At the beginning of 2020, the world experienced its worst pandemic in more than 100 years. In the United States, businesses effectively closed down for much of the year. This was especially devastating for arts organizations and artists; arts and cultural production fell by 6.4 percent when adjusted for inflation, compared with a 3.4 decline in the overall economy in 2020, according to data gathered by the Bureau of Economic Analysis for the Arts and Cultural Production Satellite Account.

In 2020, the NEA received $75 million through the Coronavirus Aid, Relief and Economic Security (CARES) Act to preserve jobs and help support organizations forced to close operations due to the spread of COVID-19. In 2021, the NEA received an additional $135 million through the American Rescue Plan (ARP). The NEA's ARP program provided funding through state and jurisdictional arts agencies, regional arts organizations, and local arts agencies—as well as directly to organizations across the country—to help the arts and culture sector recover, rebuild, and reopen.

In preparation for distribution of ARP funding, NEA staff worked with arts sector representatives to better understand the pandemic-related challenges and ways the NEA might assist. Based on the feedback from the field, NEA staff designed the ARP grant program to reach more diverse communities by encouraging new applicants and focusing on equity throughout the application process. The NEA organized a bold public engagement effort to reach more potential applicants, including 34 ARP funding and guidelines webinars/workshops hosted by arts and culture organizations and members of Congress, which represented a wide diversity of regions, artistic disciplines, ethnicities, and budget sizes, with select workshops offered with ASL and Spanish translation. More than 3,000 potential applicants participated in these events. And a social media campaign about NEA ARP funding was directed to reach underserved populations, with tweets garnering more than 300,000 impressions and Facebook posts over 1.4 million impressions

ARP funds were distributed in three phases: In April 2021, the NEA announced $52 million (40 percent) in ARP funding would be allocated to 62 state and jurisdictional agencies and regional arts organizations for subgranting through their respective programs. In November 2021, the NEA announced $20.2 million to 66 local arts agencies for subgranting to local arts organizations and artists. In January 2022, the NEA announced $57.8 million in grants directly to 567 arts organizations in both rural and urban communities; in all 50 states, Puerto Rico, the U.S. Virgin Islands, and Washington, DC; and representing all 15 of the NEA’s artistic disciplines. Of the applicants receiving funding through the grants to organization, 27 percent were new to funding from the NEA and 79 percent were small to medium-sized organizations (annual budgets less than $2 million).