Ensuring equitable distribution of American Rescue Plan funds: A case study of the Latino Community Foundation

LCF Assignment in Napa, April 16, 2022.

In March 2021, Congress passed the American Rescue Plan Act (ARP), which injected $1.9 trillion into the economy. This included $350 billion in State and Local Fiscal Recovery Funds—a highly flexible source of support for state, city, county, and tribal governments.  

In the wake of this once-in-a-generation infusion of federal investment, a growing body of data suggests that many of these funds are being used to support programs and services for historically excluded groups and communities that were disproportionately affected by the pandemic.  

Research at Brookings Metro indicates that nonprofits are playing—and will continue to play—an important role in deploying these investments. Similarly, McKinsey and Company research finds that the philanthropic sector worked to connect nonprofits and local governments during the pandemic to serve the most vulnerable communities.  

One particularly compelling example of the philanthropic leadership occasioned by ARP’s passage is the Latino Community Foundation (LCF), a statewide foundation focused on the civic and economic health of California’s Latino or Hispanic communities. With the new federal investments, the LCF saw an opportunity to strengthen nonprofit capacity and catalyze civic power to ensure those funds were equitably delivered to residents and communities in most need. Historically, federal investments have not always served vulnerable communities, but the LCF and others are demonstrating a way to do so.  

Latino or Hispanic communities faced transparency, capacity, and engagement challenges regarding ARP funds 

The American Rescue Plan gave local governments significant and flexible resources to address needs created or exacerbated by the pandemic. But California’s Latino or Hispanic communities faced challenges in accessing these resources and having a say in how they were allocated, including insufficient transparency around funding allocations, barriers to inclusion for smaller nonprofits, and impediments to community engagement. 

Specifically, community leaders were unaware of the criteria local officials used to allocate ARP funds. When searching local government websites, it was not always clear how much money localities received, how much had already been spent, or how people could request funding. 

Furthermore, community leaders noted that many of the nonprofits working with Latino or Hispanic communities are often smaller and have difficulty accessing government contracts and funding. ARP contracts and grant opportunities require a great deal of paperwork and bureaucracy. Most smaller nonprofits focus on direct service delivery and do not have the capacity or staff to rapidly navigate these applications, nor do they have grant writers to handle the many requirements. 

Finally, there were numerous challenges around access to information and public participation. A number of localities published information regarding key ARP-related meetings with less than 24 hours’ notice. In many of these meetings, translation and interpretation services were not provided. Due to these decisions, many Latino or Hispanic working families and immigrants were unable to participate, either due to scheduling conflicts or language barriers. This may have led to instances in which local governments used ARP funds to bolster law enforcement budgets without public buy-in, even as many Latino or Hispanic community leaders felt the funds would be better spent prioritizing community-based solutions. 

In light of COVID-19’s disproportionate impact on Latino or Hispanic health and education, the LCF felt that ARP funds could help undo the effects of historic disinvestments in these communities. The LCF noted that it was also an opportunity to demonstrate that a functioning government can meet the needs of under-resourced communities.  

LCF Assignment, cohort ALAS in Half Moon Bay, May 10, 2022.
LCF Assignment, cohort ALAS in Half Moon Bay, May 10, 2022.

Using convening power and advocacy to help nonprofits meet the moment 

Through its role as a grant-maker, informer, convener, and advocate, the LCF began an effort to invest in grassroots, Latino-led nonprofits to ensure equitable distribution and implementation of ARP resources, and convened a network of such organizations in a peer-learning group.  

LCF leveraged its recently created Latino Power Fund—a $50 million initiative to build civic and political power—to fund this work. This fund had been a long-standing vision for the LCF due to historic underinvestment in Latino or Hispanic communities, both in the philanthropic and public sectors. COVID-19 only magnified the challenges these communities faced, prompting the creation of the fund in June 2021. The passage of the American Rescue Plan Act was another consequential opportunity to invest deeply in grassroots communities to advance civic engagement within the broader Latino or Hispanic community.  

In February 2022, the LCF released a call for proposals for how to ensure a fair and impactful distribution and implementation of ARP funds.Through a participatory grant-making process, the foundation issued $1.4 million to 35 California nonprofits so that they could educate, advocate for, and mobilize the Latino or Hispanic communities the pandemic hit hardest.  

At a Latino Power Fund Briefing in April, the LCF partnered with the California Endowment—a statewide health-oriented foundation and grant-making organization—to issue a call to action to end and reverse historic disinvestment in Latino or Hispanic communities by leveraging ARP’s historic infusion of federal funds. Philanthropic, nonprofit, and government leaders also discussed the challenges and milestones reached as a result of ARP funds.  

Over the course of the year, the LCF disseminated information that would help groups utilize the federal resources, provided technical support for news media outreach to hold local governments accountable, and shared lessons learned across regions. Their efforts demonstrated that philanthropy, nonprofits, and government all play important, complementary roles in ensuring effective implementation of federal programs. 

Efforts to focus ARP spending toward Latino or Hispanic community needs 

Instead of letting the Latino or Hispanic community miss out on a potentially transformative moment, the LCF connected organizations toward a common agenda to improve transparency in fund allocation and government decisionmaking, build nonprofit capacity, and remove barriers to resident engagement. Through the LCF’s efforts and those of their nonprofit partners, ARP spending has become more focused on Latino or Hispanic communities. 

For example, the Mountain View Solidarity Fund, a volunteer-based community organization led by immigrant women in the city of Mountain View, Calif., successfully advocated for their local city council to entrust them with distributing $1.8 million in ARP funds to vulnerable families experiencing economic hardship due to the pandemic. In California’s Central Valley, the youth organizing project and LCF partner 99Rootz held a rally with other local organizations and advocated for federal relief dollars to go toward youth investments and housing; their advocacy resulted in $1.25 million in ARP funds going to youth jobs programs and affordable housing. And in Orange County, Calif., CHISPA OC, an organization that builds civic power with and for young people, was able to steer millions in federal funds to local community services in Santa Ana.  

Meanwhile, members of the LCF’s Latino Giving Circle Network, the largest network of Latino or Hispanic philanthropists in the country, wrote to the San Mateo County Board of Supervisors to advocate that the 1,300 to 1,600 farmworkers that lived in the area be prioritized in the distribution of nearly $150 million in ARP funds. In the midst of the pandemic, these farmworkers risked their health and safety to ensure our food supply chain remained intact. As a result of the Latino Giving Circle Network’s advocacy, these essential workers received $500,000 in bonus pay. 

Lessons from the LCF’s experience 

The LCF’s convenings and its nonprofit partners’ advocacy efforts yielded important lessons that can assist government leaders in implementing future federal initiatives. The LCF also released its own case study on how local governments and local Latino-led nonprofits can work together to ensure the successful distribution and implementation of government funds for Latino or Hispanic communities. 

Focus on expanding public engagement  

In order to ensure residents at the margins had a voice in ARP allocations, the LCF and its partners conducted a variety of advocacy initiatives, from nonprofit convenings to rallies at local government meetings. Such efforts show that policymakers must be intentional about removing barriers to participation for residents in order to reach those they need to hear from most.  

LCF partners suggested policymakers evaluate their existing engagement practices, identify which populations they have not reached in the past, and consider possible barriers these groups might face. Government officials may believe that simply sending out a survey or announcing upcoming public meetings is enough to increase resident participation, but they still may miss out on critical feedback from a large portion of the population. As a result, the LCF recommends government leaders prioritize: 

  • Language access. Written materials intended for the public should be translated, and public meetings and events should be accessible in a variety of languages via bilingual interpretation.  
  • Advance notice. Public meetings should be announced with ample advance notice, distributed through multiple channels such as local media, social media, and community-based organizations, so that workers and families can make plans to participate. 
  • Work-friendly timing. Forums and other public events should be scheduled at different days or times so residents with different shift hours are able to attend.  
  • Accessible locations. Public meeting locations should be accessible, including to people with disabilities, and should include ample free parking and be conveniently located near public transit. Public meetings should also be held in different parts of the county or city.  
  • Child care. On-site child care should be available at public meetings so that families with young children can participate. 
  • Digital inclusivity. Officials should host both in-person and online meetings, so that digital fluency or reliable internet access are not further barriers to participation.  

For government leaders with limited resources, some of these engagement initiatives may seem daunting. Fortunately, community-based organizations can help engage hard-to-reach populations. Philanthropic partners can also play an important role in funding grassroots organizations that can reach residents most effectively. 

Prioritize working with community-based organizations, including smaller nonprofits  

Community-based organizations, including smaller nonprofits, have long-standing relationships with historically excluded groups and are therefore experts in community engagement. Policymakers should see these organizations as important collaborators in public engagement, program design, and implementation. Moreover, to address potential gaps in service delivery, government leaders should collaborate with other allies, such as philanthropic partners, in order to build nonprofit capacity and remove barriers to government contracting. 

Additionally, government leaders should design their applications and contracts so that nonprofits of all sizes and budgets can apply. In LCF convenings, it was confirmed that organizations with budgets of less than $2 million have difficulty obtaining contracts from local governments. Yet these smaller organizations often have stronger and deeper connections to residents. Due to this, the Latino Power Fund helped build the capacity of smaller organizations interested in engaging communities about ARP funds.  

Similarly to what the LCF has recommended, Brookings scholars suggest government leaders prioritize outreach about federal funds to nonprofits in disinvested communities, in order to ensure greater access to these funds for smaller, grassroots nonprofits. They also emphasized the need for government officials to simplify application processes and ease reporting requirements. Government and philanthropic leaders should also consider providing technical support to community-based organizations to facilitate application processes. 

By enhancing nonprofit capacity, government leaders can achieve their program objectives, as nonprofits can increase public engagement and provide policymakers with valuable information when designing and implementing programs. With direct contact to residents trying to navigate government applications and systems, nonprofits can quickly identify and point out areas for government program improvement.  

Creating a systems navigator program is another example of a government-nonprofit partnership worth considering. Systems navigators, sometimes called “community navigators,” have been funded in other contexts to increase historically excluded groups’ participation in government programs. Systems navigators—who are often nonprofit staff or community members hired by nonprofits—work with government partners to understand the details of these programs and then help their communities access resources. System navigators can also relay information about what they see on the ground to key government stakeholders. 

Improve transparency and leverage the media where possible   

Residents’ trust in government is often strained, especially for groups that have been historically excluded from government programs. Making decisions without resident input often exacerbates tensions. In order to restore communities’ trust, government leaders need to provide clear and accessible information about programs, decisionmaking, and avenues for public participation. 

One possible way to hold local governments accountable if they lack transparency is by providing nonprofits with technical support for outreach to news media. For example, the LCF assisted the Imperial Valley Equity and Justice Coalition, a youth-led group in Calexico, in publishing an op-ed in their local paper about distributing ARP funds equitably. Another LCF partner, the Immigrants Are Los Angeles campaign, used the media to convince the Los Angeles County Board of Supervisors to invest ARP funds in immigrant communities. They participated in media interviews, held press conferences, rallies, and marches, and also used social media platforms, such as Instagram Live to publicize their efforts. As a result, they recently secured nearly $30 million of the county’s second tranche of ARP funding for immigrants. 

By strengthening local media and storytelling, philanthropic partners can also amplify community narratives and improve government accountability. As an example, the LCF funded the work of KBBF, a public radio station providing local public affairs programming in Spanish, English, and several Indigenous languages. KBBF has discussed ARP-related funding decisions for Northern California’s diverse communities as part of its programming.   

LCF Assignment, Gente Organizada  in Pomona, CA. May 24, 2022.
LCF Assignment, Gente Organizada in Pomona, CA. May 24, 2022. Photo credit: Bryan Patrick, LCF photographer

Using lessons from ARP for future community investments 

Through the LCF’s work, grassroots nonprofits were able to take advantage of this momentous opportunity and deploy ARP funds equitably and transparently. Local nonprofits have learned valuable lessons regarding federal and state funds. As a result, the same organizations that partnered with the LCF for ARP are now working to ensure equitable distribution of California state funds—specifically, the Community Economic Resilience Fund, which is aimed at promoting an equitable and sustainable recovery from the pandemic.  

Partners can also use these lessons to implement other federal initiatives, including those in the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act (IRA). For example, the LCF’s recommendations can be used to ensure IRA funds are directed to disadvantaged communities, including Latino or Hispanic communities, that have been burdened by high energy and environmental costs.  

As historic investments continue to flow in communities across the nation, government, philanthropic, and nonprofit leaders can use the LCF’s model and its lessons to ensure funds are distributed equitably and reach those most in need. 

Photo credit: Bryan Patrick, LCF photographer