Call to Action: Raise Your Voice All Week
Announcing the Nonprofit
#Relief4Charities Week of Action
This week nonprofits throughout the country are mobilizing to urge Congress to pass urgent nonprofit policy proposals in the next round of COVID-19 relief legislation. The #Relief4Charities Week of Action is designed to make lawmakers and staff learn about and take action on each of the four broad issues of sector-wide importance identified in in the new Nonprofit Community Letter delivered today to every House and Senate office.
Each day of this Week of Action is dedicated to a specific issue. Your two Senators, your Representative, and their staff members in DC and in offices in the state also need to hear from you – their constituents – about how each issue affects your ability to serve your community.
Issues of the Day
Your elected officials need a high volume of messages to break through the noise of everything else. All nonprofits are encouraged to email and tweet the messages of the day. Check out @NatlCouncilNPs for updates. Share this plan and the messages of the day with your colleagues, board members, and others to make sure Congress does not leave out nonprofits.
Congress Passes Partial UI Fix for Self-Insured Nonprofits
In the time since the last edition of Nonprofit Advocacy Matters, the Senate and House unanimously passed legislation clarifying that self-insured nonprofits do not have to pay 100 percent of their unemployment bill upfront and wait for repayment from the state. The Protecting Nonprofits from Catastrophic Cash Flow Strain Act (S.4209) fixes problematic guidance from the U.S. Department of Labor requiring nonprofits to fully reimburse states for the costs of their COVID-19 related unemployment insurance (UI) claims and then seek to be repaid half of the money they just paid. Once the President signs the bill into law, which is expected, reimbursing nonprofits will be charged no more than 50 percent for their COVID-19 related UI claims due to a provision in the CARES Act.
In a statement thanking congressional leaders for swift passage of this bipartisan, common-sense bill, the National Council of Nonprofits also made clear that the bill is only a partial fix to the challenges that self-insuring charitable nonprofits are facing. “There is also still much work to do to ensure that charitable nonprofits - our nation’s third largest employer - can keep their employees on the payroll and can continue serving communities across the country,” the statement reads. The concern is that nonprofits still must come up with the funds to pay half the costs of these benefits. Nonprofits that already had to reduce staffs will be forced to lay off even more employees just to have the resources to pay unemployment compensation bills to their states. That is, unless Congress takes action. The Council of Nonprofits statement concludes, “There is broad bipartisan support in Congress for many policies that would enable nonprofit and faith-based organizations to continue doing their vital work at this time when they are needed most." Charitable nonprofits will focus Congress’s attention on the bipartisan solution to this issue on Wednesday, July 15, as part of the #Relief4Charities Week of Action.
The Big Picture
The Negotiations Over What Goes into the Stimulus Bill
The rhetoric in Congress has moved from whether there will be another economic stimulus bill to what will be included in the package lawmakers hope to pass by August. Senate Majority Leader McConnell (R-KY) is no longer calling for a wait-and-see approach and is now saying he’s ready to negotiate major legislation to provide targeted relief. He has stated repeatedly that his “must have” is liability protections, something workers’ rights groups are forcefully opposing. Senate Republicans appear to have softened their previously stated stance against new funds going to state and local governments, but Treasury Secretary Mnuchin this past week repeated the Administration’s refusal to "bail out" Democratic-led states that he claims were poorly run prior to the pandemic.
A major question is how much lawmakers are willing to spend in this next, and likely, last major bill before the November elections. Senate Republicans and the White House have called for a bill costing $1 trillion or less; the House-passed HEROES Act would spend $3 trillion in relief. Democrats in the House have made clear their support for sizable aid to state and local governments, an additional round of checks to low- and moderate-income taxpayers, and extension of expanded unemployment compensation past the July 31 expiration in the CARES Act. The amounts of dollars to governments and to taxpayers are negotiable items based on how much lawmakers are willing to spend. The unemployment issue, while based on dollars, also touches a policy/partisan nerve – the $600/week supplemental payment is called necessary or laziness-inducing, depending on perspective. Most observers expect the debates on liability protections and unemployment to be the most heated and the last items resolved. If resolved – and only if – then progress on the nonprofit-specific issues can be addressed.
- PPP Loan Disclosure: Last week, the SBA and Treasury Announced Release of Paycheck Protection Program Loan Data identifying the names and loan amounts of organizations receiving loans of $150,000 or more. One document, Paycheck Protection Program approved lending through June 30, 2020, identifies more than 130,000 loans to religious, civic, social, and other nonprofits for a total of $13.5 billion. While it has been reported that the data contain many errors, the released information suggests that nonprofits received 2.7 percent of loans, 2.4 percent of dollars loaned, and represent 3.2 percent of all jobs saved. Some nonprofits have expressed concerns about the disclosures, but not Goodwill Industries International. When interviewed for a Politico article, the jobs-training nonprofit explained unapologetically that it took out its PPP loan “to keep essential staff” and said: “The PPP loans served as a lifeline for Goodwill and many nonprofits, allowing them to retain staff and maintain operations as they provide vital services on the frontlines during the pandemic and assist in future recovery efforts.”
- WORK NOW Act Update: Last week, Representative Sanchez (D-CA) introduced the Work Opportunities and Resources to Keep Nonprofit Organizations Well Act (WORK NOW Act), H.R. 7495. The bill seeks to inject $50 billion into frontline nonprofits over the next six months to generate employment for laid off workers and to address the skyrocketing needs in communities for COVID-19 relief and recovery. The grants program would help nonprofit organizations whose workers serve public needs that are growing due to the current crisis retain their employees, scale their service delivery, and hire more workers to meet these essential needs. An identical bill (S.3747) was introduced in the Senate in May. This bill, and other ways for Congress to provide economic support and emergency funding for nonprofits, will be discussed during the #Relief4Charities Week of Action on Thursday, July 16.
- The Politics of Charitable Giving: This month, the Treasury Department and Secretary Mnuchin hailed recent data on 2019 charitable giving as evidence that the Administration’s policies are spreading prosperity across the charitable nonprofit community. They argue that giving reached a near-record level and surpassed 2018 giving. The reality, however, is that giving, when adjusted for inflation, has neither caught up to 2017 giving levels nor shown the surge promised by supporters of the 2017 tax law, as Politico recently reported. Parsing the data, Una Osili with the Lilly Family School of Philanthropy finds that dollars may be up compared to 2018, but donors are down. “It’s wealthier and higher-income households that are giving more and participating more,” she observed in a recent MarketWatch article. The bipartisan policy solution to this challenge will be the focus on Tuesday, July 14, of the #Relief4Charities Week of Action.
- Tracking COVID-19 Paid Leave: In March, Congress passed the Families First Coronavirus Response Act that mandated emergency sick and family leave related to COVID-19. The Treasury Department and Internal Revenue Service have now provided guidance to employers requiring them to report on Form W-2 the amount of qualified sick and family leave wages paid to employees under the Families First Act. The IRS has provided additional information on tax credits for nonprofits and businesses that offer emergency paid sick leave and emergency family and medical leave to their employees.
Reopening Operations and Liability Questions
Congress is expected this month to begin debating an issue that state policymakers have been addressing for months – whether and to what extent laws should shield for-profit and nonprofit entities from lawsuits related to reopening after the pandemic shutdown. To date, legislation in more than a dozen states and executive orders have provided or would provide some liability protections against lawsuits regarding COVID-19. A law signed this week by the Mississippi Governor provides protections for employers against civil litigation upon reopening. A unique feature of the legislation is that it is retroactive to March 14, 2020, the day after the President declared a national emergency. North Carolina now has perhaps the most expansive COVID-19 liability protection, extending immunity for nonprofits, businesses, and individuals from liability for alleged transmission of COVID-19. The immunity applies to nonprofit board members and volunteers. The bill does not limit the ability of workers to file workers’ compensation claims if they contracted COVID-19 in the course of their employment. Finally, the California House unanimously passed a bill to exempt small businesses with 25 or fewer employees from liability for an injury or illness to a person due to COVID-19 based on a claim that the person contracted COVID-19 while at the small business or due to actions of the small business. The exemption would be denied for grossly negligent acts or omissions, willful or wanton misconduct, or unlawful discrimination.
States Advance COVID-19 Grant and Loan Programs
Governors in at least five states in recent weeks signed into law grant and loan programs to support businesses and nonprofits. The new programs rely on federal funds in the CARES Act’s Coronavirus Relief Funds to aid states and localities respond to the pandemic. Michigan now has a $100 million small business restart grant program to provide grants to small businesses and nonprofits with fewer than 50 employees for grant amounts of up to $20,000; it sets aside 30 percent of funding for women-, minority-, or veteran-owned businesses. The New Mexico Small Business Recovery Act of 2020 will provide low-interest loans, available on a first-come, first-served basis, set at half the prime rate to small businesses and nonprofits with revenues less than $5 million. It sets the loan at 200 percent of the small business’ or nonprofit’s adjusted monthly business expenses from the previous calendar or fiscal year, not to exceed $75,000. It requires the loan to be used for ordinary and necessary business expenses.
One law in Vermont included nonprofits under the definition of business for purposes of Coronavirus Relief Fund funding, while a separate measure authorized the use of $213 million to cover numerous programs, including broadband connectivity, housing and homelessness, economic relief expenses, telehealth, and Restart Vermont business assistance program. Georgia is using funds to support numerous programs performed by charitable organizations, such as museums, libraries, mental and substance abuse services, housing, childcare, nutrition and meal delivery, the arts, and education. Utah created the Economic Recovery Program for certain cultural nonprofits, institutions of higher education, and certain small for-profit businesses. Going beyond relief to engagement, a new California law expresses legislative intent for the administration to work with stakeholders, including the Legislature, to develop strategies to assist small businesses, individuals, and nonprofits experiencing economic hardship due to COVID-19.
States Acting to Protect Nonprofits from Unemployment Costs
Since the outset of the pandemic, nonprofits have made the case that the unemployment system was never constructed to withstand an economic shock as severe as the layoffs resulting from COVID-19; organizations that self-insure should not be forced to pay the costs of unemployment benefits paid out because governments ordered operations to shut down. Congress can resolve the problem by paying 100 percent of these unemployment benefits costs, but as federal lawmakers negotiate, their state counterparts are taking action. Montana and North Carolina previously announced that self-insured nonprofits will be held harmless, and several other states, including Massachusetts and Pennsylvania, have delayed the payment dates of invoices hoping Congress will act. Recently, the Governor of New Mexico signed legislation codifying the decision that the state will not charge reimbursing employers any portion of benefits paid to their former employees. Similarly, legislation pending in New Jersey would exempt reimbursing employers from having to make payments in lieu of contributions for benefits paid during the public health emergency. The bills would also protect contributing employers from adjustments to experience ratings due to the pandemic payouts.
Telling the Nonprofit Story – Through Data and Collaboration
Charitable nonprofits typically have difficulty amassing compelling data on impact and a dickens of a time convincing government officials to take notice. Which makes this story all the more impressive – the Comptroller of New York City and an association of nonprofits jointly issued a report telling the nonprofit story.
Earlier this month, Nonprofit New York partnered with NYC Comptroller Scott Stringer to release a new report on the economic impact of NYC nonprofit organizations. The report, The Economic Impact of NYC Nonprofits, provides a comprehensive overview of the state of this vital sector and its workforce before the COVID-19 pandemic. The analysis finds that nonprofits contribute close to $78 billion in economic activity, which amounts to 9.4 percent of the city’s gross domestic product. Nonprofit employees make up 18 percent of the workforce, who are primarily women (64%) and people of color (56%).
In addition to sharing data, the authors recognized the need for advocacy on behalf of the sector. In the joint news release, Comptroller Stringer and Nonprofit New York urged that “the needs of the nonprofit sector must be at the forefront of all relief and recovery efforts.”
“The nonprofit sector cannot be sidelined during conversations about the city’s economic health and stability,” said Comptroller Stringer. “Our nonprofits provide essential cultural, educational, health and social services to millions of New Yorkers. While tough budgetary decisions must be made in this crisis, we cannot nickel and dime the very same nonprofits we will rely on to support our most vulnerable communities and we cannot afford to lose the jobs and revenue that the sector contributes. Any plan for New York City relief and recovery must prioritize our nonprofits who are the essential fabric of our social safety net.”
Meg Barnette, CEO of Nonprofit New York, concurred. “At this profound and urgent moment, amidst a pandemic that has exposed the dangerous fragility of our social safety net, and an uprising for racial justice that has exposed deep and systemic racial inequality, New York’s nonprofits are a relentless, collective force for good.” She said further, “They have put their mission and communities first, managed immense change with no lead time, and found ways to respond to increased needs with diminished resources. But they cannot support families facing trauma, they cannot help organize for justice, they cannot lift up communities, indeed many cannot even survive without the relief, funding, and respect that reflect their critical role in our City’s economy and communities.”
Read the press release and the full report.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.