Nonprofits: Take Action
Senators Need to Act. Now!
The House acted last week by passing COVID-19 legislation to address immediate needs and stimulate the economy. While no one expects the Senate to accept the bill as written due to its $3 trillion price tag and partisan provisions, the HEROES Act contains many bipartisan solutions important to charitable nonprofits and their ability to provide immediate relief and recovery in their communities. Some in the Senate prefer to take a wait-and-see approach to legislating – as in waiting to see if past stimulus provisions provide sufficient relief – while also insisting on including their own controversial components in future legislation. Nonprofit organizations and the people we serve literally cannot afford yet another partisan standoff that not only delays truly essential lawmaking, but also increases personal suffering and harm to the economy.
Contact your U.S. Senators – Democrats and Republicans alike – and tell them that the lives and livelihoods of their constituents are much more important than partisan posturing. Urge them to start with the bipartisan provisions enabling nonprofits to serve our communities, and to build a bill that addresses essential needs and promotes the health of our residents and the economy. Take Action Today! and connect with your Senators. For the sake of your mission and the people you serve.
The Views of Congress on COVID-19 Relief Legislation
The House passed a $3 trillion package on Friday night on a largely party-line vote. The “Health and Economic Recovery Omnibus Emergency Solutions Act” (H.R. 6800), known as the HEROES Act, would provide significant funding for state, local, and tribal governments, a second round of cash payments to individuals and citizens, and additional resources for numerous social support programs. The bill incorporates several bipartisan provisions and improvements sought by the charitable nonprofit community, such as creating a nonprofit track in the Paycheck Protection Program (PPP) to ensure funding for nonprofits of all sizes and types, including lifting the 500-employee cap; establishing a loan program for nonprofits of up to 10,000 employees, with loan forgiveness available to some; expanding the Employee Retention Credit; and making technical corrections to the CARES Act to make clear that self-insured nonprofits are not required to immediately reimburse states for 100 percent of the unemployment benefits paid to former employees. However, the bill fails to expand charitable giving incentives or provide sufficient unemployment relief to self-insured nonprofits. See the statement from the nonprofit coalition and our analysis of the HEROES Act.
Republican leaders in the Senate declared the HEROES Act a “non-starter” and “dead on arrival” before the bill was introduced earlier in the week, and the White House issued a veto threat on the day of voting. Senate Majority Leader McConnell (R-KY) has said he doesn’t see the urgency to pass a big stimulus bill and the Senate is scheduled to leave DC at the end of this week, not to return until June. The House may remain out of town for an extended period, but working and voting remotely, per a new proxy voting protocol it adopted on Friday. Two of the major issues delaying action are funding of state and local governments and providing liability relief for businesses that reopen. Without a public outcry for action, a stalemate over those two issues could drag out negotiations and delay needed relief for months.
Senate and House Support for Nonprofit Priorities
Many Senators and Representatives are not waiting for party leaders to negotiate what’s in the next COVID-19 legislation; they are introducing their own ideas for supporting the work of charitable nonprofits in communities.
- Lankford/King Letter to Senate Leadership: Nonprofit policy priorities received strong bipartisan support in a recent letter to Senate leadership led by Senators Lankford (R-OK) and King (I-ME). The letter calls for expanding nonprofit access to relief and support, increasing unemployment insurance reimbursement, and strengthening charitable giving incentives. Announcing the letter in a news release, Senator Lankford stated, “When people across the country are hurting, nonprofits step up to meet their needs — no matter the circumstances or the challenges.” Senator King continued, “Losing these groups would be a gut punch to our families, our communities, and our economy — hat’s why Congress must support nonprofits in the next coronavirus relief package.” The Lankford/King letter to Senate leadership is truly bipartisan, having been signed by 30 Senators – 15 Republicans, 14 Democrats, and one Independent. Nearly 60 national nonprofits also endorsed the Lankford/King letter.
- WORK NOW Act: Senators Klobuchar (D-MN) and nine Democratic Senators introduced S. 3747, the Work Opportunities and Resources to Keep Nonprofit Organizations Well Act (the WORK NOW Act). The bill would inject $50 billion into frontline nonprofits to generate employment for laid-off workers from other industries and to address the skyrocketing needs in communities for COVID-19 relief and recovery. In introducing the bill, Senator Klobuchar, said in a statement, “We need to help charitable nonprofits keep their doors open, scale their invaluable services, and provide opportunities for unemployed men and women to return to work serving their communities.” News releases by the Delaware Senators and Oregon Senators feature quotes from state association leaders in their states. The following Democratic Senators cosponsored the bill: Blumenthal (CT), Brown (OH), Carper (DE), Coons (DE), Duckworth (IL), Markey (MA), Merkley (OR), Schatz (HI), and Wyden (OR).
- Extending PPP Covered Period: Senator Manchin (D-WV) introduced a bipartisan bill last week to extend the time Paycheck Protection Program borrowers can take to spend their loans – from eight weeks to 16 weeks. The Paycheck Protection Program Deadline Extension Adjustment for Loans (DEAL) Act has bipartisan support from Senators Gardner (R-CO), Leahy (D-VT), Romney (R-UT), and Wyden (D-OR).
- Main Street Lending Program: Representative Beatty (D-OH) introduced H.R. 6892, the Help Charities Help Communities Act to create a forgivable loan program for nonprofits and other employers with between 500 and 10,000 employees. The bill has been endorsed by numerous national nonprofits with affiliates that currently are not eligible for the Paycheck Protection Program.
- Promoting Pandemic Public Service: Last week, Representative Price (D-NC) introduced the Pandemic Response and Opportunity Through Public Service Act, that would establish 750,000 new national service positions over the next three years to help with COVID-19 response and recovery. The bill would also help encourage service by increasing the AmeriCorps living allowance to 175% of the federal poverty level, providing support to enable SeniorCorps volunteers to work online, and increasing public awareness of response and recovery service opportunities.
Updates on the Paycheck Protection Program
Even as Congress debates how to improve the Paycheck Protection Program, the Treasury Department and Small Business Administration are issuing guidance and other information of importance to nonprofits seeking low-cost loans and preparing to apply for loan forgiveness under the CARES Act program.
- Verification of Need (Liquidity Issue): Last week, the Administration issued FAQ #46 seeking to address concerns raised in earlier FAQs suggesting that PPP borrowers that already had adequate access to capital and liquidity could be prosecuted for fraud for certifying that the loan funds were necessary for the organization’s operations. The new guidance creates a $2 million safe harbor for nonprofits and other businesses that received PPP loans. The guidance states: “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.” SBA still plans to audit all loans larger than $2 million, but has backed off its earlier threats that organizations with adequate capital will be charged with fraud if they don’t repay the money by May 14 (delayed until May 18). Now SBA says it will inform borrowers it determines did not qualify for the loan based on “necessity” that they must repay the loan proceeds and will not be eligible for loan forgiveness. Borrowers that return the loan money will be subject to no further penalties or prosecution. In public comments to SBA prior to the announcement, the National Council of Nonprofits identified many instances in which nonprofits could base a good-faith verification of needs for the PPP funds.
- PPP Loan Forgiveness Application: Late on Friday, the Small Business Administration released the application form and instructions for PPP loan forgiveness. The application allows borrowers to calculate payroll costs using an “alternative payroll covered period,” provides options for including eligible payroll and non-payroll expenses paid or incurred during the eight-week loan period, and explains statutory and regulatory exemptions from loan forgiveness reduction based on rehiring by June 30. The Association of International CPAs criticized the application form and instructions, stating: “Some of the most pressing issues are not addressed and in other areas it appears new questions have arisen.” When releasing the application, the SBA acknowledged more loan forgiveness information is needed: “SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.”
Nonprofits Included in State Funding from CARES Act
Several states are using CARES Act funds to pay nonprofits to provide services during the coronavirus crisis. The Idaho Rebound Cash for Small Businesses will provide grants up to $10,000 for small businesses and nonprofits. The state gave employers with fewer than 19 employees a head start to apply. Nonprofits in Montana made their voices heard by responding to a survey from Governor Bullock, resulting in nine new grants programs administered by the Montana Department of Commerce for agriculture and food adaptability, housing, public health, technological connectivity, and more. After receiving emergency funding from the National Endowment for the Arts, North Dakota created the NDCA CARES Act Fund Grant to support arts and cultural groups that are “particularly dependent on revenue from admissions, ticket sales, and other sources of earned income.”
In New Hampshire, a legislative advisory committee created in response to COVID-19 recommended that the Governor’s Office for Emergency Relief and Recovery use $345 million in federal aid for nonprofits, including hospitals, health care providers, and nursing homes, as well as businesses and local governments. The committee, which includes the NH Center for Nonprofits and New Hampshire Charitable Foundation, also proposed that the state establish a Nonprofit Relief and Recovery Fund with at least $125 million to ”address both costs and losses incurred by nonprofits as a direct result of COVID-19, and provide resources to help nonprofits meet important health, economic, and social needs and expenditures that directly result from COVID-19.”
Both Alaska and Wyoming received $1.25 billion in state funds under the CARES Act. Through the advocacy efforts of The Foraker Group, the state association of nonprofits, and other nonprofits in Alaska, nonprofits were included in several funding streams that initially had excluded them. The state will also provide $50 million dedicated to frontline nonprofits responding to COVID-19. However, legislators in Wyoming left nonprofits out of legislation (HB 1004 / SF 1004) that allocates its federal funds.
States Reconsider Charitable Giving Incentives
Some states, recognizing the impact of the pandemic on the ability of charitable nonprofits to serve their communities, are starting to review their giving incentives policies. The New Jersey Senate unanimously passed a bill last week that would allow taxpayers to take a state income tax deduction of up to $10,000 for individuals and $20,000 for married couples for contributions to qualified New Jersey charities during the COVID-19 pandemic. The Center for Non-Profits in New Jersey explains that the bill would provide “a much-needed lifeline to help charities to fill growing demands for services and to weather the emergency. Importantly, all taxpayers, regardless of federal itemizer status, could benefit from their generosity to New Jersey charities during this crisis.” A bill in North Carolina would create a new state tax credit for taxpayers who grow crops and allow them to be harvested for donation to 501(c)(3) nonprofits during or within 180 after the time of a disaster. The tax credit would be for 50 percent of the market value of the gleaned crops and could not exceed $15,000.
Government Grants and Contracts Reforms
Recognizing their dependence on charitable nonprofits to provide essential services, states continue to focus on streamlining government grants and contracts processes. Recently, the Governor of Maryland signed significant grants reforms that will closely align state rules with the federal OMB Uniform Guidance, including the mandates to pay nonprofits their indirect costs. The new law calls for nonprofit input and promulgation of new regulations consistent with the OMB Uniform Guidance to the greatest extent practicable. Nonprofits in New Jersey are promoting a bill that permits state agencies to waive any penalty in a contract or agreement if a nonprofit cannot fulfill the terms and conditions in the contract due to COVID-19 (e.g., not serve as many people as contemplated because of stay-at-home orders). It would permit nonprofits to request a modification of the terms and conditions of a contract or agreement due to COVID-19. The legislation is intended to address concerns by nonprofits of financial penalties if they are unable to meet contracted levels of service and other terms negotiated prior to the crisis. Read the NJ Center for Non-Profits statement in support.
Become a National Voter Registration Day Partner
Registration is open for nonprofits to sign up as partners to promote National Voter Registration Day (September 22). This day – six weeks before Election Day – is a great opportunity for nonprofits to ensure that their staff, volunteers, and community members are registered to vote. Sign up today to join the nationwide effort to register hundreds of thousands of voters on September 22. As an official partner, your nonprofit will receive a free voter registration kit and access to other opportunities to support your nonpartisan voter registration work.
Presenting a United Front, Apart
In the best of times, it’s hard to pull busy nonprofit professionals together with their elected officials to hold meaningful dialogues about the critical issues of the day. In these, the worst of times, it is not so hard because the connection between policy and mission are unmistakable. That’s what the data show from the webinar engagements of state associations of nonprofits.
As mentioned elsewhere, state associations have convened at least 165 virtual meetings on public policy matters, often with their federal and state elected officials. How impressive is it to have both U.S. Senators from Maryland on a call in March hosted by Maryland Nonprofits and attended by more than 100 professionals to discuss the nuances, questions, and interpretations of the CARES Act that had just been enacted? Very impressive and helpful to the participants in navigating the many opportunities to secure funding and relief. And simultaneously impressive in keeping those elected officials informed about community needs.
In the ensuing eight weeks, federal officials have joined state association of nonprofits to meet with their constituents, share their views about the impact of nonprofits, hear about needs for additional relief, and express awe at the engagement of local problem solvers. Here are a few of many highlights:
In April, New York Council of Nonprofits and Nonprofit New York hosted a virtual Nonprofit Town Hall with Senate Minority Leader Chuck Schumer and Senator Kirsten Gillibrand. The call ran long, yet both Senators stayed on the line to learn and share. Senator Gillibrand spoke eloquently on the need for funding and support for frontline nonprofits, food stamps, and testing, among other things. Senator Schumer recounted the negotiations in the CARES Act and interim bill, referred to the Labor Department’s unemployment insurance UI guidance as “outrageous,” and called for extending the PPP beyond eight weeks and “trying to expand the program to go above 500” employees. Watch the recording.
The NH Center for Nonprofits hosted a call with Senator Maggie Hassan (D-NH). The Senator was so inspired by the event she issued a news release highlighting the wonders and struggles of nonprofits in the Granite State.
Together SC hosted a very successful state-wide call with House Majority Whip Jim Clyburn (D-SC). More than 300 nonprofits from across the state and across all subsectors participated.
Utah Nonprofits Association hosted a double-header one day: Representatives McAdams (D-UT) and Stewart (R-UT) on two separate calls. Both recognized the adverse impact of the DOL unemployment guidance, while expressing strong support for fair treatment of nonprofits in the next coronavirus legislation.
Lessons to Apply
The opportunity to engage with elected officials may be easier now than it has ever been. Here are a few tips to make the most of it.
- Stay aware of your state association’s events calendar. Most state associations of nonprofits have an events calendar and provide helpful alerts to upcoming engagement opportunities. Often the calls are scheduled quickly and have short turn-around times. All you have to do is check it out. Find your state association of nonprofits.
- Register and prepare. Often when you sign up for a virtual town hall you get the opportunity to ask questions that you’d like answered. This gives the host the heads up about what is important to nonprofits in the state. And your question alerts the elected official that they’ll be on the spot to provide helpful answers, which should prompt them to do a little research and learn more.
- Show up. The bigger the audience, the greater the impact the event will have in the mind of the speakers. Politicians are participating in lots of virtual events these days. Audience size matters.
- Ask questions. Even if an event is mostly scripted (which sometimes is necessary), it’s still a good idea to type your question into the question or chat box. Novel questions get attention. The same question asked a dozen or more times proves that a straight answer had better be given or that a legislative solution may be needed. Either way, asking the question can advance your mission.
- Follow up. Whether you liked or didn’t like what you heard, it’s good to let the elected official hear from you via email, tweet, or other media. Tell them you joined the event, maybe quote back what you heard them say, and then express what you think. Respectful is always the best approach, but expression of an honest point of view is in your best interest and can change how they think.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.