COVID-19 Public Policy Proposals
Flow at the Federal, State, and Local Levels
With much of the country hunkered down in their homes, eyes have been focused on news programs and other screens to learn the latest about the multi-headed crises emerging from the coronavirus disease, COVID-19. Undoubtedly, many watched the attempts by the U.S. Senate over the weekend to craft a bill to help our nation through the three phases of COVID-19 we all face: response, relief, and recovery. This edition of Nonprofit Advocacy Matters provides the latest information about that bill in Congress, of course. But we all need to recognize that the vital policy work required won’t end with this one bill – every phase of these COVID-19-related crises will be inextricably intertwined with public policy challenges and opportunities.
That’s why we also direct your attention to three items beyond the immediate federal legislative action that are worthy of your focus. First, while the national media fixates on Congress and the White House, be aware of all the policymaking that affects your life – and the ability of nonprofits to meet their missions – that is occurring at the state and local levels. As reported below, more than 200 bills related to COVID-19 have already been introduced in state legislatures – and the states have hardly gotten started. Second, this edition also shows that lots of policy actions are happening in the executive branch, too, not just the legislative branch. Third, nonprofits must be ever-vigilant at all levels and branches of government to ensure not only that policymakers don’t leave nonprofits out, but also to make sure lawmakers get it right. For an example to spur you to action, read the story below about how the President and Treasury Department intended to postpone Tax Day for every individual and organization until July 15, but Treasury wrote the extension in a way that takes care of everyone else, yet left out most nonprofits.
This is not the time to engage in finger-pointing. Rather, it's just another signal that nonprofits must unite so we’re no longer ignored or dismissed. If you have not yet joined the state association of nonprofits in your state so you can learn about your state's policy actions related to the work of nonprofits, do so today. There is power in numbers. And grantmakers must step forward to provide nonprofits with adequate resources to be true advocates. Otherwise, nonprofits will get left behind - and everyone loses.
President and CEO
Negotiations Continue on $2 Trillion COVID-19 Economic Stimulus Bill
Senate and House negotiators continue in their sprint to reach agreement on a $2 Trillion stimulus bill designed to stop the economic hardship and freefall caused by the COVID-19 pandemic. The Senate Republican bill, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), calls for sending checks to most Americans, establishing an industry loan fund for airlines and other businesses, creating a generous small employer loan-to-grant fund that many nonprofits would be able to tap, and many other provisions. Democratic negotiators are seeking greater spending for unemployment and healthcare, and object to the industry loan fund, currently set at $500 billion, as a bailout or slush fund. Negotiations are ongoing and a resolution is expected, perhaps in the coming hours. For nonprofit key concerns, see next article.
Important Broad-Based Nonprofit Issues in Economic Stimulus Bill
Nonprofit advocates worked through the weekend delivering the message to Senators negotiating the stimulus bill that charitable organizations are on the frontlines of the pandemic delivering vital services, while suffering the consequences of an economy that has come to a halt. And unlike other closed businesses, nonprofits are in the position to reopen and hire idled workers to help our residents, communities, and economy recover. But they can do so only with resources. Here are the primary “asks” of Congress to fix the Senate bill to help get nonprofits back to work:
Support Lankford Amendment
The Senate CARES Act includes an above-the-line (or universal) deduction of $300, an amount that most nonprofits agree is insufficient to promote relief or recovery, let alone overcome the impact of the 2017 tax law. Senator James Lankford (R-OK) is seeking to offer an amendment during the Senate debate that would create for one year a deduction all taxpayers taking the standard deduction could claim of $4,000 per person and $8,000 per couple.
- Expressly provide charitable nonprofits with $60B in any emergency funding proposals. The charitable sector needs an immediate infusion of $60 billion and a mechanism must be constructed for a rapid infusion of cash to those organizations serving immediate needs in communities facing lost and declining revenue due to the pandemic.
- Create a robust universal charitable deduction and allow post March 1, 2020 donations to be claimed on 2019 and future tax returns. Incentives for immediate charitable giving would ensure a rapid infusion of cash to those organizations serving immediate needs in communities facing lost and declining revenue due to the pandemic.
- Ensure all nonprofits qualify for new, emergency small business loans: remove the Medicaid exclusion and 500 employee caps on nonprofits. SBA loans can be the best way for charities to rapidly access needed funds to sustain business operations. All charities should be eligible to receive up to $10m in business interruption loans as quickly as possible.
Congress Passes Social Supports, Paid Leave Law
In any other edition of this newsletter, this would be the biggest news: Congress passed, and the President signed, a $100 billion COVID-19 response bill last week that provides increased funding for numerous support programs and addresses employment matters related to the health disruptions caused by the disease. The Families First Coronavirus Response Act provides free testing for the disease, enhanced funding for unemployment and nutrition programs, and paid leave for employees unable to work. The leave provisions are complex, but generally require employers with fewer than 500 employees to provide two weeks of paid sick leave for employees ill or quarantined and 12 weeks of partially paid family leave for parents to care for a child whose school or day care is closed and the employees can’t telework. Learn more about the new law by reviewing the National Council of Nonprofits’ analysis.
Federal Executive Branch Responses to Coronavirus
- Tax Day Extended to July 15 – But not for most nonprofits: The President issued an Executive Order on March 13 instructing the Treasury Secretary “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency.” Treasury then issued Notice 2020-18 to automatically postpone the tax filing deadline from April 15, 2020, until July 15, 2020. But there is a major problem. The Notice expressly limits the relief as being “available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020.” Nonprofits file their annual taxes on Form 990, which the IRS website notes “is due on the 15th day of the 5th month following the end of the organization's taxable year. For organizations on a calendar year, the Form 990 is due on May 15th.” Therefore, without another fix, only nonprofits with a calendar year that ends on November 30 will enjoy the tax filing relief for every other taxpaying entity.
- Student Loan Payments Suspended: All borrowers “with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days,” according to the U.S. Department of Education. Secretary DeVos directed all student loan servicers to grant an administrative forbearance for any borrower who makes a request online or by phone, beginning March 13. But beware: If a nonprofit employee (or other person) is participating in the Public Service Loan Forgiveness program, then using the forbearance option or paying less than is owed may not count as making your required monthly payments. Additional protections and forgiveness for borrowers are being negotiated as part of the economic stimulus bill, which would remove this concern. See Coronavirus and Forbearance Info for Students, Borrowers, and Parents for more information.
- OMB Relief: Federal Grants Flexibility: The federal Office of Management and Budget has issued instructions allowing federal agencies to grant exceptions under the OMB Uniform Guidance to apply to virtually all federal grants and the nonprofits that perform under the rules. New OMB Memo M-20-17 authorizes federal agencies to remove administrative impediments and encourages flexibility in processing renewals of grants, allows looser reimbursement and purchasing standards, and more. The document provides additional relief for extensions of federal reporting deadlines, indirect cost rate negotiations, allowability of travel and other cancellation costs, Single Audits currently due, and more. While there is no guarantee that all federal agencies will authorize such flexibility, the Memo is grounds for nonprofits to seek continued payments for salaries and facilities and administrative costs even if they are not currently operational.
Deadline on .org Sale Delayed to April 20
After holding a ten-day "public engagement" period, which consisted of allowing .org registrants to answer eight leading - and misleading - questions, the private equity firm seeking to convert the nonprofit Public Interest Registry to a for-profit entity agreed to extend the deadline for ICANN to decide whether to allow the registry transfer to April 20. In the meantime, a group of Members of Congress sent a letter officially calling for the sale to be blocked and UNESCO raised additional concerns.
Census: Be Counted, Don’t Wait
The 2020 Census has begun. Households are receiving invitations to complete the 2020 Census online, by phone, or via paper questionnaire. Join the more than 18.6 million households that have already participated! The U.S. Census Bureau has announced it is suspending operations until Apr. 1, 2020 and the deadline for counting everyone has been pushed back to Aug. 14. The suspension has not affected online or phone enumeration but rather reduces the number of in person-to-person interactions the Bureau normally conducts. Everyone can – and should – continue to fill out their Census form despite the delays. Doing so will eliminate pressures on Census Bureau workers to follow-up in person and nonprofits working to get out the count. As our friends at Alaska Counts remind everyone, “It’s never been easier to fill out the form from your couch!” Be safe. Be Counted.
- U.S. Census 2020 Resources, National Council of Nonprofits
- Census Resource Library, Census Counts Coalition
- State-by-State Resource Map, Census Counts Coalition
- Video Guide to Completing the 2020 Census Online (9:25), U.S. Census Bureau
- 2020 Census Jobs, U.S. Census Bureau
- Response Outreach Area Mapper, U.S. Census Bureau
- U.S. Census 2020, Feeding America
- Census Protection Hotline Partner Toolkit, Lawyer's Committee for Civil Rights Under Law
- 2020 Census Toolkits for 211s, Local United Ways, & Partners, United Way Worldwide
2020 Census Calendar
- Mar. 23: Self-response begins via online, by phone, or by mail
- Mar. 30-Apr. 1: Households receive reminders to respond. The U.S. Census Bureau, in collaboration with many nonprofits, will begin counting people experiencing homelessness
- Apr. 1: Census Day
- Apr. 8-16: Final postcard reminders mailed along with paper questionnaires
- May 28: Census enumerators begin conducting door-to-door canvassing of households that have not responded
- Aug. 14: End of non-response follow-up
COVID-19 State Policy Action
All fifty states and the District of Columbia have declared states of emergency. Normally, 37 state legislatures would be in session at this time, but due to the coronavirus pandemic, 11 have adjourned for the year and at least 21 have postponed or stopped legislative business completely. More than 200 pieces of legislation regarding the emergency declarations, response, and containment of COVID-19 have been introduced since the outbreak of the pandemic.
Funding and Other Benefits
Several legislatures are acting quickly to address the many health and economic challenges emerging from the spread of COVID-19. California lawmakers approved an immediate $500 million in disaster response for the COVID-19 pandemic to fund emergency expenditures tied to the Governor’s Declaration of Emergency and authorized additional appropriations in increments of $50,000,000 after the Director of Finance notifies the Legislature, up to a total appropriation of $1,000,000,000. The Washington DC City Council approved legislation (B23-0718 and B23-0719) that establishes a new public health emergency small business grant program and expands eligibility for Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program (commonly referred to as SNAP or food stamps), and homeless services. Additional flexibility is provided for hospital budgets, education requirements, and public meetings. The new laws also prohibit price gouging and stockpiling, disconnection of certain utilities, and eviction. In Vermont, a pending bill would permit the Secretary of Human Services to modify, waive, or postpone hospital assessments, provide more access to health care for vulnerable populations, and undergo emergency rulemaking due to COVID-19.
Policymakers in the Northeast are looking to expand unemployment insurance and other protections for employees directly impacted by COVID-19. In Massachusetts, a pending bill would expand unemployment insurance for all employees who are directly impacted by the COVID-19 state of emergency declarations of March 2020. Legislators in Vermont are considering extending unemployment insurance benefits to individuals voluntarily separated from an employer to care for a family member diagnosed with COVID-19, relieving the employer of the cost of benefits for four weeks under certain circumstances, and requiring the employer to rehire the individual afterwards. In New Jersey, a bill would prohibit an employer from terminating or penalizing an employee who requested or took time off under certain conditions related to the pandemic emergency declared by the Governor. Another bill would establish a temporary program to provide relief to individuals who have lost wages as a result of the crisis and to employers who pay wages to workers who are ordered under quarantine. A pair of bills pending in New York (A.10152 / A.10153) would set sick leave requirements for employees, adjusting the paid or unpaid requirements as well as the number of days provided based on the size of the for-profit or nonprofit employer.
The Washington, DC City Council expanded unemployment compensation and medical leave during a public health emergency. Employees may qualify if they are quarantined or isolated under directives from a government agency or medical professional, their employer closes, or they are under self-quarantine or self-isolation for good cause. With the North Carolina General Assembly not currently in session, Governor Roy Cooper issued two executive orders to assist with the public health and economic crises caused by the COVID-19 pandemic. Among other things, the new executive order eases access to unemployment insurance (UI) benefits for individuals who are out of work due to the public health measures necessary to contain the spread of COVID-19. Specifically, the executive order waives both the one-week waiting period for UI benefits and the requirements that individuals must be actively seeking work to be eligible. It also holds employers (including nonprofits) harmless for UI claims related to COVID-19 by not charging these claims to their accounts. This appears to be true for most nonprofits and their employees except for individuals who lose their jobs at religious nonprofits and nonprofits with fewer than four employees, since these organizations are generally exempt from providing UI benefits. The NC Center for Nonprofits is working with the state on a solution to allow these nonprofit workers to access UI benefits during the COVID-19 crisis. See related article, below.
Self-Insured Nonprofits and Unemployment Insurance
States have seen an enormous spike in unemployment resulting from layoffs in the business and nonprofit sectors due to the economic ramifications of the COVID-19 crisis. As many businesses and nonprofits across the country are forced to make difficult decisions about whether to continue paying some or all of their employees, Congress and state governments are taking steps to: (a) provide for temporary expansion or extension of UI benefits; (b) offer faster access to UI payments for laid-off workers; and (c) prevent unemployment tax rates from spiking for businesses and nonprofits that pay the state unemployment tax. While these solutions are essential steps to prevent further hardships for many individuals, businesses, and nonprofits, they raise two important questions for nonprofits that self-insure: Who is covered and who pays for the benefits? Read the full article on unemployment insurance by David Heinen, North Carolina Center for Nonprofits.
Other State Policy News
Nonprofit Property Tax Assessments Reconsidered
Connecticut lawmakers, who have a history of trying to chip away at nonprofit property tax exemptions, are currently moving a new bill to provide greater fairness to nonprofits. The legislation would require tax assessors to consider the status of property owned or held in trust by charitable nonprofits that are exempt from federal income tax and require those assessors to include the status in their records as well as publicly post a statement regarding all charitable nonprofit property tax exemptions. The CT Community Nonprofit Alliance explained the need for the bill in an action alert, “Property owned or leased by a nonprofit and used for charitable purposes is exempt from property taxes, but recently, many assessors have denied exemption applications. Critical funding is diverted away from direct service provision to people in need when nonprofits, burdened by years of state budget cuts, are forced to choose between costly litigation and paying taxes on property that is exempt by state law.”
Maryland Enacts Significant Grants Reform
Nonprofits in Maryland are celebrating the passage of significant grants reforms that will align state rules very closely to those in the federal OMB Uniform Guidance, including the mandates to reimburse nonprofits for the indirect costs they incurred while doing work on behalf of government. The legislation establishes the Maryland Efficient Grant Application Council to monitor, report, and make recommendations on state grants life cycles, applications, and recipients. It calls for nonprofit input, requires regulations on a uniform grant application form, financial controls and reporting requirements, and performance progress reporting requirements that are consistent with the OMB Uniform Guidance to the greatest extent practicable.
Twitter in the Time of COVID-19
In every crisis, brilliance and creativity shine. Such positive attributes of the human condition are shining brightly in advocacy efforts to secure needed relief and improvements to the stimulus bill under negotiation in the Senate this past weekend. Here is a colorful sampling:
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.