The Data Show What We Know:
The Nonprofit Helpers Need Help
New data from the Federal Reserve provide further evidence that the public served by nonprofits continues to be at risk. In the face of the ongoing public health and economic crises, too many nonprofits are still struggling to meet increased demands for services, confronting a combination of decreased revenue and expenses that are higher than pre-pandemic. With Giving Tuesday kicking off the giving season tomorrow, donors need to know it’s important to increase contributions to charitable nonprofits this year – not to ease off.
The National COVID-19 Community Impact Survey administered by the Federal Reserve System, in partnership with the networks of the National Council of Nonprofits and seven other national nonprofit organizations, was designed to track the significant impact the pandemic has had on low- to moderate-income communities and the entities serving them. It was created to amplify the collective voices of people working on the frontlines in distressed communities. The results are alarming. Continue reading "The Data Show What We Know: The Nonprofit Helpers Need Help."
SPECIAL INVITATION: Join the Federal Reserve researcher who conducted the survey, Nishesh Chalise, Director of Community-Based Policy and Analysis, as well as speakers from the National Council of Nonprofits and other organizations for a discussion of the survey findings on Thursday, December 2, at 3:00 pm Eastern.
Long To-Do List, Little Time To Do It
With a potential federal government shutdown looming, Congress must agree to an extension of all federal funding in a few days and raise or suspend the federal borrowing limit in a matter of week, all while Democratic majorities seek to advance their highest legislative priority by the end of the year. A Continuing Resolution (or “CR”) funding all departments and agencies of the federal government is set to expire on December 3; the latest predictions call for an extension to mid- to late-January. On the federal government’s borrowing authority (Debt Ceiling), Republicans have generally refused to participate in a bipartisan solution, urging instead that Democrats attach a fix to a budget reconciliation law that will receive only Democratic votes. Senate Majority Leader Schumer (D-NY) has so far rejected this approach, but action on the Build Back Better Act (H.R. 5376), a budget reconciliation bill, is his primary agenda item for the month.
The Build Back Better Act narrowly passed the House on November 19 with no Republican votes. The $1.75 trillion bill includes many of President Biden’s “human infrastructure” policy priorities, such as universal Pre-K, child care supports and tax credits, home care services, paid leave, housing aid, and $550 billion in programs to address climate change. Read the National Council of Nonprofits’ Review of Nonprofit Priorities in the Build Back Better Act. Senate negotiators – notably Leader Schumer, Finance Committee Chair Wyden (D-OR), and moderates Manchin (D-WV) and Sinema (D-AZ) – are expected to work through the details of the 2,100-page bill to try to reach an agreement that will secure the votes of all 50 Democratic Senators. Sticking points reportedly remain over the paid-leave provision, taxes, and various energy and other incentives. No resolution to these and other issues appears readily available, meaning that the bill will be open to changes for several more weeks, giving advocates for charitable nonprofit time to make the case for essential priorities (see Action Item, next).
Vaccination and Testing Requirements Status Update
The Biden Administration issued three sets of workplace requirements related to COVID-19 vaccinations over the past two months, one of which is on hold due to court challenges and two go into effect in less than 10 days. Different rules apply to different nonprofits, depending on an organization’s size, mission, and (see lead state article) location. Here are the basics and additional resources:
OSHA Emergency Temporary Standard: The rules that would cover the most employers – the Emergency Temporary Standard (ETS) from the Occupational Safety and Health Administration – would require all employers with 100 or more employees to ensure their workers are vaccinated or regularly tested for COVID-19, with exceptions for certain employees. OSHA has provided extensive guidance on the application of the standard. There remain several questions for which the nonprofit community is seeking answers from OSHA. See COVID-19 Vaccination and Testing Requirements for Larger Employers from the National Council of Nonprofits.
Standard Stayed: The Standard is currently in limbo because a federal circuit court has temporarily blocked the rule and ordered OSHA to "take no steps to implement or enforce" the ETS "until further court order." Multiple lawsuits have been consolidated into one proceeding before the 6th Circuit Court of Appeals. Additional rulings are expected in the coming days and weeks.
Federal Contractor Executive Order: This executive order issued in September requires federal contractors to ensure that individuals working on or in connection with a federal contract or “contract-like instrument” shall be fully vaccinated for COVID-19. There is no exception for testing employees. Generally, the agreements are governed by Federal Acquisition Regulations and do not apply to federal grants – the form of agreement applicable to most federal funds that flow to nonprofits. The Safer Federal Workforce Task Force has issued extensive instructions in the form of the COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors.
CMS Interim Final Rule: Health care facilities that participate in the Medicare and Medicaid programs must require full COVID-19 vaccinations for all eligible staff by January 4, 2021. There is not a testing opt-out or exemption. The requirements from the Centers for Medicare and Medicaid Services (CMS) apply to clinics, home health agencies, hospitals, intermediate care and long-term care facilities, and 10 other types of healthcare operations. The CMS rule isn’t limited to paid staff, but also applies to students, trainees, volunteers, and outside contractors, with some exceptions for telework. Learn more about the CMS rule.
- ERTC Regulatory Guidance Sought: With the enactment of the Infrastructure Investment and Jobs Act, nonprofit and other employers retroactively lost access to the Employee Retention Tax Credit (ERTC) for the fourth quarter of 2021. The repeal of the credit halfway through the quarter could subject employers to penalties and other liabilities that would not have applied had the ERTC remained in effect. The National Council of Nonprofits sent a letter to the IRS urging the agency to announce that employers will not be penalized for using the ERTC in the first half of this quarter (that started on Oct. 1) and provide other relief. An IRS official is quoted as saying: “Rest assured, we are aware of this problem. We were aware of the problem when we saw the legislative language.” Clarifications could be issued this week.
- Payment Due for Deferred Payroll Taxes: The Internal Revenue Service is reminding employers they need to pay off part of the deferral of payroll taxes permitted last year under the Coronavirus, Aid, Relief and Economic Security (CARES) Act. The CARES Act allowed employers to defer the deposit and payment of the employer's share of Social Security taxes during the "payroll tax deferral period" that began on March 27, 2020 and ended December 31, 2020. Fifty percent of the deferred payments must now be deposited by December 31, 2021, to be treated as timely and avoid a failure to deposit penalty. The IRS website provides more information on how to pay the CARES Act deferral amount.
- COVID EIDL Funds Available: There is money still available under the Small Business Administration’s COVID Economic Injury Disaster Loan (EIDL) program and the SBA issued updated guidance to help explain how to apply. The guidance explains, among other things, that (1) EIDL loan and Targeted Advance applications will be accepted until December 31 and processed thereafter until funds are exhausted; (2) Supplemental Targeted Advance applications will be accepted until December 31, but the SBA may be unable to process some due to legal requirements; and (3) Borrowers can request increases up to their maximum eligible loan amount for up to two years after their loan origination date, or until the funds are exhausted, whichever is soonest. The EIDL program provides the low-interest loans, but does not have a loan forgiveness option. SBA strongly encourages submission of Supplemental Advance Applications by December 10. All Applications are due by December 31.
Sign-On by Dec. 1
Support the Universal Charitable Deduction
The universal charitable (non-itemizer) deduction will expire at the end of the year unless Congress takes action to extend it. The giving incentive for individuals who take the standard deduction was created – on a bipartisan basis – in the early days of the pandemic to generate additional donations to support the work of charitable organizations. It was increased at the end of 2020 to the current level of $300 for individuals and $600 for couples, but is set to expire on December 31, 2021. The National Council of Nonprofits joins the Charitable Giving Coalition in encouraging nonprofits to sign onto a letter urging congressional leaders to support expanding and extending the universal charitable deduction in year-end legislation. Read the letter and sign on.
States Enacting a Patchwork of Conflicting Vaccination Restrictions
In recent weeks, a dozen states have convened special sessions in opposition to federal vaccination and testing requirements (see federal article, above). As one writer has observed, “Many of the new anti-vaccine mandate laws are either symbolic or vulnerable to federal preemption, or in some cases both.” However, the new state laws are setting the stage for further litigation, while creating confusion for nonprofit and other employers trying to keep their workplaces safe. The laws address numerous issues, ranging from clarifications to outright bans. Here is a brief summary:
- Clarification of Exemptions: Many of the laws align with federal regulations by exempting employees with medical conditions or religious objections (Alabama, Arkansas, Iowa, North Dakota, Utah, West Virginia). The Kansas law requires employers to accept claims for these exemptions without any questions. Florida went much further and expanded enforceable exemptions to include pregnancy or anticipated future pregnancy, and past recovery from COVID-19.
- Banning Proof of Vaccination: Both North Dakota and Tennessee now prohibit employers from requiring employees to show they have been vaccinated – a provision directly in conflict with federal regulations.
- Paying for Testing: Employers in Arkansas, Florida, and Utah must pay for employee COVID tests, although Arkansas may spend some American Rescue Plan Act funds for this purpose.
- Unemployment Insurance Eligibility: Arkansas, Iowa, and Tennessee expressly state that employees who lose their jobs for refusing to get vaccinated remain eligible for unemployment benefits. The Iowa law makes clear that an employer’s contribution rate or experience rating under the state's unemployment system would not be affected, and no penalties would be imposed. It is unclear whether this protection extends to reimbursing employers. Learn more about unemployment insurance and the different types of employers.
- Outlawing Vaccination Mandates: The states going the farthest in banning employer vaccination mandates are Florida, Texas (by executive order), and West Virginia.
It must be noted, however, that not all action in the states is hostile to vaccinations and workplace safety protocols. The Mayor of New York City issued an executive order mandating that all city workers and city-contracted nonprofit workers get vaccinated. Vermont’s Governor signed a bill last week empowering municipalities to adopt their own temporary indoor mask mandates. In addition, not all special sessions resulted in new laws. Only one of the 36 bills introduced in Idaho’s special session earlier this month made it past the state’s Senate: a non-binding memorial expressing disapproval of vaccine mandates.
Other State Legislative Highlights
- Mental Health Interventions: California Governor Newsom signed the Community Response Initiative to Strengthen Emergency Systems (CRISES) Act that creates a three-year pilot program to replace policing with mental health interventions. The bill would provide grants to nonprofit community-based organizations to engage in emergency response activities that do not require a law enforcement officer. The program will provide grants of $250,000 per year for two years to stimulate and support involvement in emergency response for emergencies including crises in mental health, intimate partner abuse, community violence, substance abuse, and natural disasters.
- Repealing Redundant Reporting: Charitable nonprofits registered in New York will not have to file their Form 990s and accompanying documents with the Department of State in addition to the Charities Bureau of the Attorney General’s Office, thanks to a new law signed by Governor Hochul this month. Nonprofits will continue to file annually with the Charities Bureau, which has enforcement authority over the sector.
Addressing the Nonprofit Workforce Crisis … the Nonprofit Advocacy Way
When organizations dedicated to serving the public good can’t secure the workforce to provide vital services, the whole community suffers. That is the case right now, as thousands of nonprofit jobs go unfilled and nonprofits around the country are doing their part to raise awareness of the challenge to whole communities, to collect and analyze data to identify the problem and solutions, and take action to protect our communities.
This month, nonprofit leaders have been speaking out, raising the alarm about the problems facing nonprofits that can’t hire the staff they need. Rick Cohen of the National Council of Nonprofits appeared on television in Cleveland, Ohio declaring the high job vacancy rate in nonprofits “a potential tragedy at hand. When we have a worker shortage, that means people in the community that can't get access to services that they need.” Additional news stories about the growing crisis have appeared in Connecticut, New York, and across the country on dozens of Scripps TV affiliates.
Relying on news reporting isn’t enough. Heather Iliff, President and CEO of Maryland Nonprofits, recently wrote in an op-ed, “Nonprofit staff are exhausted with extended long hours because of increased demands for services and staff vacancies” She points to government contracts that “don’t cover even the basic costs of services” as one reason for low wages. To Iliff, “Where some see a labor shortage, we see a shortage of fair wages.” In testimony before the Massachusetts Legislature recently, Michael Weekes, President and CEO of Providers’ Council, essentially agreed, calling on the Commonwealth to provide parity in compensation for human service workers. Weekes was the person who “blew the whistle” on the nonprofit workforce vacancy crisis in the Not simply Help Wanted – but Help Needed, first published in this newsletter.
As of this writing, more than 900 nonprofits in 49 states have responded to the call for information about the jobs vacancy crisis by completing the Survey on Nonprofit Workforce Shortage. The networks of the National Council of Nonprofits posted the online survey to gauge the scope of the workforce shortage problems for charitable organizations and determine the impact on their abilities to advance their missions. A preliminary analysis (the survey is still open for responses) found that that 15% reported job vacancy rates of between 10% and 19% and a troubling 26% responded that they had job openings for 20% to 29% of their positions. Twenty-seven percent reported that their waiting list had grown to more than a month due to job vacancies and one organization shared that it has more than 1,500 children waiting for services. The report further explores the causes of the job vacancies and solutions identified by survey participants. See Preliminary Analysis: The Scope and Impact of Nonprofit Job Vacancies. And complete the survey to help generate more useful data.
In a regional forum to be held Monday, December 6, nonprofit leaders from Connecticut, Massachusetts, and Rhode Island are coming together to provide testimonials and advance solutions to an audience of policymakers and the media. Organizers explain that as attention has turned from COVID relief to recovery, “nonprofits face unprecedented challenges attracting and retaining staff of all skill levels and salaries.” They further assert that while workforce shortages across industries have been well documented, the shortage in the nonprofit sector has been amplified by historic underfunding. The Regional Forum on Nonprofit Workforce Crisis, sponsored by the CT Community Nonprofit Alliance, Providers’ Council (MA), and the Rhode Island Community Provider Network, will give state and federal policymakers the opportunity to hear the magnitude of the crisis from the people living it and learn how neighboring states in the region are planning to resolve the problems.
Awareness, analysis, and action – these truly are all hallmarks of nonprofit advocacy in action.
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