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Do Private Nonprofit Organizations Qualify for FEMA Reimbursement?

During this pandemic, many nonprofit organizations are trying to understand if they qualify to receive reimbursement from FEMA.  Here are a few things to consider if you work for a nonprofit or sit on a board of a nonprofit.

What is the criteria to be an eligible private nonprofit for FEMA reimbursement?

To be an eligible private non-profit/nonprofit (PNP) applicant for FEMA reimbursement, the PNP must show that it has:

  • A current ruling letter from the U.S. Internal Revenue Service (IRS) granting tax exemption under sections 501 (c), (d), or (e) of the IRS code of 1954, OR
  • Provide documentation from the State showing it is a non-revenue producing, nonprofit entity organized or doing business under State law.

How do you determine if a facility is considered eligible?

In addition, prior to determination of eligibility, FEMA must first determine if the PNP owns or operates an eligible facility. For PNPs, an eligible facility is one that provides an eligible service as determined below:

  • Facilities that provide a critical service, such as education, utility, emergency, or medical.
  • A facility that provides a non-critical but essential governmental service AND is open to the general public. PNP facilities generally meet the requirement of being open to the general public if all of the following conditions are met:
    • Use of the facility does not limit any of the following:
      • A certain number of individuals
      • A defined group of individuals who have a financial interest in the facility, such as a condominium association
      • Certain classes of individuals
      • An unreasonably restrictive geographical area, such as a neighborhood within a community
    • Access to the facility is not prohibited with gates or other security systems
    • Any membership fees meet all of the following and are:
      • Nominal
      • Waived when an individual can show inability to pay the fee
      • Not of such magnitude to preclude such use by a significant portion of the community
      • And do not exceed what is appropriate based on other facilities use for similar services

What information do nonprofits need to provide FEMA?

In cases where the facility provides multiple services, such as a community center, FEMA reviews additional items to determine the primary services that the facility provides. Those items are:

  • IRS documentation
  • Pre-disaster charter, bylaws, and amendments
  • Evidence of long-standing, routine use, such as a calendar of activities

It is important to note that facilities that are primarily in place for political, athletic, religious, recreational, vocational, or academic training, conference, or similar activities are not eligible.

Private entities, including for-profit hospitals or restaurants, are not eligible for assistance from FEMA under Public Assistance. However, state, local, tribal, and territorial government entities may contract with private entities to carry out eligible emergency protective measures. In these cases, FEMA will reimburse the eligible applicant for the cost of eligible work, and the applicant will then pay the private entity for the provision of services.

If you have questions on eligibility and would like to talk to our emergency management team leader, you can email Steve Stevens directly at sstevens@thf-cpa.com or our not-for-profit team leader, Allison Harrell, at aharrell@thf-cpa.com.  Our team can help walk you through the intricacies of this type of reimbursement.

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