Despite widespread federal and state programs aimed at providing COVID-19 pandemic relief funds, many nonprofit organizations fell through the cracks, nonprofit and state government officials reported during a recent event.
Michigan nonprofits’ ongoing financial needs prompted this year’s Legislative Day event hosted by the Michigan Nonprofit Association (MNA) that featured Lt. Gov. Garlin Gilchrist II and several state senators and representatives.
The event covered several reasons why many nonprofits were unable to secure COVID relief funding, such as lacking a presence in relief marketing, a lack of direction in how to apply, and often little guidance on whether a nonprofit organization qualified for funding, officials said.
“The state tried to fill in some of those gaps from the federal government,” Gilchrist said during the event. “But even with the 26 programs that we started, I think they were helpful, but all of them did not … sort of meet every single need.”
Nonprofit leaders report an ongoing need for relief funding as more traditional revenue streams shrink. According to the Michigan Nonprofit Association, annual fundraising for small and medium-sized nonprofits is down 53 percent while individual donations are down 46 percent.
“The charitable nonprofit sector is the backbone of our communities, and they continue to face unprecedented challenges,” MNA President and CEO Kelley Kuhn wrote in a statement. “Unlike other industries negatively impacted by the pandemic, no dedicated relief or grants have been allotted by the State of Michigan to charitable nonprofits.”
Nonprofit organizations play a key role in providing resources to local communities and make up a sizable portion of Michigan’s workforce, Kuhn added. Prior to the pandemic, Michigan nonprofits accounted for more than 10 percent of Michigan jobs, employing around 470,000 Michigan residents.
Distributing ARPA funds
Meanwhile, roughly 40 percent of the nearly $15 billion that Michigan received in federal American Rescue Plan Act funds has gone unspent, state Rep. Joe Tate, D-Detroit, noted during last week’s event. Those funds are likely to remain unspent as lawmakers spend the coming months finalizing a budget for the next fiscal year.
Gilchrist said creating relationships with nonprofits that are better positioned or have more experience in accessing funding can be a solution to receiving financial relief. As well, aligning with small businesses — as many nonprofits can be categorized — can expand the pool of available resources.
Gilchrist also discussed the proposed $50 million, ARPA-funded Michigan Nonprofit Relief and Activation program. The program would be open for nonprofit applications that explain how the funding would benefit continued or expanded programming. This one-time funding program, which is subject to legislative approval, would focus on assisting nonprofits that work to eliminate barriers for Michigan workers, such as improving access to housing, child care, high-speed internet or transportation. Eligible nonprofits also could include similar services that fall under ARPA spending guidelines.
Gilchrist said he recognizes $50 million is a small amount of funds compared to the needs of Michigan nonprofits.
“We hope it’s a demonstration of our commitment and would love to obviously have that conversation about what it looks like to move forward or to increase that number for that kind of support,” Gilchrist said.
The MNA’s Legislative Day event also discussed effective advocacy for nonprofit leaders. The best way to be heard is to connect with local legislators, said Thye Fischman, a legislative assistant representing state Rep. Julie Calley, R-Portland.
“Effective advocacy is a combination of subjective and objective information,” Fischman said. “Rep. Calley really recommends sharing a story or two about the personal impact that your nonprofit has had and been able to make in your community. And then follow that up with statistics that demonstrate your reach and your effective effectiveness.”
Local nonprofits also should stress their nimble nature and stronger ability to respond to changes in communities than the government, Fischman and others said.
“There are holes inside (of) our communities that the services the state provides can’t cover,” said state Sen. Curt VanderWall, R-Ludington.
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