YOUR VOICE IS NEEDED TODAY
The Most Urgent Action Alert of the Year!
Your 10 minutes of action could prevent unnecessary suffering by tens of millions of people.
Dear Readers: As you read this, Senators and Representatives are coming back to DC to pass a spending bill to avoid a government shutdown on December 12, and then leave as quickly as possible – perhaps without enacting desperately needed COVID legislation. If Congress fails to provide legislative relief to address the worsening health pandemic and economic recession, millions of people will suffer needlessly and tens of thousands of our nonprofit colleagues will lose their jobs when their services are
needed more than ever. Join us today in demanding that Congress take action to provide #Relief4Charities. Here are three things you can do right now; we’ll have more suggestions as the week goes on:
- Email (Representatives, Senators) and tweet to your Representative and Senators the new Nonprofit Community Letter.
- Tweet one of these sample messages to your Senators and Representative. You can also post additional tweets using the #Relief4Charities hashtag, expressing why your nonprofit and the people you serve need additional relief now.
- Spread the word! Ask three people to join you in taking those valuable and easy actions. Or write an op-ed for your local paper detailing the challenges your nonprofit is facing and calling for a COVID relief package that includes the #Relief4Charities
Read on for additional background. You can be sure that every business group, government association, and progressive and conservative advocacy group is making their voices heard this week. We need the solutions for the charitable nonprofit community to rise above the din and make it into COVID relief legislation. Act Now!
Year-End Legislating Confronts the Raging Pandemic
It appears increasingly unlikely that Congress and the Administration will address the deteriorating health and economic crises by the end of the year. Representatives convene in DC on Wednesday, December 2, and plan to work through the weekend to pass a spending bill, and maybe nothing else. Senate Republicans won’t be meeting in person for their weekly lunches due to the spike in COVID cases and positive tests by several Senators, making seeing eye-to-eye with themselves, let alone with Democrats, on pressing issues all the more complicated. And the President remains focused on challenging the election results
rather than policymaking. All of this suggests that less will get done in the lame-duck session than in normal years.
Congress must pass a massive appropriations bill by the December 11 expiration of a temporary spending extension to avoid another government shutdown. On the Tuesday before Thanksgiving, top House and Senate appropriators reached agreement on a bipartisan set of funding levels, paving the way for passage of a $1.4 trillion spending package. Of greater concern is the looming COVID cliff (see the next article), the year-end expiration of pandemic-related programs and protections that will adversely affect millions of lives unless Congress and the Administration reach agreement on much-needed relief, including
key nonprofit policy priorities (see the following article). Stalemated for months over aid to state and local governments and liability protections, talks could resume once the question of whether a deal would cost less (Senate Republican preference), more (House Democratic preference) or somewhere in between. Should negotiations on a freestanding COVID relief bill fail, Congress could attach some provisions to the appropriations bill (e.g., money for vaccine distribution, state and local aid, unemployment benefits and relief, another round of Paycheck Protection Program loans, and more). Please see the Action Alert, above, for ways to motivate congressional action.
Why It Matters
The COVID Cliff is a Clear and Present Danger
Pandemic-related relief provisions are expiring in December, just as the nation is experiencing rapidly rising COVID-19 positive tests, hospitalizations, and deaths, as well as increasing unemployment claims, new shutdown mandates, and a deepening economic recession. Here are examples of the consequences of congressional and administrative inaction, by the numbers:
- Up to 12 million people currently on unemployment will lose extended benefits the day after Christmas.
- An estimated 40 million residents could start being evicted when the current eviction moratorium ends. See CDC Agency Order.
- Student loan payment forbearance, first provided in the CARES Act and then extended via an Executive Order in August, expires at year’s end, putting in doubt the loan status of 22 million individuals, many of whom are also facing unemployment, eviction, and threats to their health.
- Unless extended, the Coronavirus Relief Fund expires on December 30 and state and local governments will be required to pay back any unspent funds from the $150 billion allocated in CARES Act to pay for health care costs, unemployment, and grant programs to nonprofits and others. See State Actions on Coronavirus Relief Funds.
- As the year ends, the federal government will no longer cover half the costs of benefits paid to laid-off and furloughed employees of reimbursing (self-insured) nonprofits and other employers, thereby doubling unemployment costs for those nonprofits overnight. New Year’s Day also marks the date that 21 states must start paying principal and interest on nearly $42 billion in loans from the Labor Department Federal Unemployment Account. These costs will be passed on to the millions of contributing employers in the form of higher taxes.
- The list of expiring programs also includes the Family First Act’s paid leave protections and the Employee Retention Tax Credit, the refundable payroll tax credit that helps employers keep and restore staff.
Nonprofit Policy Priorities in COVID Relief Legislation
The broad charitable nonprofit community is advocating for inclusion of key policy priorities in any COVID relief or spending legislation. Here is a short recap. See also the Nonprofit Community Letter for additional context.
- Continue Emergency Funding Programs: (1) Extend and expand the Paycheck Protection Program (“PPP”) by enabling a second round of loans and modifying the eligibility criteria to all nonprofits of all sizes; and (2) Enact and expand grant and funding programs, such as the proposed WORK NOW Act and the Employee Retention Tax Credit, to help nonprofits retain employees, scale service delivery, and create new jobs.
- Strengthen Charitable Giving Incentives: (1) Increase the above-the-line or universal charitable deduction in the CARES Act; and (2) Extend this and the giving incentives enacted in the CARES Act through 2021.
- Provide Full Unemployment Benefit Reimbursement: Increase the federal unemployment insurance reimbursement for reimbursing (self-insured) nonprofits to 100% of costs and extend relief into 2021.
- Assist State and Local Governments through substantial federal aid to help recoup lost revenues during the pandemic and avoid layoffs and cuts to essential programs.
- Approve Liability Relief to entities that reopen operations following stringent guidelines adopted by governments.
- Supreme Court Heard Census Case: Today, the U.S. Supreme Court heard oral argument in the case of Trump v. New York, concerning the validity of the President’s directive that the Commerce Secretary subtract the number of undocumented immigrants from the official 2020 Census count used for allocating congressional seats among the 50 states. In July 2020, the President issued a Memorandum directing
the exclusion of all immigrants who are not in a lawful immigration status from the apportionment base. Three courts have rejected the President’s attempt to order revision of the census totals, ruling that the Constitution requires apportionment of seats in the House of Representatives based on the “whole number of persons in each State.” Reuters provided this early report about this morning's arguments: Supreme Court justices grill Trump lawyer in illegal immigant census case.
- PPP Disclosures: A federal judge denied the SBA’s request to postpone the release of PPP and EIDL borrower information. SBA has until Dec. 1 to publish or convince a higher court to delay the disclosure of the name, address, and precise loan amount for every nonprofit or business that received loans. Here is the original court decision from Nov. 5.
- Inventory Giving Incentive: Restaurants and retailers would be encouraged via a tax incentive to donate prepared food and other goods, such as warm clothing and fresh diapers, if Congress enacts bipartisan legislation introduced last week by Representatives Panetta (D-PA) and Smith (R-NE). The Preserving Charitable Incentives Act would temporarily lift the cap on business donations which currently provide the perverse incentive to destroy inventory (at 100 percent deductibility) rather than donate it to charity. “During this pandemic, frontline nonprofits have seen an increase in demand for services
while experiencing decreasing charitable giving and funding, frustrating nonprofits’ abilities to meet those needs,” said Tiffany Gourley Carter in announcing the National Council of Nonprofits’ endorsement of the bill. She said further, “This legislation will promote corporate donations of useful products at a time when they are needed most. It deserves swift approval by Congress.”
- Silo UBIT: The IRS has issued the Final Rule on Unrelated Business Taxable Income Separately Computed for Each Trade or Business – the Silo UBIT Rule. Until the 2017 tax law, nonprofits were treated the same as for-profit businesses when it came to taxable business income – revenues and expenses were aggregated, and taxes paid on the excess. The “Tax Cuts and Jobs Act” added Internal Revenue Code Section 512(a)(6) singling out nonprofits with unrelated business income for a punitive tax by requiring charitable organizations to calculate each “trade or business” separately,
and pay income taxes on each separate business line. The final rule allows nonprofits to group their unrelated business income into 20 or so broad buckets, or silos, based on the first two numbers of NAICS codes. For instance, all types of accommodations and food services fall into one category (72). The final rule, however, does not include a de minimis test that accountants had recommended or provide any clarity on the allocation of expenses between exempt activities and unrelated business.
States Convene Special Sessions to Address Pandemic-Related Needs
States are convening special legislative sessions to adopt pandemic-related solutions while they also seek assistance from the federal government. In Colorado, lawmakers convene today to address seven action items laid out by Governor Polis: small business relief, child care, housing and rental assistance, broadband access, food insecurity, utility assistance, and public health response. “While legislative actions during the special session will provide immediately needed resources to help Coloradans weather the pandemic, many needs in our communities will go unmet in the long run without broad-based relief to help
nonprofits keep their employees working and doors open,” stated Mark Turner of the Colorado Nonprofit Association. In Minnesota, Governor Walz has suggested charitable tax credits for food donations that may become spoiled or discarded by businesses as part of a larger package to be considered soon. Other proposals on the table include sales tax forgiveness for food and beverages, waiver of regulatory fees, direct relief for individual workers, and elimination of the COVID-19 Minnesota fund expiration date.
Just before Thanksgiving, New Mexico Governor Grisham signed a COVID relief package spending more than $300 million of federal aid for direct unemployment assistance, a small business grant program, emergency housing assistance, food bank services, and administration costs. Both nonprofits and for-profit businesses are eligible to participate in the $100 million program providing grants of up to $50,000 each. According to Tsiporah Nephesh of New Mexico Thrives, making nonprofits eligible is vital because the previously available funding “could only help a small portion of nonprofits” because “some of the local governments were requesting business licenses or GRT reports as a part of the application. This effectively barred access to nonprofits seeking funding.”
State and local governments continue to advocate for significant aid from Washington, DC. “The failure of Congress to reach a compromise on a new coronavirus relief package imperils the ability of state and local governments to maintain sound operations and critical services for residents, and puts jobs further at risk for the 15 million public servants carrying out services on the ground ranging from health care to education to public safety,” seven government associations wrote. That pressure has only increased in recent weeks with the issuance of strong statements and research, such as the recent report from the
National League of Cities, The Human Costs of Local Fiscal Crises During COVID-19.
Spending Down CARES Act Funds
Lawmakers are racing to disburse hundreds of millions of dollars in Coronavirus Relief Fund (CRF) monies by December 30 to avoid having to return the unspent funds to the federal government. While some state legislatures have convened special sessions to approve appropriations (see article above), governors in many states, including Colorado, Minnesota, New Mexico, Oregon, and Washington, have used the federal aid to pay for unemployment benefits and grants to nonprofits and small businesses. Other governors have used both state and federal
funds for relief. Maryland Governor Hogan has approved $250 million out of the state’s Rainy Day Fund for for-profit businesses and arts organizations. In Massachusetts, Governor Baker announced $774 million for businesses and renters. Ohio Governor DeWine plans to spend $420 million for grants, housing assistance, and aid for hospitals and colleges. In Alabama, a group of 82 nonprofit organizations sent a letter to Governor Ivey imploring her to spend the approximately $1 billion remaining CRF money to alleviate hunger, address evictions and homelessness, support
vulnerable populations, and keep quality childcare available.
The North Dakota Emergency Commission reallocated $35 million, including $800,000 in grants for nonprofits that have been negatively impacted by the pandemic and are at risk of folding, and $2.65 million for unemployment insurance benefit costs of reimbursing employers, including nonprofits. Local officials in Colorado (Denver), Kansas (Sedgwick County), Michigan (Oakland County), New Mexico (Santa Fe), and Oklahoma (Oklahoma County) have also started grant programs using federal funding to aid nonprofit organizations serving their communities. Funds can be tracked by state and category through a new database by the National Conference of State Legislatures, which provides up-to-date, real
time information on actions.
The Fine Art of the Letter to the Editor
The classic letter to the editor can be satisfying to the writer and thought-provoking to readers. When it includes a call to action and is reposted to reach targeted audiences, we can see a gem of advocacy in action.
The rules for publishing letters to the editor are usually strict: normally the letter may be no more than 250 or so words, cannot include inappropriate content, and must be respectful (as opposed to comments at the bottom of online articles that tend to be caustic). But within those limitations, there’s plenty of room for inspiration. And impact.
The Arizona Daily Sun in Flagstaff, Arizona, recently published a very good example by Mark Cox, CEO of the Boys & Girls Club of Flagstaff & Williams. Cox did three things in his three-paragraph letter. First, he articulated the inspiration of nonprofit innovation – “I have the honor of witnessing the difference people can make in their communities firsthand every day” – and explaining that his organization “had to step up in any way we could to be there for our kids, families and communities.” Next, he identified a problem – the uncertainties of the nonprofit being able to continue providing critical services without additional
financial support. He closed with a call for readers to take a specific action to help solve the problem, “Please tell your elected officials: Nonprofits support us in times of need, let’s support them in theirs.” See Nonprofits support communities, it's time to support them, Mark Cox, Arizona Daily Sun, Nov. 21, 2020.
A letter to the editor of the New York Times made similar points from a national perspective, Tim Delaney of the National Council of Nonprofits alerted readers that nonprofits have become besieged by people seeking help during the pandemic. In identifying the problem, he explained that “many nonprofits themselves are struggling to survive as those increasing demands bring increases in costs when revenues are declining,” mixing in a warning that more nonprofit layoffs and reduced services, will result without congressional action. His call to action stressed, “The White House, the Senate and the House owe the American people the same commitment to Covid relief that nonprofits are showing every day.
Get back to the negotiating table, and don’t stop until a deal is done.” See Covid Relief for Nonprofits, Tim Delaney, New York Times, Oct. 28, 2020.
These are just two examples of the many letters to the editors, op-eds, and other communications that nonprofit leaders have issued to illuminate the increasing needs of the nonprofit community. They show that simple and succinct messages in the local newspaper can get the point across, and enlist the help of newspapers in the advocacy efforts to improve communities. And when forwarded via email or tweet to congressional delegations, letters to the editor can help get elected officials on board as well.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.