American Rescue Plan in Action: Leveraging Flexible Funding and Community Engagement for Equitable Recovery
Learning from Legacies: From Basic Needs to Systems Change
In national emergencies, the federal government provides short-term funding to stimulate the economy and alleviate the fiscal struggles that states and municipalities face. The American Rescue Plan (ARP) accomplished this through direct cash payments and child tax credits, emergency rental assistance, vaccination resources, and other immediate financial relief. However, funding alone does not build capacity or resilience that spans jurisdictional boundaries. One of the greatest challenges in ensuring an inclusive recovery is coordination of the fragmented, cross-sectional policies and institutions like urban planning, community development, education, and public health that shape growth and prosperity.
Federal grant programs often fund status-quo approaches and organizations, like Title I Education Grants or Federal Transit Formula/Block Grants. This is likely because it protects their base of power, or because they lack time and resources to research more innovative spending opportunities through competitive grants. Most dollars flow from the federal government to state governments to disseminate across the state. A limitation of this is that states often prioritize urban and economic centers and neglect small towns and rural communities. It’s helpful when funding is directed to municipalities or local actors like universities, nonprofits, or businesses, but in this case, it is often without incentive or requirement to collaborate. This can create competition where collaboration is needed the most: to save lives, jobs, and communities. The ARP transitions away from traditional federal funding practices through its flexibility, emphasis on community engagement, and multi-year timetable. The ARP offers an opportunity for innovation and input from local leaders, a need that has never been greater.
Looking forward, advocates can and should help policymakers take full advantage of the flexibility of ARP. Policymakers tasked with spending ARP funds should seek input from constituents to maximize community benefits, particularly in low-income and BIPOC communities. Black and African-Americans and Hispanic/Latinx individuals are disproportionately undercounted in the U.S. Census, which is used for many funding formulas; righting these wrongs requires critical self-examination by cities. True accountability comes from input and engagement with people and communities who have historically been the most harmed and neglected by government-funded policy.
Community Engagement Strategies for Co-Creation of ARP Spending Plans
The ARP legislation and subsequent Department of Treasury guidelines have called out the urgent need to “build the capacity of community organizations to serve people with significant barriers to services, including people of color, people with low incomes, limited English proficient populations, and other traditionally underserved groups.” Municipalities should focus outreach efforts on these communities to increase awareness about eligibility for resources and inspire organizations to request funds.This recovery is intended to address systemic, socioeconomic barriers faced by populations who have been historically marginalized and who were disproportionately impacted by COVID-19. Community engagement should be rooted in an understanding of decision-making power, lived experiences, and diverse perspectives and learning styles. Community action agencies, faith-based organizations, and religious institutions are particularly well-positioned as partners to reach vulnerable communities. The ARP can change the trajectory of disadvantaged communities by facilitating capital access and opportunities not just in response to COVID-19, but in the long run.
Community engagement is no longer optional for funders—it is required. The Treasury explicitly requests that grantees “describe how [their] jurisdiction’s planned or current use of funds incorporates written, oral, and other forms of input that capture diverse feedback from constituents, community based organizations, and the communities themselves.” Collecting information and data is not enough to create stronger, healthier communities; the process requires meaningful, consistent community input. This could entail posting an online feedback form, holding listening sessions and town halls, and creating a hotline for suggestions, all of which can be used to categorize and score residents’ priorities. Localities should create multiple, linguistically inclusive channels for input, and weight results by demographics to ensure that the loudest voices are not the only ones being heard. Throughout this process, localities should consider the spectrum of community engagement: the goal is to move from marginalization to ownership, which is characterized by consensus-building, participatory based budgeting and research, and equity.
As with all funding opportunities of this size and consequence, transparency and accountability are paramount. Communities must align spending priorities with residents’ values to create a set of local ARP recovery priorities, indicators, and performance measures. Conducting an equity and community needs assessment can help jurisdictions assess the actual or anticipated effect of proposed policies, institutional practices, and budget decisions. Throughout the funding period, data about impact and need should be shared publicly by funders and grantees to build trust and facilitate community mobilization.
ARP in Action
The $350 billion allocated to state and local governments is almost entirely up to local discretion, and communities across the country are evaluating community needs, applying an equity lens, and prioritizing accordingly. Localities are not subservient to states; they receive their own funding to invest in solutions that are tailored, creative, and scalable. Many cities and states have already begun to do so:
Evanston, Chicago: The first material action on reparations in the country, Evanston’s Restorative Housing Program will offer $25,000 grants to Black residents to alleviate harm caused by discriminatory housing policies.
Birmingham, Alabama: The Birmingham Service Corps, a public-private partnership employs predominantly residents of color to meet vital community needs like screening public housing residents for symptoms and staffing testing centers. Its second phase trains members for future jobs in the healthcare field as community health and wellness advisors.
Fresno, California: DRIVE (Developing the Region’s Inclusive and Vibrant Economy), a multisector partnership to establish a 10-year vision with 19 initiatives, metrics, and community input rooted in addressing the city’s economic and racial inequities. DRIVE uses specific language, professionally-facilitated conversations and focus groups, and clear targets for investment.
The City of San Antonio, the Commonwealth of Virginia, and the State of Maine have contracted with community organizations to reach target populations in need of Emergency Rental Assistance. They created eligibility self-assessments, marketing toolkits and user guides, and held meetings with community members and stakeholders to make sure relief efforts were effective in reducing homelessness.
Michigan: With ARP funding, Michigan launched Future for Frontliners to send essential workers who worked throughout the pandemic to community college, tuition-free. Additionally, the Michigan Reconnect program lowered its age-eligibility from 25 to 21, funding tuition-free community college for residents who do not have college degrees.
Cities like San Francisco, Seattle, New Orleans, and the state of Rhode Island created specific digital equity initiatives to expand access to free and low-cost devices in high-need communities, publicize public Wi-Fi access points, and partner with public agencies to expand and advertise low-cost internet options.
Stepping into Stewardship: How Leaders Can Leverage Funds
Stewardship is best achieved through cross-sector collaboration that identifies shared values, centers equity, and promotes multi-solving. Government stewards who are responsible for allocating ARP dollars need to partner with businesses, nonprofits, and local leaders to design strategic programs and deliver services. There is no single national formula that determines the percentage of state and local fiscal recovery funds used to support community initiatives. Thus, recipients should provide a request that demonstrates how the funding amount aligns with ARP mandates, how the pandemic has affected the respective organization or individual, and an estimate of funding needed to address harms. All requests should ensure that the funding plan aligns with ARP deadlines—funds must be obligated and requested by December 31, 2024, and the deadline for local spending is December 31, 2026.
The ARP calls all of us into stewardship to revitalize our communities. As municipalities, elected officials, and nonprofits face the unprecedented opportunity to address community needs, many may question where and how to begin. First, ensure that you have a seat at the funding table by contacting City Managers, Planners, and any officials with whom you have a relationship. In seeking state funding, you should also inform your Senators and U.S. Representative about your work and ask for assistance in accessing ARP dollars. At a state and local level, ask executives to reserve some fiscal relief funds to specifically support community initiatives and constituents. Form broad-based coalitions to leverage multiple parts of the ARP funding while partnering with state and local leaders. Identify and request to meet with leadership of state and local administrative agencies to share your work and request funding.
This year has brought greater receptivity among political and civic leaders for centering equity in initiatives and embracing new approaches to change. Sustained recovery requires systems change, and it is constantly shaped by experience, relationships, leadership, and credibility. Recovery is also highly contextual; for cities plagued by flooding and hurricanes, it could mean investing in treatment facilities and improving stormwater systems. For tribal nations, recovery may mean reducing the digital divide by investing in broadband infrastructure. A regional strategy for recovery and renewal allows a variety of organizations and people to feel ownership of a shared vision.
To advance equity through the ARP, communities and policymakers must collaborate to make high-impact investments, engage underserved communities, track data and ensure accountability, and restore and expand public services. These steps can ensure that the ARP is more than a brief stimulus, it is a transformation of future economies, communities, and lives.