% revenue loss requirement disqualified many nonprofits.
  • Most nonprofits did not use programs offering loans without forgiveness - like EIDL & Main Street Loans - as repayment diverts funding from services.
  • Because most relief programs required job or revenue losses, nonprofits facing spikes in demand for services (including many “essential” nonprofits) were often ineligible.  
  • State relief programs have not benefitted nonprofits generally because they have been designed to primarily benefit for-profit businesses or nonprofits with certain missions.

Investing more in Colorado’s nonprofits has positive multiplier effects and economic impacts   

  • The nonprofit sector creates 10 jobs for every $1 million of direct spending. This proposal could create between 250 and 500 direct jobs.
  • County-level indirect & induced impacts of nonprofit spending are between 1.40:1 to 2.16:1 $25M of grants could result in $35-$54 million in economic impact. $50M would double that.
Related Topics: 
AdvocacyFund Development
Region: 
Statewide