Sign On Now
Nonprofits Call on Federal Leaders to Provide COVID Stimulus and Relief Tailored to Nonprofits
On Friday, a coalition of nonprofit organizations sent an initial letter to federal leaders urging Congress and President to enact a package of solutions tailored to the needs and realities of nonprofits serving the public good. The letter, after highlighting the unique role of charitable nonprofits in providing pandemic relief and economic recovery, urges President Biden, Speaker Pelosi, and Leaders Schumer, McCarthy, and McConnell to include provisions in the next COVID relief package that accomplish the following:
- Provide Nonprofit-Specific Grants, Forgivable Loans, and Refundable Tax Credits for All Nonprofits via a carveout or nonprofit-specific PPP relief that lifts the 500-employee cap and removes the 25% decline in gross receipts in the PPP Second Draw, as well as passage of the updated WORK NOW Act and funding for emergency grants.
- Strengthen Charitable Giving Incentives by increasing and extending the above-the-line deduction while preserving the itemized charitable contribution deduction, all to ensure that nonprofits have the resources to serve their communities.
- Provide 100% Unemployment Benefit Reimbursement to nonprofits that self-insure these benefits, both retroactively to 2020 and extended through the first three quarters of 2021.
- Provide Substantial Financial Aid to State and Local Governments to avoid layoffs and cuts to essential programs and services, and to prevent the imposition by governments of new costs and burdens on their nonprofit partners.
The letter was sent last week to make sure negotiators and bill drafters knew the position of nonprofits. Now nonprofits from all subsectors and across the country need to sign onto the letter to signal to their Representatives and Senators the groundswell of nonprofit support. We encourage all who are committed to the wellbeing of nonprofits and the people we serve to sign your organizations onto the letter and to share with your members and colleague organizations. Read the letter sent to the federal leaders and the statement to the news media.
President Biden Hits the Public Policy Ground Running
Starting quickly on January 20 and keeping up the pace at least through the end of the month, President Biden is taking a range of actions that implement and/or signal the highest priorities of the new Administration. On Inauguration Day, the President took 17 executive actions, including advancing racial equity and supporting underserved communities, revoking President Trump’s ban on implicit bias training, census orders, and the Muslim travel ban, extending the foreclosure moratorium and student loan forbearance, and
imposing a ban on workplace discrimination against LGBT employees. He has since issued 10 more Executive Orders on issues that include promoting worker health and safety due to COVID, and protecting the federal workforce (revoking four Trump orders, ordering collective bargaining, and calling for ways to raise the government minimum wage to $15/hour). For the remainder of the month, executive and White House actions will focus on “Buy America,” equity, climate, healthcare, and immigration, according to a “calendar of
Biden $1.9 Stimulus Plan Short on Nonprofit Details
In the week before his inauguration, President Biden released his $1.9 trillion “American Rescue Plan” designed to provide relief for individuals while stimulating the economy to prevent further economic decline. The summary of the plan outlines a national vaccination program and calls for providing additional checks of $1,400 per-person, extending unemployment insurance, expanding housing, nutrition assistance, and access to childcare and affordable healthcare, increasing the federal minimum wage to $15/hour, and providing additional support for some small businesses. Reception to the plan has been cool from
congressional Republicans, many of whom express concerns about the costs or urge delay to see how the economy responses to the year-end COVID-relief law.
Although the summary runs 19 pages, it is thin on details related to nonprofit services and priorities. The plan does call for extending the paid sick-leave refundable payroll tax credits for employers with 500 or fewer employees. It also would include “non-profits” in a $3 billion grant program through the Economic Development Administration “to fund initiatives that support bottom's up economic development and enable good-paying jobs.” It is clear that nonprofits will need to advocate quickly and aggressively with the new Administration and Congress to ensure that our voices are heard and priorities respected.
Share Your Story
Congress is debating additional COVID relief and federal agencies and departments – particularly the Small Business Administration and Treasury Department – are in the process of answering questions and implementing the law enacted at the end of 2020. You can help nonprofit advocacy efforts to secure legislative solutions and helpful guidance by completing the brief form: Let us know how COVID-19 is affecting your nonprofit.
- Court Blocks Ban on Implicit Bias Training: Even before President Biden revoked President Trump’s Executive Order 13950 that sought to ban workplace trainings on implicit bias and racial equity, a federal court in California had issued a nationwide preliminary injunction enjoining its enforcement. In response to the injunction, the Office of Federal Contract Compliance Programs (OFCCP) at the Labor Department issued a Notice Regarding Executive Order 13950, suspending both the enforcement of, and collection of information under, EO 13950. In that Notice, the OFCCP indicated that it will shut down the hotline, cease investigating allegations of noncompliance, and refrain from posting any additional Requests for Information. It further suspended enforcement of the contract clauses mandated by the now-revoked Order.
- IRS Issues Report on Taxpayer First Act Compliance: In one of its final acts under President Trump, the Internal Revenue Service submitted the Taxpayer First Act Report to Congress, providing a comprehensive set of recommendations offering to “reimagine the taxpayer experience, enhance employee training, and restructure the organization to increase collaboration and innovation.” Regarding charitable nonprofits and other tax-exempt organizations, the report highlighted what the IRS considers a success in rolling out mandatory electronic filing (e-file) requirements after passage of
the Taxpayers First Act of 2019. In recent months, however, nonprofits have complained that the e-file system has unexpected costs and burdens that belie the ease promised by supporters. The report also boasts of IRS success in meeting the requirement that it provide notice before revocation of tax-exempt status for failure to file tax returns. As previously reported, the IRS did issue notices to nonprofits it claimed had failed to file Form 990s for three consecutive years, but had to revoke those cancelation notices when a congressional
subcommittee pointed out that the revocations occurred before the filing deadline for the informational tax returns.
Governors Call for Budget, Tax Action
In their State of the State addresses and budget messages, Governors across the country are attempting to set their agendas for the year while grappling with the fluctuating budget reports and projections. Governors in Connecticut, Indiana, Iowa, Kentucky, New Jersey, Vermont, Virginia, and Wisconsin promised continued investment in education, childcare, healthcare, housing, broadband, and small businesses. Vermont Governor Scott and Washington Governor
Inslee also called for reducing the costs of unemployment insurance on employers, or at least reducing increases.
Facing revenue uncertainties and concerns that Congress may not provide sufficient aid to the states, New York Governor Cuomo has proposed increasing income tax rates for high income earners and cutting rates for the middle class. Late last year, Illinois’ Governor announced more than $700 million in spending cuts, including grant reductions. In the District of Columbia, with revenue projections down $2.5 billion from
pre-pandemic levels, the Mayor has already begun cutting services often run by nonprofits, with potential deeper cuts next year.
Arizona Governor Ducey called for tax reform and smaller government, and Idaho Governor Little is proposing $450 million in tax relief through one-time relief and permanent tax cuts. Nebraska Governor Ricketts, who led property tax reform efforts last year, proposed spending controls by limiting property tax increases to three percent and pushing “new local spending constraints” measures. Maryland Governor Hogan released an “economic recovery budget” calling for $1 billion in tax and stimulus relief while including “no tax increases, layoffs, or cuts to essential services.” Likewise, Governors in Georgia, Iowa, North Dakota, South Carolina, and South Dakota have promised no tax increases, and Arkansas Governor Hutchinson and South Carolina McMaster both proposed cuts to individual income tax rates.
COVID Liability Limits a Top 2021 Priority in the States
Lawmakers in 17 states have introduced at least two-dozen bills that seek to protect businesses, including nonprofits, from lawsuits by individuals claiming injury and illness due to COVID-19. Generally, the legislation would limit the liability for any person, including nonprofits, from civil actions arising from COVID-19 on their premises or adversely affecting their employees. The bills would provide safe harbors for entities that operate in substantial compliance with health regulations or orders. Typically, the proposals do not extend protections for gross negligence or willful or wanton misconduct. A few states – Arkansas, Indiana, and Maryland – would
expressly preserve workers’ compensation claims by employees. Wisconsin’s bill would apply the liability protections retroactively to March 1, 2020. Here are the states and bills with pending legislations (or enacted in the case of Maryland): Alabama, Alaska, Arkansas, Connecticut, Florida, Illinois, Indiana (S.B.1, H.B.1002), Kentucky (S.B.5, H.B.10), Maryland, Missouri (S.B.42, S.B.51, H.B.759), Montana, Nebraska (L.B.52, L.B.139), New Hampshire (H.B.149, H.B.255), North Dakota (H.B.1175, H.B.1271), South Dakota, Virginia, and Wisconsin.
Debate Grows Over Confidential Disclosure of Donor Identification
Lawmakers in three states have introduced legislation this year to prohibit public agencies from collecting and/or disclosing donor information. This issue is currently before the U.S. Supreme Court, which is reviewing an appellate court decision that upheld California law allowing the state to collect that information on a confidential basis. Bills in Iowa (HSB 28 / SSB 1036), Nebraska, and Tennessee would prohibit any state or local government agency from requiring donor disclosures or compelled release of personal information by tax-exempt organizations. Personal information is defined in the Tennessee bill as any “list, record, register, registry, roll, roster, or other compilation of data of any kind that directly or indirectly identifies a person as a member, supporter, or volunteer of, or donor of financial or nonfinancial support.” The prohibitions do not extend to law enforcement investigations
pursuant to warrants or discovery. The Iowa and Tennessee measures create civil and criminal penalties for violation of the proposed laws. Going in a different direction, legislation in New York would allow the Attorney General to continue receiving unredacted federally required donor disclosures on Form 990 Schedule B, but would require that the information be kept confidential and would prohibit disclosure of personal and private data.
When the Message Really Matters
When communicating with the President of the United States and leaders of the U.S. Congress, prudence requires making one’s case with data and clarity. Let’s take a closer look at the nonprofit coalition letter discussed at the top of this newsletter (and is open for additional nonprofit signers!) to see if prudence would be satisfied.
The first question is why send the letter at all? Quite simply, history has shown that unless nonprofits have a seat at the policymaking table, we are forgotten. There are lots of squeaky wheels from for-profit businesses and government groups demanding attention at those policy tables, so if nonprofits are politely going about our work of serving our communities
while assuming policymakers will notice, then we’re left out of any policy solutions. The nonprofit coalition letter is written to demonstrate the unique contributions of nonprofits – to demand notice and a seat at the policy table.
Another question is why nonprofits feel they should receive relief? The letter answers this question by noting that while the COVID relief enacted in 2020 was helpful in many ways, it fell far short of what is truly required. For instance, the 2020 relief included forgivable loans for some charitable nonprofits, but not all – most notably nonprofits with more than 500 employees that have the capacity to serve more people. The coalition letter further underscores that last-year’s relief awkwardly inserted “nonprofits into existing or predetermined programs designed for for-profit businesses,” causing unintended consequences by not being tailored to the realities of nonprofit operations. It
makes the case for specific, dedicated policy solutions that will enable nonprofits to help rebuild our communities. The letter warns, “Without immediate relief from Congress and the Administration, charitable organizations will not have the capacity or resources to be the backbone of communities upon which the American people rely.”
Data usually help in making the case; what data are presented that show how nonprofits have fared? The letter explains that the pre-pandemic nonprofit workforce of 12.3 million dedicated employees has lost nearly 930,000 nonprofit jobs, including 51,000 in December 2020, according to Bureau of Labor Statistics data. It also lays out that nonprofit revenues are likely to decline sharply in 2021 as individuals are less able to make charitable donations and “state and local governments make draconian spending cuts to human services and other programs frequently performed by charitable nonprofits.”
The letter states, “We anticipate that 2021 will be even more devastating to the work of nonprofits,” thus reinforcing the point that relief is needed now to save and restore jobs, a clear priority of policymakers.
So what are nonprofits seeking? Here, the letter calls for relief in four essential areas, building on prior legislation and nonprofit community letters. Combined, the four policy “asks” address the broad challenges and concerns of most charitable nonprofits, whether large or small, urban or rural, and regardless of subsector. For each issue, the letter stresses why the requested policy is important to charitable organizations, how it will support COVID relief and recovery, and what the legislation should specifically provide.
As noted above, the letter alone is just the first step. Now, nonprofits from coast to coast and from all subsectors need to transform the letter’s words into a mighty roar demanding the attention of policymakers so they recognize the irreplaceable roles you play in their congressional districts and states. America needs its charitable nonprofits to be strong to get us through the multiple crises our nation is currently enduring. Sign On Now!
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