But financing alone is not enough to ensure that these communities have access to these opportunities. To increase access in DACs, it is critical that the national-level awardees and the local community-based lending institutions build trust within communities and offer financing products that work well for them.
Increasing access means building flexibility into financial products to meet community needs, for example, providing low-cost loan terms or using repayment history instead of a credit score when making loan decisions. It can also mean offering products in multiple languages and providing more education around loan products through trusted community-based partners. To maximize opportunities under the fund, GGRF lenders should work collaboratively with CBOs to build their relationship with the community, identify community projects, and maintain an ongoing dialogue about community priorities and how financial products can serve those priorities.
Applications for the GGRF are open to nonprofit lending institutions now and close in the fall of 2023. Although local lending institutions are unlikely to be the direct recipients of these funds, they may be able to partner with or receive capital and technical assistance from the nonprofit lending institutions that are awarded funding. Money will be competitively awarded by the EPA by September 2024.
Direct funding from IRA programs and partnership opportunities
Another way to take advantage of the IRA is by applying directly for funding or partnering with an eligible entity in order to receive funding. Here are a few programs that nonprofit CBOs can apply for under different categories:
Combat air pollution and improve community resilience
The Environmental and Climate Justice (ECJ) program is one of the landmark opportunities within the IRA because it provides funding directly to community groups to advance climate equity priorities. This $3 billion funding opportunity supports initiatives that reduce air pollution, mitigate climate and health risks, improve community resilience (such as protection from extreme heat and wildfires), and advance environmental justice. CBOs can apply for funding directly or partner with their local government or another eligible entity to collaborate on a program. In addition to the funding, this program also has set aside $200 million to offer technical assistance. Funding for this program is expected to open this fall, but eligibility criteria is available now.
Reconnecting communities through transportation access
DACs have too often been impacted by a lack of transportation investment and/or affordable transportation options in their communities. Historically, racist government and urban planning practices have led to the construction of interstate highways and freeways that have divided cities and cut off low-income communities and DACs from urban centers, economic opportunities, education, and other essential services. The Neighborhood Access and Equity Grant (NAE) aims to reconnect neighborhoods that have been cut off by historic investments by improving walkability and safety, increasing access to affordable transportation options, and reducing barriers to connectivity. This $3.15 billion program is part of a larger program called Reconnecting Communities and Neighborhoods (RCN), which provides $3.53 billion to advance community-centered transportation projects. Funding can be used for capital construction, community planning, and to support regional partnerships. Nonprofit CBOs can partner with their local government, a Metropolitan Planning Organization, or another eligible entity to apply for this opportunity. The Notice of Funding Opportunity was recently released and combined with the Reconnecting Communities Pilot (RCP) program, a $1 billion funding opportunity under the Bipartisan Infrastructure Law, also focused on reconnecting neighborhoods.
Urban tree canopy
Urban tree cover is an important strategy to reduce urban heat island effect, improve walkability, and provide shade and cooling for neighborhoods. A recent analysis showed that neighborhoods with a majority people of color have on average 33 percent less tree canopy cover compared to majority white neighborhoods. That difference is even larger in the poorest communities (41 percent less coverage) compared with the wealthiest communities. The Urban and Community Forestry Assistance program, administered by the U.S. Department of Agriculture’s Forest Service, will provide $1.5 billion in funding for tree-planting projects to increase and maintain a healthy tree canopy in urban spaces, especially in DACs. The program provides funding to states, local and tribal governments, CBOs, nonprofits, and other partnerships. Funding is available now through 2031.
The IRA represents an unprecedented opportunity to use federal funding resources to advance DAC priorities around clean energy and transportation, and to address environmental and climate justice issues that have impacted DACs and low-income communities for so long. But it’s only if we work together—local governments with frontline communities, CBOs, and environmental justice partners—that we will be able to fully take advantage of this historic moment and realize the benefits in the communities that need it the most.