The nation’s nonprofits are on the front lines of communities during the COVID-19 pandemic, often working tirelessly to serve the people who need services despite facing challenging circumstances within their own organizations. Several leading nonprofit organizations are pressuring Congressional lawmakers to take additional steps so that the sector can continue to provide desperately needed services for individuals and families across the country.
“Nonprofits are grateful that Congress made funding streams available to us in the CARES Act, but attempting to access that funding will put us in direct competition with for-profit businesses — a competition we’re unlikely to win in most cases,” said Kevin Washington, president and CEO of YMCA of the USA. “We need funding that is dedicated exclusively for nonprofits, particularly those with more than 500 employees, and we need an extended and expanded universal charitable deduction to encourage giving. Without this relief, many YMCAs and other community-based nonprofits won’t survive this crisis, and the communities they serve will suffer even more as a result.”
While the Coronavirus Aid, Relief, and Economic Security (CARES) Act included provisions that provide some nonprofits with a measure of relief, many in the sector believe more needs to be done to ensure nonprofits can continue to serve their communities during and beyond the pandemic. Therefore, more than 200 national nonprofit organizations have sent a letter to congressional leadership, calling on them to include a “Nonprofit Track” in any future legislation that builds on the CARES Act.
Specifically, the letter urges Congress to:
1. Expand nonprofit access to credit by designating funding exclusively for nonprofits within the two principal loan programs established in the CARES Act, and make the following additional improvements:
- Paycheck Protection Program: Provide incentives to private lenders to prioritize processing of applications of small nonprofits and expand the eligibility for nonprofits to participate in the Paycheck Protection Program Loans under CARES Act Sections 1102 and 1106 by modifying the current 500-employee cap or by other means.
- Mid-Size Business Loan Program: Adjust CARES Act Section 4003(c)(3)(D) to implement a program to support nonprofit employers with between 500 and 10,000 employees, including loan forgiveness and other provisions. The legislation should direct the U.S. Department of the Treasury to have this program operational no later than 15 days after enactment.
2. Strengthen charitable giving incentives to encourage all Americans to help their communities through charitable donations during these challenging times. The following modifications would generate immediate results:
- Applicable to 2019 Tax Filings: Encourage immediate donations by enabling taxpayers to make donations on and after March 13 (date of national emergency declaration) and before July 16 to claim the deductions on their 2019 tax filings (applicable to itemized and above-the-line deductions).
- Above-the-Line Deduction in CARES Act Section 2204:
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- Increase the $300/person cap.
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- Extend the effective date of the incentive.
3. Treat self-funded nonprofits fairly by increasing the federal unemployment insurance reimbursement for self-funded nonprofits to 100 percent of costs in CARES Act Section 2103.
4. Increase emergency funding by appropriating funds for targeted state formula grants and programs that can provide a rapid infusion of cash to nonprofit organizations that are partnering with state and local governments to protect vulnerable families and frontline responders.
Several of these provisions are incorporated in the bipartisan SOS Act, H.R. 6408.
“We appreciate that Congress included nonprofits in key relief provisions of the CARES Act, recognizing the critical support the charitable sector provides to the communities hardest hit by this pandemic,” said Stephanie J. Hull, Ph.D., president and CEO of Girls Inc. “Unfortunately, implementation challenges mean that many organizations are not getting the support Congress intended. More funding and reforms are needed to ensure that nonprofits can survive and remain focused on helping the most vulnerable in our communities during this unprecedented challenge.”
