Private Nonprofit Eligibility for Public Assistance

Private nonprofit (PNP) organizations are the main kind of non-government applicant that can receive FEMA Public Assistance directly. FEMA's Public Assistance Program and Policy Guide (PAPPG), the main source for this page, describes a three-part test: the organization has to be an established private nonprofit, it has to have owned or operated an eligible facility at the time of the incident, and that facility has to provide an eligible service. All three parts have to be met, and the service part carries the most weight, because it decides whether the nonprofit has to apply for a Small Business Administration loan before FEMA funds permanent repairs.

The organization

FEMA's regulations describe a private nonprofit organization as a non-government entity that holds a current tax-exemption ruling from the Internal Revenue Service under the relevant parts of the tax code, or satisfactory evidence from the state that it is a non-revenue-producing nonprofit organized or doing business under state law; The PAPPG adds that the ruling must have been in effect on the declaration date. An organization that does not have to obtain that status can show its organizing documents instead, with a certification that it meets the federal and state requirements. For-profit companies are not eligible applicants, although a government can hire them to carry out eligible work and seek reimbursement itself.

The facility

The Stafford Act and FEMA's regulations describe the kinds of facility that qualify: educational, utility, emergency, medical and custodial care facilities, center-based childcare, irrigation and rehabilitation facilities, and other facilities that provide essential social services to the general public — a group the statute illustrates with museums, zoos, performing arts facilities, community centers, libraries, homeless shelters, senior centers, food banks, broadcasting facilities and houses of worship. The statute says that a house of worship is not excluded because its membership is limited to people of a shared faith, and that religious facilities are eligible without regard to their religious character.

The nonprofit may own or operate the facility. Where one eligible nonprofit leases a facility to another, FEMA's guide looks to which party has the legal responsibility to maintain it. The guide evaluates each building on its own, even when several share the same grounds.

Critical and non-critical services

FEMA's guide sorts eligible services into two groups. Critical services, as the Stafford Act describes them, include power, water, sewer and wastewater treatment, communications, education and emergency medical care; the guide groups them as education, emergency medical, utility and emergency services, and counts the administrative and support facilities those services depend on, such as a school's kitchen, dormitories or parking. Non-critical but essential social services are the second group: community centers, childcare, custodial care, food banks, low-income housing, homeless shelters, houses of worship, libraries, museums, senior centers, zoos and performing arts centers, among others. With a few exceptions the guide names, the administrative and support facilities of non-critical services are not eligible.

A facility providing a non-critical service also has to serve the general public. The guide describes what that means — use not limited to a set number of people, to a group with a financial interest in the facility, or to an unreasonably restrictive area; no gates or security meant to keep the public out; and membership fees, where there are any, that are nominal and waived for those who cannot pay — while recognizing that some facilities, such as senior centers, childcare and houses of worship, serve a limited group by their nature and still count. The guide also lists services that are not eligible, among them facilities established or primarily used for political, athletic, recreational or vocational activities, conferences or retreats, as well as cemeteries, camps, and docks and piers.

The SBA loan step

Under the Stafford Act, FEMA may fund the repair or replacement of a nonprofit facility that provides a critical service without an SBA loan application. For a facility that provides only non-critical services, the owner or operator first applies to the U.S. Small Business Administration for a disaster loan and receives a determination; FEMA then funds the permanent work the loan does not cover. FEMA's guide applies this to permanent work only — emergency work, such as debris removal and emergency protective measures, does not call for an SBA application — and a facility that provides a critical service is exempt even if it also provides non-critical ones.

The guide describes the consequences of the SBA step in some detail: both agencies have application periods, a nonprofit that misses the SBA application deadline, including any extension the SBA granted, loses eligibility for permanent work, and one that declines a loan it was offered has its Public Assistance limited to the costs the loan would not have covered. Insurance proceeds cannot be duplicated by either agency.

Mixed-use facilities

Where a facility provides both eligible and ineligible services, FEMA's guide looks at primary use — whether more than half of the physical space, leaving out common areas, is dedicated to eligible services. If it is, the facility is eligible and FEMA prorates funding by the share of space the eligible services use, provided the applicant restores the whole facility; if it is not, the facility is ineligible. A room used for both counts as eligible space only when eligible services take up most of its operating time. The guide treats irrigation and public broadcasting facilities differently, and it does not run the test between critical and non-critical services, only between eligible and ineligible ones. A shared facility is eligible when the nonprofit owns most of it and dedicates most of it to eligible services.

What the PAPPG asks a nonprofit to show

With its Request for Public Assistance, FEMA's guide expects a nonprofit to show its tax-exemption ruling or the state or organizing documents described above; proof that it owns the facility, or a lease that makes it responsible for repairs; and a description of the services provided in the damaged facility, when and to whom. Membership organizations add their membership and fee policies, childcare facilities their state license, schools their accreditation or state recognition, and mixed-use facilities evidence of their established purpose. Emergency work is narrower for nonprofits: as a rule it is limited to protecting an eligible facility and its contents, because emergency services to the community are a government's responsibility. Our page on the four building blocks of eligibility describes the framework that applies to all applicants.