Policy Update: ARPA Funds for Nonprofits, Affordable Connectivity Program Ending, and more

Time is Running out to Access Remaining COVID-19 Relief Funds
The American Rescue Plan Act (ARPA), passed in 2021, provided direct funding to local governments all across the country through the State and Local Fiscal Recovery Fund. Local governments have flexibility in how they spend this money, if the activities fit into categories such as responding to the public health and negative economic impacts of the pandemic; investing in improvements to water, sewer, and broadband infrastructure; disaster relief; etc. These funds must be obligated by December 31, 2024 and fully spent by December 31, 2026. Some funding is still available, and must be obligated by the end of the year on eligible projects and entities or the federal government may choose to reclaim those funds. Register for the National Council of Nonprofits discussion on how nonprofits can access remaining ARPA relief funds – January 30th at 2pm CT.
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Affordable Connectivity Program Will Stop Accepting New Enrollments February 7th
The Affordable Connectivity Program was launched at the end of 2021 as part of the Bipartisan Infrastructure Law. Since its start, nearly 23 million households have participated, receiving a discount of up to $30 per month toward internet service (up to $75 on qualifying Tribal lands) and/or receiving a one-time discount of up to $100 to purchase a device. However, the ACP is running out of funding and, without any additional appropriations from Congress, is expected to completely run dry by May. Right now, the Federal Communications Commission is ordering a wind-down of the ACP, and February 7th is the last day for new enrollments.
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Government Shutdown Averted (Again Again) Until March
Congress has passed additional continuing resolutions to fund the government. Four appropriations categories will maintain status quo funding through March 1st, while the remaining appropriations categories will maintain status quo funding through March 8th.  Continuing resolutions are stop gap solutions while Congress works on spending bills for the fiscal year. These CRs provided stopgap funding to many streams accessed by nonprofits, such as the Temporary Assistance for Needy Families (TANF) and the Community Health Center Fund. However, these delays and negotiations are impacting relief and support for Ukraine, Israel, Gaza, and Taiwan. A continuing resolution cadence poses a recurring threat for government shutdown; if the government shuts down, nonprofits operating federal contracts may experience delays in payments, and demands for social services offered by nonprofits may increase without any additional revenue.
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Federal Government Considers Regulations for Donor Advised Funds (Still)
The Treasury Department extended the public comment period on proposed regulations discussed in the December blog post – read the proposed rule and submit your feedback by February 15.
The Treasury Department and Internal Revenue Service published the first installment of proposed regulations for donor advised funds (DAFs). A DAF is an account maintained by a charitable organization and funded by contributions from donors who have an ability to advise on the distribution or investment of amounts from the fund. These types of funds have traditionally been able to offer many of the same benefits as private foundations for donors, without being subject to foundation rules such as donating a certain percentage of funds annually. The proposed rule would offer new definitions for what does and does not count as a DAF, and would create an anti-abuse rule with the intent of deterring donors from using DAFs to avoid tax liability.
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No Significant Movement on Federal Government Consideration of Changes to Federal Grantmaking Rules
The Office of Management and Budget has not made any public movement on the changes it is considering for the Uniform Grants Guidance. In Congress, the Streamlining Federal Grants Act (S. 2286/H.R. 5934) was voted out of the Senate Committee on Homeland Security and Governmental Affairs as a substitute. This legislation, as currently written, would still require federal agencies to get feedback from nonprofits on ways to improve services provided by grants, create a grants council with the purpose of simplifying the grant application and reporting process, and more. It awaits further action.
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Missouri General Assembly and Governor
The General Assembly went into session on January 3rd. So far, the House is moving through issues quickly while the Senate is experiencing filibusters and infighting among the Republican party. One major issue this legislative session of relevance to nonprofits is the Federal Reimbursement Allowance (FRA) – a healthcare provider tax that provides for much of the funding for Missouri’s Medicaid program by drawing down a federal match – which expires this year. SB 748 would forever remove the sunset provision that is currently in place on the FRA; while this bill passed out of committee in the Senate, efforts to add pro-life language to it may cause delays down the line.
The Governor’s state of the state address is later today at 3pm CT. You can watch it here.
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Kansas Legislature
The Kansas Legislature went into session on January 8th. The legislators worked fast and already sent a tax proposal to the Governor’s desk; Governor Kelly is expected to veto it. The plan would eliminate state income taxes on social security, exempt the first $100,000 in property taxes, eliminate the sales tax on groceries, create a single income tax rate of 5.25%, increase the standard deduction, and more.
The Governor’s state of the state address took place on January 10. She continued her call for Medicaid expansion, and leaned into supporting the rural parts of the state. You can watch the recording here.
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This blog is informed by the Nonprofit Champion, government websites, and various news articles. Read more from the National Council of Nonprofits on January 16.
You can also review the full 2024 National Council of Nonprofits Policy Agenda, here.
 
Stay tuned for more updates as the year progresses.

This post was written by Kristen Wood, Nonprofit Connect's Advocacy Contributor.
Kristen is an avid participant in Kansas City’s nonprofit community and a self-proclaimed ‘lifetime learner’. In addition to working for Goodwill of Western Missouri & Eastern Kansas, she enjoys following nonprofit policy issues.

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To those new or newer Executive Directors, I encourage you to investigate the Executive Directors Bootcamp.  This 4-session virtual program will equip you with the tools and knowledge necessary to excel in key leadership areas.  Starting on Feb. 21st and the following Wednesdays, this session is limited to 25 participants and won't be offered again until the fall.