Investing $100 Million in Work of SC Nonprofits

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Use this information to inform your legislators, your board, your staff, and your friends!

Invest $100 Million in the Work of SC Nonprofits!

Now is the time to accelerate economic growth that benefits all South Carolinians by investing in the work of nonprofit and philanthropic organizations.  

A grants program, funded with an appropriation of at least $100 million from American Rescue Plan Act (ARPA) and managed by the SC Department of Commerce, will provide immediate investments in nonprofits as they work to counter the pandemic’s impact across our economy and aid those disproportionately affected. 

SC’s nonprofit and philanthropic community is united in support and stands ready, with its 90,000 employees and hundreds of thousands of volunteers, to partner with the State on COVID recovery. 

Proposal: $100 Million

Funding Source: American Rescue Plan Act (ARPA) State Allocation ($2.5 billion total)

Agency Oversight: Department of Commerce

Nonprofit Grant Program Impact:

• Nonprofits provide many of the critical services that make full employment possible, workforce retention a reality, and economic mobility attainable.
• Grants will provide access to funds at the local and regional level, ensuring greater equity for communities lacking in support of these critical services.
• While other ARPA priorities will require long-term planning and implementation that could take years, this program would deliver funds directly to communities and be put to work within months.
• The expertise of the Department of Commerce can help the state better align nonprofit grants with state economic goals and community development needs. 
• With input from the nonprofit and philanthropic sector, the state can ensure that the program aligns with operational practices and adheres to industry best practices.
• Grants provide greater public visibility of the state’s investments in local communities while also ensuring transparency and accountability.

Framework:

• Total Funds: $100 Million - just 4% of ARPA Funds

• State Oversight, Accountability, & Transparency

• Agency: Department of Commerce would provide management and oversight given their leadership in our state’s economic vision, experience in grantmaking, and their continued work with various nonprofits.
• Federal Regulations: GuideHouse would provide necessary guidance on any and all application needs, reporting requirements, and other regulatory needs.
• Reporting Requirements: An application, grant contract, and final report could each be required to capture the need, and then the impact of grants, with information available for public review as necessary. 
• Industry Input: Nonprofit and Philanthropic Advisory Group would provide needed guidance in the design and implementation of the grant program. 
• Eligible Organizations: Broad eligibility, as provided for by ARPA, would provide the largest impact to South Carolina communities. All 501(c)3 nonprofits are eligible under ARPA.

• Eligible Uses: 

• Projects and programs carried out by nonprofits that align with the State’s economic goals and vision should be eligible for funding. 
• Rather than specific “types” of nonprofits, merit should be granted based on the project/program’s alignment with priorities and ARPA regulations. 
• Funds to support nonprofits who have suffered significant loss or cost increases (also eligible under ARPA).

• Leveraging Existing Philanthropic Infrastructure

• Existing philanthropic organizations can provide valuable insights as well as the ability to assist in distribution of funds to alleviate the burden on agency staff, all with strict compliance and accountability to state and federal regulations.

Eligibility within ARPA Final Rule:

Both the Interim Final Rule (IFR) and Final Rule by the US Treasury, plus ARPA legislation itself, explicitly states that aid to nonprofits is an eligible use of ARPA funds to:

1. Address the negative economic impact of COVID-19 on nonprofits (Final Rule, page 153)
2. Provide eligible services in communities (Final Rule, page 173)

Examples of Similar Programs & Partnerships

• South Carolina Examples

• The Department of Commerce has worked with nonprofits to help distribute funding or manage programming for a number of years.
• The Town of Hilton Head has partnered with the Community Foundation of the Lowcountry and will use the Foundation’s expertise and existing infrastructure to make grants to nonprofits using the Town’s ARPA funds. 
• Many other cities and counties are considering similar partnerships.

• Other State Examples

• Numerous states are considering, or have already adopted nonprofit grant programs using ARPA funds including: North Carolina, Georgia, Alaska (using Commerce & Private Philanthropy), New Mexico, and others. 
• Oklahoma’s Department of Commerce has continued to leverage their nonprofit sector for continued input on programs, even pre-pandemic.

Role of Nonprofits in COVID Response and Recovery:

• Critical support systems that make a thriving economy possible, such as childcare, job training, housing, food security, tourism, healthcare, education, and so much more, are championed and made possible by our state’s nonprofit community and private philanthropy.
• Many of our nonprofits saw disproportionate impacts on their operations due to COVID-19. From long-term mandated closures to record-setting demands for service - nonprofit organizations had to find a way to provide critical community services despite all challenges.
• South Carolina’s nonprofit sector accounts for nearly nine percent (9%), roughly 90,000 jobs, of our state’s workforce and experienced job loss of about 7% during the pandemic, according to a survey conducted by Together SC.

Additional Resources Available:

All materials below are available by request or at togethersc.org/advocacy:

• Post and Courier Jan. 31, 2022 Commentary from Barnet, Shaw and Zucker
• Nonprofit Industry Letter of Support
• ARPA All-Member Call - Jan 19
• Together SC Proposal Overview Slide Deck
• Funding Collaboration Proposal (Grantmaking Specifics) - SC Grantmakers Network + United Way Association + Together SC