March 4, 2009

New Mexico Nonprofits Brace for Battle With the Economy

Part II: The Federal Stimulus Package

On February 17 President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. This economic stimulus package is historic for the amount of funding allocated and for the breadth of spending areas. Spending will touch many job sectors and geographic areas, including funding for non-profit organizations in New Mexico. In this article we will explore the basic strategies of the plan, the service areas most likely to affect nonprofits, the way spending will happen, and recommended actions for non-profit leaders.

Stimulus Overview and Investment Strategies

Much of ARRA’s funding is for new initiatives and there is an emphasis on quick spending – in other words, the landscape is shifting from what we’re all familiar with when it comes to accessing government grants and contracts. ARRA mixes initiatives designed to create jobs, preserve jobs, assist struggling families, and keep state budgets afloat. ARRA uses a blended approach towards the immediacy for strategies, with: short-term measures, like unemployment benefits extensions and funding of “shovel ready” infrastructure projects; medium-term approaches like PELL grant expansion and Clean Water Act projects; and long-term strategies, such as investment in the educational system and incentives for development of sectors that are expected to grow, like energy technology.

Key Sectors for Spending

Looking at ARRA as a pie, there are certainly some larger slices. The main areas of attention are tax relief and assistance to the vulnerable, energy, science/technology sector development, infrastructure modernization, education and workforce training, healthcare cost reductions, and protection of public sector jobs and vital services. Key areas that overlap the non-profit sector include:

Arts and Culture: Grant funding will be administered by the National Endowment for the Arts in order to help struggling arts groups by funding arts projects and activities that preserve jobs.

Community Development and Housing: ARRA includes funding for Community Development Block Grants, Community Services Block Grants, Neighborhood Stabilization Program, HUD HOME Program, Emergency Shelter Grants, Housing Energy Retrofit for special populations (Section 8, Elderly, Disabled), Economic Development Assistance programs, Home Weatherization for low and modest-income homes, and Energy Efficiency and Conservation Block Grants.

Health and Human Services: Measures include assistance for community health centers to renovate facilities and provide patient care, as well as services for low-income families, such as additional funding for the Low-Income Home Energy Assistance Program to help struggling families pay utility bills. ARRA expands the Compassion Capital Fund for job training, energy conservation, and human services.

Workforce Development: ARRA includes funding for the Workforce Investment Act Training and Employment Services for training/employment for adults, youth, dislocated workers, and high-growth/emerging industries (e.g. healthcare and green jobs); and funding for the Community Service Employment for Older Americans program to train and hire older low-income people for part-time community service.

Youth Development and Education: Initiatives include expansion of Head Start and additional funding for Child Care and Development Block Grants.

Processes for Funding and Recommended Actions

In reading through ARRA, two patterns appear. First, unlike standard appropriations for specific projects, ARRA usually doesn’t specify how funds must be used. Instead it leaves much of that determination up to the best judgment of states and federal agencies, though it sets numerous guardrails for timing, funding levels, general thrust of programming, and accountability/transparency. For this reason, much of how, when, and to whom funds will be dispersed remains to be determined. Second, to spur quick movement, much of the ARRA funding has a use-it-or-lose-it type structure, whereby an agency must designate, begin using, and report on spending within 30 to 180 days. The clock is already ticking for Federal agencies, which have begun reporting on block grant awards and use of funds.  Because funds are being authorized by Federal and State agencies, the process for applying to receive contracts and grants varies by program. To keep apace and fully match your organization’s services and mission to funds coming through ARRA, we recommend the following actions:

  • For existing federally funded programs, contact your management office to find out about the application timelines and procedures.
  • For funding that has discretionary delivery methods contact the appropriate government representatives, such as your state legislator, to find out what is likely to happen and to encourage non-profit sector involvement.
  • For new funding programs find out what agency to contact; ask what type of bid process, if any, will be used (much of the spending does not require competitive bidding nor delivery by non-profit partners); and get on relevant mailing/contact lists for RFPs.
  • Keep apace with new major legislation as the 2010 budget and upcoming housing rescue plans contain additional spending likely to reach non-profit service providers.
  • The listing of programs above is by no means comprehensive so it is wise to check websites of national advocacy and membership organizations for your service sector for a complete listing of possible ARRA funding.
  • Consider non-monetary resources as some programs will not provide funding but will result in expansion of volunteer resources, such as AmeriCorps and YouthBuild.

Next up: Part III: The current landscape for individual donations and volunteerism – watch for it in the next newsletter!

Contact: Aly Sanchez, director of Organizational Strategy and Learning


H.R. 1, The American Recovery and Reinvestment Act of 2009, Senate and House of Representatives of the United States of America. February 17, 2009. Note: Opens PDF.

Coleman, Michael, New Mexico and the Stimulus: Specific Numbers, Albuquerque Journal, January 27 2009.

Perry, Suzanne, Economic-Stimulus Package to Help Nonprofit Groups Meet Social Needs, The Chronicle of Philanthropy, January 15, 2009.

Perry, Suzanne, Key Democrat Says Congress Likely to Move Quickly to Expand National Service, The Chronicle of Philanthropy, February 25, 2009.

Perry, Suzanne, President’s Budget Outline Includes Proposed Gain for National Service, The Chronicle of Philanthropy, February 26, 2009.

Southeast Michigan Council of Governments, Community and Economic Development Provisions in the American Recovery and Reinvestment Act of 2009. Note: Opens PDF.

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