Are private entities’ donations to municipalities in support of matching requirements considered part of a public-private partnership?

The definition of a “public-private partnership” may vary across funding programs. The Infrastructure Investment and Jobs Act (“IIJA”) defines a public-private partnership as “an agreement between a public agency and a private entity to finance, build, and maintain or operate a project.”[1]

However, the Centers for Disease Control and Prevention’s (“CDC”) definition is broader. The CDC defines public-private partnerships as:

relationships between CDC and the private sector that are formal and informal in nature where skills and assets are shared to improve the public’s health and each partner shares in the risks and rewards that result from the partnership.[2]

The U.S. Department of the Treasury (“Treasury”) does not address private entities’ donations of matching funds in support of municipalities or a definition of “public-private partnerships” in the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Final Rule.[3] However, the White House’s Advancing Equity through the American Rescue Plan report consistently mentions partnering with “community organizations.”[4] The report “serves as a call for continued action by the broad range of federal and non-federal partners.”[5]  

One example of such a partnership is the State Small Business Credit Initiative (“SSBCI”), an existing program, to which the American Rescue Plan (“ARP”) allocated additional funds for expansion.[6] One type of program available under SSBCI is the Venture Capital Program, described below.

Jurisdictions may set up public-private partnerships for equity investing or [to] invest in venture capital funds. These investments are focused on providing capital to underserved startups and democratizing venture capital across geography and to diverse founders.[7]

Public-private partnerships may utilize both CARES Act funding and ARP funding. One example of a public-private partnership that utilized CARES Act funding is the Manufacturing Extension Partnership in Northeast Ohio. This partnership utilized CARES Act resources to help local manufacturers safely restart operations and refocus on new products and markets, among other benefits relative to the “long-term productive potential” of “businesses and workers.”[8]

Matching funds from private partners can also be used in conjunction with ARP funding to further existing programs and “strategies” that are already in progress.[9] For example, in Cleveland, Ohio, city leadership, foundations, the regional chamber, and a local community development corporation utilized ARP funding to further their efforts to bring jobs back to the area through a food-tech hub which “[includes] . . . a workforce development center to prepare people to attain and advance in a career.” Further, “parts of ARP run through the Economic Development Administration (‘EDA’).” And the EDA and the Department of Agriculture have programs that could support the type of business and workforce development initiatives seen in Cleveland.[10]

Another strategy for fully tapping into the available funds from ARP and other sources is by utilizing recovery-focused regional councils comprised of “small businesses, neighborhood leaders, social service agencies, philanthropic leaders, and corporate heads” to help “execute strategic investments and monitor [program] impact.”[11] Such a council can be tasked with “aggregating and supplementing existing recovery plans, setting goals, recommending investments, and tracking results.”[12]

Last Updated: June 15, 2022