Economic Recovery Provisions that Impact Nonprofits

In the coming weeks, Congress will be finalizing the American Recovery and Reinvestment Act of 2009 (economic stimulus package) in response to the economic crisis facing our country. Currently the House and Senate are revising their bills and offering amendments.

This large piece of legislation includes a focus on job creation, tax cuts and incentives, and financial relief for families, businesses and individuals. In addition, the bill includes funding to inject cash into struggling state economies which will help those nonprofits who count on their state funding contracts and commitments.

The economic stimulus bill will impact the nonprofit sector and the clients they serve, therefore it’s important to understand its many intricacies. To make sense of it all, here are some of the provisions being considered that would impact nonprofits:

E-verify Program
A provision requiring any organization receiving funds under the economic recovery legislation to participate in the federal E-verify program. E-verify is an online database run by the Department of Homeland Security and the Social Security Administration that enables employers to verify an employee’s Form I-9 immigration information.

Community Development Fund
An amendment that would exclude nonprofit entities from competing for over $3.4 billion in community development funds for neighborhood stabilization activities. If adopted, only state and local governments could compete for the funds.

Compassion Capitol Fund
An amendment to increase funding of the Compassion Capitol Fund by $1/2 billion. The Compassion Capitol Fund is a federal grant program to fund things such as, “one-time capacity building grants directly to faith-based and community organizations” and “intermediary organizations that provide training, technical assistance, and capacity-building”.

Volunteer Mileage
An amendment identical to the text of the Giving Incentives to Volunteers Everywhere (GIVE) Act. This provision would raise the volunteer mileage deduction to at least 24 cents per mile and exempt from taxable income mileage reimbursements up to the business rate (currently 55 cents/mile).

Bridge Loan Proposal
A proposal to address the increasing need of nonprofits to obtain the necessary lines of credit to weather the increasing delays in government payments for the services they deliver.

Child Care and Development Block Grants
$2 billion to help states provide child-care services to low-income families.

Medicaid
$87 billion to increase the federal share of Medicaid.

Head Start and Early Head Start
$2.1 billion for early-education programs.

Social Services Block Grants
$400 million to help states provide services to unemployed and low-income people.

AmeriCorps
$200 million for this national-service program to create positions to help nonprofits hit by increased need and shrinking donations.

Food Banks
$150 million to support food banks, which have faced an influx of clients needing food.

Child Tax Credit
Increase the eligibility for the refundable child tax credit in 2009 and 2010 by lowering the threshold to $6,000.

Earned Income Tax Credit
Expand the EITC to provide increased credit for 3 or more children and additional marriage penalty relief for married couples.