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National Council of Nonprofits


Federal Issues


The State of Play

September 2020: A Month of Congressional Action (or Not)

The Senate and House return to DC this week and next to deal with multiple end-of-fiscal-year emergencies. Lawmakers have only 22 days to fund the government, renew or let expire numerous major programs, and enact a COVID-relief bill, all before leaving to campaign for reelection. On the first issue – averting a government shutdown when spending laws expire at the end of the fiscal year on September 30 – Speaker Pelosi and Treasury Secretary Mnuchin reportedly have agreed on a no-drama solution, a “clean” temporary appropriations bill (known as a continuing resolution or “CR”) that maintains spending levels until December. A “clean CR” means no extraneous and controversial amendments, so there’s less chance of a government shutdown due to fights over whether to attach unrelated policy provisions. But it also means that the September 30 deadline can’t be used as leverage to pass a COVID bill or other measures.


After months of failed negotiations and controversial executive actions, policymakers are not any closer to reaching agreement on the core components of COVID-relief legislation. Senate Majority Leader McConnell (R-KY) today announced his plan to bring a targeted, or “skinny,” bill to the Senate floor that most expect to fail on procedural votes. The draft Republican bill includes liability protections; partially restores enhanced unemployment benefits ($300/week); sets up a second round of Paycheck Protection Programs loans for smaller employers, but that puts nonprofits at a disadvantage; provides $105 billion for education, and additional funding for vaccines, treatment, and testing; and provides some financial relief for the Postal Service. Democratic Leader Schumer (D-NY) circulated a Dear Colleague letter outlining the Democratic position and asserting that Republicans have “refused to make any significant compromise.” It remains to be seen whether the Senate action this week will help jumpstart bipartisan negotiations or serve as talking points on the campaign trail in October. See Advocacy in Action, below, for more on nonprofit advocacy that occurred throughout the summer.

Breaking the Impasse

Seizing Clear and Present Solutions

The HillRecognizing that none of the nonprofit priorities will be addressed if no COVID-relief legislation is enacted, Tim Delaney of the National Council of Nonprofits penned an article in The Hill identifying clear and present solutions to some of the complex issues keeping congressional and administration negotiators mired in impasse. In The economic solutions for this coronavirus crisis are available, Delaney makes the nonpartisan case for resolving the issues on which the political parties have dug in their heels and refused to negotiate: adequate emergency funding for state and local governments and reasonable liability protections coupled with solid safety standards. On both issues, nonprofits have a major stake as service providers, community builders, and employers. The article opens, “Extreme partisanship is literally killing Americans and our economy,” and concludes, “Our federal officials must take swift action for lives are literally at stake. Solutions that both sides can live with are not out of reach. Every day they fail to take action worsens the destruction.” Read the article and Take Action:

Nonprofit Job Losses Persist

Center for Civil Society StudiesNonprofit employment has improved some from the loss of about 1.6 million jobs in March through May, but is still down by an estimated nearly 1 million jobs compared to where it stood in February before the pandemic, according to a new analysis from the Center for Civil Society Studies at Johns Hopkins University. Nearly a third of the job losses (31.8%) occurred in the healthcare field, followed by educational services (21.7%), and social assistance (18.7%). In terms of jobs still lost after a partial recovery, the arts, entertainment, and recreation subsector has seen nearly 135,000 jobs disappear, nearly two-fifths (38.9%) of jobs in February.

Federal FastView

  • Employee Payroll Tax Deferral Guidance: The Department of Treasury and Internal Revenue Service issued a three-page guidance implementing the Presidential Memorandum (Notice 2020-65) allowing employers to defer withholding and payment of the employee’s portion of the Social Security tax. The Notice makes relief available for employers and generally applies to wages paid starting Sept. 1, 2020, through Dec. 31, 2020. The employee Social Security tax deferral may apply to payments of taxable wages to an employee that are less than $4,000 during a bi-weekly pay period, with each pay period considered separately. As the Venable law firm notes in its summary, the guidance does not address many of the practical concerns that nonprofits and their employees have about the logistics and implications of the payroll tax deferrals. Last month, a group of 30 business associations sent a letter to Congress and the U.S. Department of Treasury raising concerns about the payroll tax deferral and seeking a path forward that provides relief to families without imposing a large tax bill on employees in the future. The associations call the executive memorandum “unworkable” and explain that many businesses “will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law.”
  • Eviction Moratorium Clarified: The Centers for Disease Control and Prevention issued an “Agency Order” implementing the President’s executive order on assistance for renters and homeowners. The order provides a blanket eviction ban through the end of the year covering nearly all residential renters. It expressly states, “This Order is a temporary eviction moratorium to prevent the further spread of COVID-19,” thus explaining why the CDC is the governmental entity issuing the order. A White House news release explains that “renters who meet certain conditions cannot be evicted if they have affirmatively exhausted their best efforts to pay rent, seek Government rental assistance, and are likely to become homeless due to eviction.” Renters will still owe the accumulating rent and landlords can still evict individuals engaging in illegal activities.
  • Main Street Loan Program: The Boston Federal Reserve announced on Friday that the Fed’s Main Street Lending Program for loans to nonprofit organizations is now fully operational. The program was designed to extend credit to small- and mid-sized nonprofit organizations that were in sound financial condition prior to the pandemic. Few charitable organizations are expected to seek Main Street loans, however, because the loans do not include a forgiveness provision as in the Paycheck Protection Program.
  • Back to School and Paid Leave: The U.S. Department of Labor (DOL) issued updated guidance with answers to questions about how the paid leave requirements under the Families First Coronavirus Response Act (FFCRA) applies to parents whose children are engaged in remote learning this fall (see questions 98-100 in the DOL guidance). In schools operating on a hybrid system alternating days or weeks of in-person and remote learning, parents are eligible for FFCRA leave on days when their children are engaged in remote learning, since schools are deemed “closed” on those days. The guidance provides that parents are not eligible for FFCRA leave if they choose a remote learning option for their children when schools are offering the option of hybrid or in-person learning since schools are not “closed.” The guidance suggests, however, that these parents may be eligible for FMLA on the days when their children would otherwise be learning remotely in a hybrid system. Finally, in school systems that are temporarily using only remote learning but may switch to a hybrid or in-person system later in the school year, parents are eligible for FFCRA leave during the period when all learning is taking place remotely. The FFCRA mandates paid leave for most employees in nonprofits under 500 employees, with some exceptions, when their children’s school is closed or when childcare is unavailable due to COVID-19 and that employee is unable to telework. See analysis of the FFCRA.

Census Crises Explained

Accurate Census Count at Risk

United States Census BureauNonprofits, like the rest of America, depend on a fair, accurate, and complete census count. Yet a decade’s worth of dollars, data, and democracy are in serious jeopardy as the 2020 Census count begins to conclude. One threat is natural; two are human-made.

  • Natural: Finding and counting every person in the U.S. is a gargantuan task in normal times. The challenge has been compounded in these abnormal times because public health concerns due to COVID-19 led to significant delays in the required field work, shifting starting dates from April to June. Recognizing that the counts could not be completed by the statutory deadline, the Census Bureau urged Congress to extend the count and related deadlines to “ensure a complete and accurate count of all communities.” The House passed legislation in May to extend the census deadlines requested by the Administration. The Senate has not acted.
  • Abruptly shortening the timelines: Despite previously telling Congress it could not complete an accurate count by the end of September, the Administration recently reversed course, putting a new “Rush Plan” in place to end the count early, prompting litigation. On Saturday, a federal judge issued a temporary order preventing the shortening of census data collection and processing timelines from the eight months in the Census Bureau’s COVID-19 Plan to just four months in its new accelerated plan. The judge based her decision in part on admissions by Census Bureau leaders earlier in the summer that “we have passed the point where we could even meet the current legislative requirement of December 31st. We can’t do that anymore.” Meanwhile, the House Committee on Oversight uncovered evidence that Census Bureau professionals do not believe they can produce complete and accurate data under the Rush Plan, which allows only 92 days to do what originally had been designed for 153 days. The Committee found that this “could force the Census Bureau to limit or entirely remove key steps developed over the past decade to ensure the integrity of the Census.”
  • Subtracting people from the count: The U.S. Constitution mandates that the census count “every person” in each state. When the President directed the Commerce Secretary to subtract certain people from the census count (undocumented immigrants) for the purposes of apportioning congressional seats to each state, six lawsuits were filed challenging that action. Last week a federal three-judge panel heard arguments. Media reported that the judges “grilled” and “appeared frustrated with” the government’s attorney regarding “how the administration would go about excluding undocumented immigrants from the apportionment count, considering the census forms do not include a citizenship question.”

What you can do: reach out to your staff, board members, volunteers, neighbors, and communities to make sure they are counted now!


State and Local Issues


States Pressed to Spend CRF Monies

State policymakers must either spend their share of $150 billion in Coronavirus Relief Funds under the CARES Act before Dec. 30, 2020 or return the money back to the federal government. While states informally allocated nearly 75 percent of the funds as of June 30, they had officially incurred or expended only 25 percent according to the National Association of State Budget Officers. Last week, the North Carolina General Assembly approved the state Coronavirus Relief Act 3.0 bill that would appropriate more than $145 million in Coronavirus Relief Fund monies to a wide range of nonprofits, including food banks, arts organizations, YMCAs, free and charitable clinics, nonprofit residential facilities, domestic violence agencies, and sexual assault centers. Almost a third of the funds ($45.5 million) goes to the NC Job Retention Grant Program, which provides grants of up to $250,000 to nonprofits and businesses that suffered economic loss during the pandemic. Learn more.


The Governors of Delaware and Maine recently announced grant programs to assist eligible nonprofits and small businesses affected by the COVID-19 crisis. The DE Relief Grants program will provide grants of up to $100,000, and the Maine Economic Recovery Grant Program will award funds on demonstrated need as a pro-rated percentage of the total cost of business interruption. Elsewhere in the Northeast, Vermont lawmakers are considering funding a second round of Economic Recovery Grants, which currently provide grants of up to $500,000. Common Good Vermont, the state association of nonprofits in the Granite State, urged lawmakers to treat charitable giving declines as revenue losses for purposes of calculating eligibility to expand the number of nonprofits that could benefit from the program.

National Voter Registration Day is September 22!

National Voter Registration DayNational Voter Registration Day (NVRD) on September 22 is two weeks away! It’s a great opportunity for nonprofits to ensure that their staff, volunteers, and community members are registered to vote. Sign up 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.


Advocacy in Action


A Summer of Advocacy Progress

Nonprofit advocates have been working full time since the pandemic began seeking to adapt public policies to enable nonprofits to provide relief to people and recovery in communities. With a significant COVID-relief bill stuck in impasse and passage far from certain, have these advocacy efforts generated any measurable impact on the core nonprofit policy priorities outlined in the new Nonprofit Community Letter? Yes, and quite a lot, actually.


Perhaps the most visible sign of growing support for the nonprofit agenda are sign-on letters from Senators and Representatives. In mid-August, Senators Lankford (R-OK) and King (I-ME) sent a letter from 24 Senators urging their leaders to “commit to providing charitable nonprofits with the support that they need to continue serving our constituents and our communities.” Similarly, Representatives Moulton (D-MA) and Fitzpatrick (R-PA) sent a letter to House leaders calling for inclusion of priorities identified in the new Nonprofit Community Letter in the next COVID relief package. Combined with Senate and House letters sent this spring, the new letters identify 33 Senators and more than 150 Representatives committed to “help charitable nonprofits respond to the fallout from this pandemic and continue to serve our communities in its aftermath.”


As for the specific policy asks, nonprofits have made progress:


SenatorsPromoting Charitable Giving: In early June, five Senators participated in an unprecedented Zoom video call hosted by a dozen national nonprofits, From Common Ground to Congressional Action: Advancing the Universal Charitable Deduction. More than 4,400 nonprofit professionals from all 50 states registered to see and hear each of the Senators make a strong, consistent case for improving the above-the-line deduction in the next COVID-19 package. They gave their perspectives on how Congress can strengthen the ability of nonprofits to help relief, recovery, and rebuilding during the pandemic crisis and beyond, took questions, and explained what they are doing to enact improved charitable giving incentives this year. The Senators subsequently introduced the Universal Giving Pandemic Response Act (S. 4032) that follows through on their commitment to expand charitable giving during the current health and economic crisis. A House companion bill, H.R. 7324, was also introduced in June by Representatives Walker (R-NC) and Pappas (D-NH).


Paycheck Protection Program Reforms: Throughout the spring, nonprofits worked to counter decisions by the SBA and Treasury that unnecessarily restricted and burdened the ability of charitable nonprofits and other employers to secure Paycheck Protection Program (PPP) loans and loan forgiveness. The Paycheck Protection Program Flexibility Act corrected many of those challenges and extended the program for another two months. Further, nonprofit advocacy played a role in the introduction of a bill to provide near-automatic forgiveness of PPP loans of $150,000 or less and nonprofits included in bills to provide a second round of PPP loans, albeit with flawed terms for nonprofits.


Federal ReserveRelief for Mid-Size Nonprofits: One of the most troubling shortcomings of federal COVID relief is the refusal, to date, to extend Paycheck Protection Program loans to nonprofits with more than 500 employees. The House-passed HEROES Act would extend this important support and provide other supports for nonprofits, but there remains strong resistance in the Sente and the Administration. One alternative approach – access to lower-cost loans for nonprofits through the Federal Reserve’s Main Street Loan Program – is considered largely unhelpful to nonprofits typically averse to borrowing funds to fund operations. Learn more about the nonprofit call for forgivable loans. Most nonprofits, and particularly those mid-size organizations left out of the CARES Act, would benefit from the WORK NOW Act (S. 3747/H.R. 7495) that proposes a $50 billion grant program to support nonprofit jobs. See the recent op-ed article and news release acknowledging nonprofit advocacy efforts. Nonprofits would also benefit from improvements to the Employee Retention Tax Credit and the Safe and Health Tax Credit incorporated in the HEALS Act introduced by Senate Republicans in late July. Importantly, there is strong bipartisan support for the tax credits.


Unemployment Relief for Self-Insured Employers: In a clear legislative win for nonprofits, Congress unanimously passed the Protecting Nonprofits from Catastrophic Cash Flow Strain Act, a bill that reverses erroneous guidance from the Department of Labor and relieves self-insured nonprofits and other employers from having to pay their states 100 percent of the costs of unemployment benefits paid to former employees. Nonprofits continue to advocate for full federal coverage of these costs. The Senate Republican HEALS Act would increase that coverage to 75 percent (up from 50 percent in the CARES Act), which is progress, but not sufficient to avert additional layoffs and nonprofit closures. Notably, Senator Lankford (R-OK) introduced an amendment (SA 2620) to a separate bill that would provide 100 percent coverage, a critical ask in the new Nonprofit Community Letter.


Yet, while there has been quite a lot of progress in recent months, it has only laid the groundwork for success and nothing is guaranteed. To get where we all want to be, supporters of nonprofits of all sizes and mission areas must continue to engage through direct contact with Senators and Representatives, social media communications, articles, news conferences, and other means.



Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.