Can a municipality award SLFRF funds to a nonprofit to support the municipality’s elections administration expenses such as staffing costs, technology expenses, public awareness campaigns, etc.?

A municipality can likely award Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”)  to a nonprofit to support the municipality’s election administration. The American Rescue Plan Act (“ARP”) established Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) to broadly support local communities, which likely extends to support local election administration.

First, municipalities may likely use SLFRF for election administration costs under two of the four “eligible use” categories: (1) Revenue Replacement and (2) Public Health and Negative Economic Impacts, as set forth in more detail below.

Second, municipalities can likely use SLFRF to fund nonprofits who assist in election administration. Under section 602(c)(3) of the Social Security Act, nonprofits and private organizations are allowed to be subrecipients of these funds to carry out “an eligible activity on behalf of the SLFRF recipient (transferor), as long as they comply with the SLFRF Award Terms and Conditions and other applicable requirements.”[1]  Municipalities should carefully consider the underlying regulations and related guidance. 

Revenue Replacement Eligible Use Category

The Revenue Replacement eligible use category allows municipalities to fund government services up to the amount of revenue loss due to the pandemic. Government services include “any services traditionally provided by a government.”[2] While not explicitly stated in the Final Rule, if the services are traditionally provided by the municipality, elections administration costs may be considered an eligible use of revenue replacement funding. Under this category, recipients “may use funds up to the amount of revenue loss for government services.”[3] Revenue loss is calculated as either a part of the standard allowance of up to $10 million, or through a full revenue loss calculation.[4] Revenue replacement is the most flexible eligible use category.

Public Health and Negative Economic Impacts Eligible Use Category

The Public Health and Negative Economic Impacts eligible use category is specifically intended to increase public sector capacity.[5] There are three main public sector categories under the Public Health and Economic Impacts eligible use category:

• Public Safety, Public Health, and Human Services Staff;
• Government Employment and Rehiring Public Sector Staff; and
• Effective Service Delivery.[6]

Election administration would likely be eligible under the Effective Service Delivery subcategory. However, because election administration is not an enumerated use under any of these categories, municipalities should consult the “Framework for Eligible Uses Beyond Those Enumerated”[7] to determine whether the specific project could be funded under the Other Economic Support expenditure category.[8]

Using this framework, recipients should identify the COVID-19 public health or economic impact and design a response that addresses or responds to the identified impact.[9] It is a good practice for recipients to maintain detailed documentation supporting any eligibility assessments undertaken for non-enumerated uses.

Use of Nonprofits to Assist in Election Administration

A nonprofit is likely eligible to receive SLFRF as a subrecipient to assist in election administration. Nonprofits acting as subrecipients must carry out “an eligible activity” on behalf of the municipality (SLFRF recipient) and must “comply with the SLFRF Award Terms and Conditions and other applicable requirements.”[10]

Last Updated: February 23, 2023