Federal Grant-making Program for Nonprofits Supporting Minority Businesses

Faegre Drinker Biddle & Reath LLP

A grant-making program providing federal grants to support nonprofits providing services to minority business enterprises was included in the Infrastructure Investment and Jobs Act that President Biden signed into law on November 15, 2021 (the Act).

The grants are intended to permit certain tax-exempt organizations (including those described in 501(c)(3), (4), (5) or (6)) to continue to support the development, growth, or retention of minority business enterprises. For purposes of the program, “minority business enterprise” is defined as a business enterprise (whether nonprofit or for-profit) that is majority owned and managed by one or more individuals who has been subjected to racial or ethnic prejudice or cultural bias because of the identity of the individual as a member of a group (to presumptively include individuals who are Black, Hispanic, Latino, American Indian, Alaskan Native, Asian, Native Hawaiian or other Pacific Islander).

The details of the program, including the application process and identification of the particular office within the Department of Commerce that will administer the program, have not yet been established. The Act, however, does specify that eligible recipients are those nonprofits who can demonstrate that providing services to minority business enterprises, whether through education, making grants or loans, or other similar activities, is a primary activity of the organization. In addition, the Act specifies that procedures established for the program should ensure that grants are made to a diverse array of eligible entities, which may include both national and community-based organizations, those with annual budgets below $1 million, and those that principally serve low-income and rural communities.

We will be continuing to monitor this program as it develops. If you think your organization may qualify for this program or you would like to engage with decision makers as the program is developed, we encourage you to reach out to your primary Faegre Drinker contact. We can help you to stay up-to-date on developments and opportunities for comment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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