welcome to the virtual nonprofit “town hall” online town hall... · cares act –cash to...

Welcome to the Virtual Nonprofit “Town Hall”

David Heinen

North Carolina Center for Nonprofits



ConnectLearn

Advocate


To facilitate conversations . . .

Important Disclaimers


If you can read this fine print, you are sitting too close to your screen!

COVID-19 and nonprofits


Center survey of nonprofits

• About 700 responses from 70+ counties

• Sharing big picture needs and data with funders,

Governor’s Office, members of Congress, and

legislative leadership

• Goal is to get nonprofits the help they need and to tell

nonprofits’ stories


Center survey of nonprofits


Resources to address needs


Resources to help nonprofits and individuals

• Federal government (can take on debt)• Paid leave (and reimbursement for nonprofits)

• Emergency loans and grants

• Flexibility on grant/contract requirements

• Tax relief (individuals and nonprofits)



• Federal and state government ($3.9 billion in UITF)• Unemployment benefits (individuals and nonprofits)

• State government (about $3 billion in available funds)• Grant/contract relief

• Tax relief

• CSL relief



• Private funders ($10 billion in assets)• Funding flexibility - general operating support

• Some ability to meet specific new needs

• Collaboration among funders

• Using the Center’s survey to help match funders with needs


Stay at home policies


Executive Order No. 121

• “Stay at home” executive order issued by Governor

Cooper • Effective March 30 at 5 p.m. through April 29, North

Carolinians generally need to stay at home

• Prohibits mass gatherings of more than 10 people

• Closes some business operations unless they are “essential

business operations”


What nonprofit operations are “essential”

• Nonprofits that operate within social distancing

guidelines

• Healthcare and public health operations, including

hospitals, clinics, health centers, and mental health and

substance use disorder providers

• Human service operators (defined broadly)


What nonprofit operations are “essential”

• Nonprofits that provide charitable and social services,

including food banks and other organizations that

provide food, shelter, social services, and other

necessities of life to economically disadvantaged

residents, individuals with disabilities, and others

needing special assistance

• Religious entities


Local “stay at home” orders

• Statewide order does not necessarily preempt local

orders

• As COVID-19 spreads more rapidly in some parts of the

state, some municipalities or counties may issue more

restrictive “stay at home” orders


State resources to respond to COVID-19


•DHHS: www.ncdhhs.gov

•Volunteer resources:

•www.volunteernc.org

•[email protected]

•NC 2-1-1: www.nc211.org


http://www.ncdhhs.gov/

http://www.volunteernc.org/

mailto:[email protected]

http://www.nc211.org/

Government relief for nonprofits and

individuals


Federal response legislation

1. Coronavirus Preparedness and Response

Supplemental Appropriations Act, 2020

2. Families First Coronavirus Response Act

3. Coronavirus Aid, Relief, and Economic Support Act

(CARES Act)

4. U.S. House is considering an additional stimulus bill


Families First Coronavirus Response Act

• Free testing for COVID-19

• $2 billion in unemployment assistance

• $1 billion in food aid

• Increased funding for Medicaid

• Suspends SNAP work requirements

• Emergency paid sick leave and FMLA


Emergency Paid Sick Leave

• Required for employers with fewer than 500 employees

• Two weeks of paid sick leave at regular rate of pay for

quarantine, seeking diagnosis, or preventative care for

COVID-19

• Two weeks of paid sick leave (2/3 regular rate of pay)

for caring for sick or for children out of school or day

care


Emergency Paid Sick Leave

• Employers eligible for refundable payroll tax

reimbursement – so this applies to nonprofits• Amount is capped at $511/day for individuals seeking

diagnosis or self-isolating

• Amount is capped at $200/day for individuals caring for

others (including children out of school/day care)


Emergency Paid Family and Medical Leave

• Required for employers with fewer than 500 employees

• Up to 12 weeks of job protection for employees who are sick

or caring for others

• Up to 10 weeks of paid leave at 2/3 regular rate of pay (after

first 10 days of unpaid leave) for employees who are sick or

caring for others


Emergency Paid Family and Medical Leave

• Exception for employers with fewer than 25

employees that have major changes in business

operations and won’t be rehiring staff

• Employers eligible for refundable payroll tax

reimbursement – so this applies to nonprofits• Amount is capped at $200/day and $10,000 per calendar

quarter for each employee


Emergency Paid Sick and Family Leave

• New clarification: “Stay at home” order can be qualifying event

• New clarification: No paid leave for workers who can telework

• New clarification: Shutdown of business negates paid leave

requirement

• New clarification: Small employers (50 or fewer employees)

may be exempt from providing paid leave due to school

closures/child care issues if it would jeopardize viability of

business operations


Federal response – SBA emergency loans

• Economic Injury Disaster Loan (EIDL) approved for NC small business/nonprofits suffering substantial economic injury COVID-19 • Up to $2 million in assistance to pay fixed debts, payroll,

accounts payable, and other bills that can’t be paid because of the disaster’s impact

• Interest rate is 2.75% for nonprofits (3.75% for businesses)• SBA offers long-term repayment to keep payments

affordable, up to a maximum of 30 years


Federal response – IRS filing extensions

• April 15 deadlines pushed back to July 15 for

individuals and businesses

• No extension of nonprofit filing deadlines


CARES Act – Cash to Individuals

• Direct payments to Americans - $1,200 per adult and

$500 per child ($3,400 for a family of four)

• Various emergency unemployment benefits

• Emergency loans and grants for nonprofits and

businesses


CARES Act – Paycheck Protection Program

• SBA 7(a) forgivable loans• Available to nonprofits with 500 or fewer employees

• Cover costs of payroll, health/retirement benefits, rent,

mortgage, utilities, and debt

• Loans for up to 2 ½ months of payroll ($10 million

maximum)

• No collateral or personal guarantee required

• Fully forgivable if organization maintains payroll (or rehires

furloughed workers) through June 30


CARES Act – Emergency Economic Injury Grants

• Work in conjunction with EIDL loans

• $10,000 grants for immediate support to

organizations

• Paid out within three days

• Part of EIDL application process – may be granted

even if organizations don’t ultimately qualify for EIDL


CARES Act – Mid-Sized Loan Program

• New loan program• Available to nonprofits with 500-10,000 employees

• Interest rates capped at 2% with no interest or principal

due for six months

• Not forgivable

• Must retain 90% of workforce at full salary and benefits

through September 30, 2020


CARES Act – Employee Retention Tax Credits

• Available to organizations that don’t qualify for PPP• Refundable payroll tax credit of half of employees’ salaries

(up to $5,000 per quarter)

• Must have been in operations prior to 2020 and either:

• Wholly or partially shut down due to COVID-19

• 50% drop in revenue from the first quarter of 2019 to the

first quarter of 2020


Unemployment – 1-minute overview

• Options for nonprofits• Pay state unemployment tax (SUTA) – based on experience

rating

• Self-insure instead of paying SUTA – must reimburse UI

Trust Fund for UI claims of nonprofit’s employees

• Exempt from SUTA – churches, religious nonprofits, and

501(c)(3)s with fewer than four employees – no UI benefits


CARES Act – Unemployment

• Expanded individual benefits• Pandemic Unemployment Assistance – available to workers

not usually covered by UI, including some nonprofit

workers

• $600 per month supplemental benefits for four months

• Extension of UI benefits by 13 weeks

• Waiver of one-week waiting period

• Must be administered by states – no guidance yet from DES


CARES Act – Unemployment

• Self-insured nonprofits• Provides federal funds to pay for half of costs of COVID-19

related UI claims

• States still need to take action to accept this provision

• Still a significant gap, which could be a major expense for

many nonprofits

• Possible federal or state support to cover this gap


CARES Act – Charitable Giving

• Above-the-line charitable deduction capped at $300

• No AGI limit on charitable contributions deductible as

itemized deductions

• Increase in corporate charitable limit from 10% to 25%

• Corporate deductibility of food donations up to 25%


CARES Act – Special Appropriations

• $130 billion for hospitals

• $15.5 billion in additional funding for SNAP

• $8.8 billion for child nutrition programs;

• $450 million for nonprofit food banks through The

Emergency Food Assistance Program (TEFAP)

• $50 million for legal services


CARES Act – Special Appropriations

• $400 million in election grants to states

• $75 million each for the NEA and NEH

• $3.5 billion for the Child Care Development Block Grant

• $750 million for Head Start

• $1 billion for the Community Service Block Grant

• $5 billion for the Community Development Block Grant

• $7 billion for affordable housing and homelessness prevention


CARES Act – Other Provisions

• Retirement plans• Distributions of up to $100,000 allowed without tax penalty

• No required minimum distributions in 2020

• Health Savings Accounts – a bit more flexibility

• Federal student loans• No interest or payments required until September 30, 2020

• Must follow loan procedures to take advantage (not automatic)

• Forbearance counts toward PSLF program

• Doesn’t apply to private student loans


Additional Congressional Action

• U.S. House focus on infrastructure and vulnerable populations

• Timing and process remain uncertain

• Nonprofit issues in next stimulus bill1. Expansion of universal charitable deduction

2. Fully holding harmless self-insured nonprofits for UI claims

3. Equitable treatment of nonprofits in business provisions


State response

Quick procedural background


State response

Governor Cooper’s Executive Orders:

• Eight executive orders between March 10-31• State of emergency

• Closing schools

• UI benefits

• Stay at home order


State response

Unemployment benefits Executive Order

• Waiver of one-week waiting period and actively

seeking work requirements

• Holds most employers harmless for UI claims related

to COVID-19


State response

Current financial surplus

• $3.9 billion in UI Trust Fund

• $1.1 billion in reserves

• $2.2 billion in unappropriated funds

. . . but deferred income tax payments could reduce this

by up to $2 billion


State response

Next steps:

• Get input on needs in communities

• Fill in gaps – particularly NC-specific gaps – from

federal stimulus legislation

• Transparent and bipartisan process


State response

House COVID-19 working groups

• Continuity of State Operations

• Economic Support

• Education

• Health Care

• https://www.ncleg.gov/RequestForComments/33


State response

Nonprofit requests

• Equitable treatment of nonprofits in employer relief

• Continued payments on state grants and contracts,

even if services can’t be provided

• Relaxation of grant/contract reporting and application

requirements


State response

Nonprofit requests

• Enabling federal UI payments

• Holding harmless nonprofits that elect to reimburse

on UI claims

• Non-itemizer tax credit or deduction on state taxes

• Extension of CSL deadlines


State response

Nonprofit requests

• What else would help?

(Now would be a good time to use the chat . . .

. . . or email [email protected])


Disaster loan options for nonprofits


Disaster loan options for nonprofits

• Paycheck Protection Program – fully forgivable

• Economic Injury Disaster Loan

• Emergency Economic Injury Grants

• Mid-sized Loan Program


Paycheck Protection Program

• Through local financial institutions

• Available to nonprofits with 500 or fewer employees

• Cover costs of payroll, health/retirement benefits, rent,

mortgage, utilities, and debt

• Tresaury guidance: No more than 25% for non-payroll

expenses

• Loans for up to 2 ½ months of payroll ($10 million maximum)

• No collateral or personal guarantee required


Paycheck Protection Program

• Interest rate of 4% with terms of up to 10 years

• First 6 months of payments deferred

• Fully forgivable if organization maintains payroll (or rehires

furloughed workers) through June 30

• Worker layoffs after April 26 make organizations ineligible

• Forms and additional details now available online

• Applications begin tomorrow


Economic Injury Disaster Loan (EIDL)

• Through SBA

• Applies to nonprofits with 500 employees or fewer

• Available until December 31 for any period during

2020

• Based on credit score

• No personal guarantee required for loans up to

$200,000


Economic Injury Disaster Loan (EIDL)

• Up to $2 million

• Purposes: fixed debts, payroll, accounts payable, and

other bills that can’t be paid because of the disaster’s

impact

• Interest rate is 2.75% for nonprofits

• SBA offers long-term repayment to keep payments

affordable, up to a maximum of 30 years


Emergency Economic Injury Grants

• Through SBA

• Work in conjunction with EIDL loans

• $10,000 grants for immediate support to

organizations

• Paid out within three days

• Part of EIDL application process – may be granted

even if organizations don’t ultimately qualify for EIDL


Mid-Sized Loan Program

• Through local financial institutions

• Available to nonprofits with 500-10,000 employees

• Interest rates capped at 2% with no interest or principal due

for six months

• Not forgivable

• Must retain 90% of workforce at full salary and benefits

through September 30, 2020


Rapid Recovery Loan Program

• Business bridge loan program through GoldenLEAF

• Nonprofits are not eligible!


Some positive news


1. Bipartisan collaboration

2. There is a genuine desire to help

3. Nonprofits are being included in

policy solutions

4. Nonprofits’ advocacy matters


“What I can think of now is just to demonstrate how the nonprofit sector has weathered similar storms in the past and come out on the other side with resiliency. I remember working for a nonprofit in Asheville during 9/11 and thinking ‘we are going down.’ But as the weeks passed we did fine and were able to bounce back. I'm thankful for that perspective and others might need that also.”


Background: The State of NC’s Nonprofit Sector*


* Data is early from March, and there might have been minor changes since then!

Individual giving trends

• Overall giving is down• Slight reduction in 2018 (confirmed by recent IRS data)

• Larger reduction in 2019

• Significant concerns in 2020

• Large donations are up

• Smaller donations are down



$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

What nonprofits get What nonprofits pay

North Carolina Nonprofits and State Taxes

Political landscape in 2020


What happens in 2020

• Legislative study committees have been meeting

• House COVID-19 task forces are meeting virtually

• Short session is scheduled to begin on April 28

• General Assembly could convene for additional

emergency assistance


Changes in 2021

• All 170 state legislative seats are up for (re)-election

• Many members aren’t seeking re-election• 16 House members

• 10 Senators

• New legislative districts in much of the state


(More normal) state policy issues in 2020


State budget


Access to healthcare


Medicaid Expansion


Association health plans


Medicaid Transformation


Nonprofit exemption from state and local

taxes


Nonprofit sales tax exemption

•Pending legislation: S.345

•Would replace nonprofit sales tax refunds with

point-of-sale exemption

•Unlikely to pass in 2020

•But would this help right now?


Nonprofit property tax exemption


Nonprofit sales tax questions

•Are nonprofit fundraising events subject to sales

tax?

•Should nonprofits have to charges sales tax on

online educational offerings?


Other hot (and still important) policy issues


Independent redistricting


2020 Census


New webinar series


Share your stories, needs, or ideas!

Use the chat in this webinar

OR

[email protected]


For more information

North Carolina Center for Nonprofitswww.ncnonprofits.org919-790-1555@ncnonprofits

David HeinenVice President for Public Policy and [email protected]@drheinen


welcome to the virtual nonprofit “town hall” online town hall... · cares act –cash to...

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