We thank the several dozen readers who responded to our poll asking how we can improve Nonprofit Knowledge Monthly. Among the varying responses was one dominant theme: make it easier to digest! While we’re working on the new visual design to be unveiled in the New Year, we’ve returned to our prior practice of publishing short intros to our stories with links to the full article. We hope this makes it easier to scan and absorb the content this month – which includes:

• How nonprofits can easily accept cryptocurrency;
• Obtaining business credit card accounts for your nonprofit – a subject with a sometimes-overlooked equity component;
• Updated data and analysis of how nonprofits are weathering the pandemic, with a big reveal on how much funding charitable nonprofits received from the Paycheck Protection Program; and
• Tax issues that your nonprofit may need to be aware of.

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What Your Nonprofit Needs to Know About Cryptocurrency Donations

With so many ways for nonprofits to accept cryptocurrency donations, you don’t need to turn away donors who wish to donate their Bitcoin, Ethereum, or other coins. It’s a new technology that is constantly evolving, and it’s understandable if you have some apprehension or confusion about how it all works. However, with so many tools available at your disposal, it is simple to get started.

Why Accept Donations in Cryptocurrency?

On top of all the other fundraising strategies nonprofits have to master, you may be thinking that the additional hassle of figuring out cryptocurrency donations may not be worth it. Yet, cryptocurrency has reached and sustained a valuation of over $2 trillion in 2021, and many people are now sitting on appreciated coins with not many places to use them. On the flip side, the IRS incentivizes donations of crypto similarly to gifts of stock. Cryptocurrency is considered property and donating it is a nontaxable event. This means that donors don’t have to recognize capital gains and, if they itemize deductions, could potentially deduct up to the fair market value of the donated asset. Accepting cryptocurrency isn’t as difficult as you may think – and it can open up the opportunity to engage new donors for your nonprofit.

Read the full article on accepting cryptocurrency donations by Tina Roh of Every.org.

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Do Nonprofits Really Need Personal Guarantors on Their Credit Accounts?

One challenge that many nonprofits face is the requirement by many mainstream financial institutions that nonprofit staff or board members provide personal social security numbers and guarantees to open an organizational credit card account.

Personally guaranteeing the organization’s credit card can negatively affect the individual’s credit score. The risk runs both ways, as the guarantor’s credit behavior can also affect the nonprofit. As a matter of equity, nonprofits operating in communities and with leadership of varying wealth should not have to rely on employees or volunteers to provide a credit history and social security number in order to secure an organizational credit card. Thankfully, alternatives for nonprofits exist.

Read about solutions in this article on our blog.

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Nonprofit Helpers Need Help

Since we shared the Federal Reserve’s new report, “Perspectives from Main Street: The impact of COVID-19 on communities and the entities that serve them” last month, we were given access by the Fed researchers to a subset of the survey data covering 2,237 nonprofits that provide direct services to low- to moderate-income communities. Analyzing that data and comparing it with other recent reports from organizations such as Urban Institute, Giving USA, and the Fundraising Effectiveness Project, we published a new article, “The Data Show What We Know: The Nonprofit Helpers Need Help.” We also were able to access updated data on the Paycheck Protection Program to calculate exactly how much funding charitable nonprofits received from those forgivable PPP loans through the end of the program in May. As reported in our article, Small Business Administration records show that charitable nonprofits received approximately $50 billion in forgivable PPP loans in 2020 and 2021. That funding helped support more than 6.2 million nonprofit jobs.

Further advocacy will be needed to ensure that essential relief measures – such as employee retention credits and funds from the American Rescue Plan Act – are allocated and improved to support the work of charitable nonprofits in our communities.

Read more about data on how the pandemic is affecting nonprofit sustainability in the full article

View the webinar held by the Federal Reserve on December 2, “Impact of COVID-19 on Organizations Serving Low- to Moderate-Income Communities,” featuring David Thompson, Vice President of Public Policy for the National Council of Nonprofits, Sabeen Perwaiz of the Florida Nonprofit Alliance, and other speakers.

Tax Issues

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; talk to your nonprofit’s accountant for specific details.

ERTC Regulatory Guidance Issued: 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. On Monday, the IRS issued Notice 2021-65 to provide guidance to employers on dealing with the retroactive repeal of the Employee Retention Tax Credit for the fourth quarter of 2021. The Notice explains how nonprofits anticipating the ERTC are to revise their payments and paperwork.

The Notice provides that no waiver of penalties is available for payments due after December 20, 2021. The IRS may consider reasonable cause relief for an employer that does not qualify for relief under the Notice. If they haven’t already done so, nonprofits with employees should consult their accountants about this issue.

The National Council of Nonprofits’ position on the issue is this: the guidance may be as good as the IRS thought it could provide under the law, but it is not good enough. The Notice provides very narrow accounting relief for charitable nonprofit employers suffering major staffing challenges because they cannot raise prices or reimbursement rates needed to increase salaries. The ERTC was a lifeline for nonprofit employers and employees; it must be restored and extended. Add your voice to this effort:

Parting Note: Can We Go Back to Audio Now?

New research suggests that turning cameras off reduces exhaustion and promotes engagement – particularly for women and newer employees. Video meetings and webinars are fabulous tools to help people connect, but don’t let them be the only tool in your toolbox.

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