What should nonprofits know about ARPA funding?


Finding and navigating funding opportunities provided through federal, state and local government entities can be challenging for organizations of any size. The recent influx of American Rescue Plan Act pandemic relief dollars (referred to as “ARPA” or “ARP”) into Minnesota has many anxious to learn what opportunities may arise as a result.

MCN received a grant from the McKnight Foundation to help track where ARPA dollars have landed, to ensure grant-seeking nonprofits have the information they need to pursue funding for which they’re eligible, to promote the inclusion of nonprofits in relief opportunities and to advocate that application processes be simple and accessible.

A major focus of the research so far has been the tracking of ARPA funding and learning how it is being, or will be, utilized. This update will focus particularly on funding allocated to Counties, Cities, Towns and Townships (aka Local Units of Government) in Minnesota.

How much funding is coming into Minnesota, and who is responsible for it?

Minnesota was allocated $8.5 billion of Fiscal Recovery Funds, divided into three categories:

  • $2.8 billion in flexible aid to the state (the State Fiscal Recovery Fund);
  • $2.1 billion in flexible aid to local governments (Local Fiscal Recovery Fund); and
  • $3.5 billion in program-specific funding.
When is the funding available and by when must it be spent?

Local governments – Counties, Cities, Towns/Townships as well as Tribal Governments – are receiving funding in two allocations; the first was distributed in May of 2021 and the second will come in the summer of 2022. Entities receiving funding have from March 2021 through December 2024 to obligate funding; expenditures must be concluded by December 31, 2026.

What can ARPA funds be used for?

A fact sheet published by the US Department of Treasury provides a detailed description of these uses:

  1. Support public health expenditures, by, for example, funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
  2. Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector;
  3. Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic;
  4. Provide premium pay for essential workers, offering additional support to those who have and will bear the greatest health risks because of their service in critical infrastructure sectors; or
  5. Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband Internet.
How are Local Units of Government in Minnesota thinking about this funding?

The Minnesota Council of Nonprofits is working with key contacts to identify how local elected officials are utilizing or planning for these dollars. What have we learned so far?

While there is nothing that requires local units of government to contract with community-based organizations to provide services, initial findings show that many have done so, are planning to do so, or are considering doing so.

Some local governments have fully developed strategies for the usage of ARP funds, but others were waiting until the final rules were released by Department of Treasury (published in January 2022) and are now moving forward; still others are holding out until full allocations (round one and two) are in-hand to roll out a comprehensive plan.

In addition to the money directly allocated to Minnesota’s Local Units of Government, there are federal competitive grants still in process for which various entities in Minnesota have applied. Many of these grants require community partnerships which may present opportunities for nonprofit organizations to partner as subrecipients of the funding, should it be awarded to any of the Minnesota applicants.


What does this mean for my organization?

The bottom line is that while this federal funding has been in Minnesota for over a year already, new initiatives will likely be rolled out over the next 12-18 months be it at the local, state or federal level.

To assist individuals in tracking this, MCN is developing a one-stop-shop website featuring funding opportunities for nonprofit entities that are new or increased by ARPA funding (do we want to include a specific date?). This website will be updated frequently to advertise open Requests for Proposals. In addition, it will include tools and resources to support the requesting, receiving and reporting on government grants. Keep an eye out for more information!