A Summer of Advocacy Progress
Nonprofit advocates have been working full time since the pandemic began seeking to adapt public policies to enable nonprofits to provide relief to people and recovery in communities. With a significant COVID-relief bill stuck in impasse and passage far from certain, have these advocacy efforts generated any measurable impact on the core nonprofit policy priorities outlined in the new Nonprofit Community Letter? Yes, and quite a lot, actually.
Perhaps the most visible sign of growing support for the nonprofit agenda are sign-on letters from Senators and Representatives. In mid-August, Senators Lankford (R-OK) and King (I-ME) sent a letter from 24 Senators urging their leaders to “commit to providing charitable nonprofits with the support that they need to continue serving our constituents and our communities.” Similarly, Representatives Moulton (D-MA) and Fitzpatrick (R-PA) sent a letter to House leaders calling for inclusion of priorities identified in the new Nonprofit Community Letter in the next COVID relief package. Combined with Senate and House letters sent this spring, the new letters identify 33 Senators and more than 150 Representatives committed to “help charitable nonprofits respond to the fallout from this pandemic and continue to serve our communities in its aftermath.”
As for the specific policy asks, nonprofits have made progress:
Promoting Charitable Giving: In early June, five Senators participated in an unprecedented Zoom video call hosted by a dozen national nonprofits, From Common Ground to Congressional Action: Advancing the Universal Charitable Deduction. More than 4,400 nonprofit professionals from all 50 states registered to see and hear each of the Senators make a strong, consistent case for improving the above-the-line deduction in the next COVID-19 package. They gave their perspectives on how Congress can strengthen the ability of nonprofits to help relief, recovery, and rebuilding during the pandemic crisis and beyond, took questions, and explained what they are doing to enact improved charitable giving incentives this year. The Senators subsequently introduced the Universal Giving Pandemic Response Act (S. 4032) that follows through on their commitment to expand charitable giving during the current health and economic crisis. A House companion bill, H.R. 7324, was also introduced in June by Representatives Walker (R-NC) and Pappas (D-NH).
Paycheck Protection Program Reforms: Throughout the spring, nonprofits worked to counter decisions by the SBA and Treasury that unnecessarily restricted and burdened the ability of charitable nonprofits and other employers to secure Paycheck Protection Program (PPP) loans and loan forgiveness. The Paycheck Protection Program Flexibility Act corrected many of those challenges and extended the program for another two months. Further, nonprofit advocacy played a role in the introduction of a bill to provide near-automatic forgiveness of PPP loans of $150,000 or less and nonprofits included in bills to provide a second round of PPP loans, albeit with flawed terms for nonprofits.
Relief for Mid-Size Nonprofits: One of the most troubling shortcomings of federal COVID relief is the refusal, to date, to extend Paycheck Protection Program loans to nonprofits with more than 500 employees. The House-passed HEROES Act would extend this important support and provide other supports for nonprofits, but there remains strong resistance in the Sente and the Administration. One alternative approach – access to lower-cost loans for nonprofits through the Federal Reserve’s Main Street Loan Program – is considered largely unhelpful to nonprofits typically averse to borrowing funds to fund operations. Learn more about the nonprofit call for forgivable loans. Most nonprofits, and particularly those mid-size organizations left out of the CARES Act, would benefit from the WORK NOW Act (S. 3747/H.R. 7495) that proposes a $50 billion grant program to support nonprofit jobs. See the recent op-ed article and news release acknowledging nonprofit advocacy efforts. Nonprofits would also benefit from improvements to the Employee Retention Tax Credit and the Safe and Health Tax Credit incorporated in the HEALS Act introduced by Senate Republicans in late July. Importantly, there is strong bipartisan support for the tax credits.
Unemployment Relief for Self-Insured Employers: In a clear legislative win for nonprofits, Congress unanimously passed the Protecting Nonprofits from Catastrophic Cash Flow Strain Act, a bill that reverses erroneous guidance from the Department of Labor and relieves self-insured nonprofits and other employers from having to pay their states 100 percent of the costs of unemployment benefits paid to former employees. Nonprofits continue to advocate for full federal coverage of these costs. The Senate Republican HEALS Act would increase that coverage to 75 percent (up from 50 percent in the CARES Act), which is progress, but not sufficient to avert additional layoffs and nonprofit closures. Notably, Senator Lankford (R-OK) introduced an amendment (SA 2620) to a separate bill that would provide 100 percent coverage, a critical ask in the new Nonprofit Community Letter.
Yet, while there has been quite a lot of progress in recent months, it has only laid the groundwork for success and nothing is guaranteed. To get where we all want to be, supporters of nonprofits of all sizes and mission areas must continue to engage through direct contact with Senators and Representatives, social media communications, articles, news conferences, and other means.
