Consolidated Appropriations Act Increases Funding to Nonprofits

On December 29, 2022, the President signed the Consolidated Appropriations Act, 2023 (CAA, 2023) into law as Public Law 117-328 (the “Act”). The Act contains 12 fiscal year appropriation bills totaling $1.7 trillion in spending.

The following are some of the major provisions of the Act affecting nonprofits:

1. Increased funding for Child Care and Head Start
   • The Act includes $8 billion for the Child Care and Development Block Grant (CCDBG) program, providing financial assistance to low-income families to access childcare. This marks a 30% increase in funding
   • The Act includes $12 billion, more than an 8% increase, for Early Head Start and Head Start
2. Investment in homelessness prevention and affordable housing
   • The Act provides $6.39 billion for economic and community development activities, with $3.3 billion available for carrying out the Community Development Block Grant (CDBG) program.  This is an increase of $1.5 billion, benefiting low- and moderate-income areas and people
   • The Act increased the Homelessness Assistance Grants (HAG) account to $3.63 billion, a 13.1% increase to the program, funding a wide variety of homeless services and housing initiatives
3. More resources for children’s mental health and substance abuse services for children and schools
   • The Act allocates funding grants to communities and community organizations that meet criteria as certified community behavioral health clinics
   • The Act reauthorizes the community health services block grant and substance use and prevention, treatment, and recovery block grant
   • For more insights consider reading Health Care Funding in the 2023 Consolidated Appropriations Act
4. Nutrition assistance
   • The Supplemental Nutrition Assistance Program (SNAP) increased by $13.4 billion, with a total of $28.5 billion for child nutrition programs and $6 billion for the Special Supplemental Nutrition Program for Women, Infants and Children
   • The Act allocates $40 million to establish a permanent summer EBT (Electronic Benefit Transfer) program for families with children eligible for free or reduced-price school lunches

Despite the significant funding to the nonprofit sector as described above, the law unfortunately didn’t address other priorities for the nonprofit community. The Act does not restore three charitable giving incentives that expired in 2021, nor did it restore eligibility for the Employee Retention Tax Credit and the enhanced refundable child tax credit. The new federal law does, however, include many significant changes to the U. S. retirement system.