Yesterday, the U.S. House of Representatives approved legislation to provide $310 billion in additional funding for the Paycheck Protection Program (PPP), which ran out of funding last week. The Center has heard from many nonprofits that have applied for (or attempted to apply for) this emergency relief program, which allows for forgivable loans for nonprofits and small businesses to pay for up to eight weeks of payroll expenses and other operational costs. Financial institutions could begin processing PPP loans again as soon as today. If your nonprofit is still seeking a PPP loan, we strongly encourage to contact your financial institution as soon as possible to apply. If your organization has a pending application, you can contact the lender to see whether you need to update your application to be eligible for the additional PPP funds. 

The latest PPP funding bill sets aside $30 billion of the funding to be used by community development financial institutions (CDFIs), credit unions, and banks with less than $10 billion in assets. This provision is intended to provide greater access to PPP loans to nonprofits and other entities that had difficulty securing loans in the initial round of PPP funding. Many nonprofits – and businesses in communities of color – have better access to CDFIs and credit unions than to larger banks. However, there are concerns that much of the $30 billion set-aside will be used by banks with less than $10 billion in assets, potentially providing minimal additional support to financial institutions serving nonprofits.

In addition to replenishing funding for PPP, the bill adds $50 billion in funding for the Economic Injury Disaster Loan (EIDL) program (which are not forgivable) and $10 billion for EIDL advance grants. It also provides $75 billion in additional funding for hospitals and $25 billion for COVID-19 testing.

Last week, a group of 461 nonprofits from across North Carolina joined the Center in sending a  letter to each member of Congress from North Carolina asking for additional COVID-19 relief for charitable nonprofits and the communities they serve. Specifically, the letter asks Congress to make four key improvements to the Coronavirus Aid, Relief, and Economic Support Act ( CARES Act):

Thank you if your organization signed on to this letter. Your advocacy is making a difference! The Center has heard from several members of Congress who are actively seeking legislative solutions to these four issues based on the unified message from so many nonprofits.

Yesterday, Governor Cooper issued an executive order extending the statewide “stay at home” rules through May 8. The Center published an analysis of the types of nonprofit operations that are “essential services” that can continue to operate in-person during this “stay at home” period. Governor Cooper also provided details of the state’s plan for transitioning to normal business operations once COVID-19 cases begin to subside in North Carolina. The three-phase plan for re-opening the state will begin sometime after May 8 once: (1) North Carolina has had 14 days of downward trends in COVID-19 cases and hospitalizations; and (2) the state has adequate capacity for testing for COVID-19, conducting contact tracing, and providing personal protective equipment.

Yesterday, the NC House of Representatives COVID-19 Continuity of State Operations Working Group approved a bill addressing several time-sensitive state government matters related to COVID-19. The working group unanimously approved an amendment, recommended by the Center based on input from many nonprofits, to allow the NC Secretary of State to extend charitable solicitation licensing (CSL) filing dates through August 1 (the date being used for all filing extensions in the bill). The House is expected to vote on (and likely approve) this bill later this month. If the impact of the COVID-19 pandemic is still being felt through this summer or fall, legislators will likely provide further extensions of CSL filing deadlines. Thanks to Representative Pricey Harrison (D-Guilford) for offering this amendment, which should help many nonprofits.

The NC General Assembly will return to Raleigh on April 28 to consider a variety of urgent COVID-19 relief legislation. Because of revenue uncertainties stemming from fewer retail sales (meaning less sales tax revenue) and extensions of individual income tax deadlines, legislators will not consider budget legislation during this month’s short session. Instead, legislators are planning to return to Raleigh this summer to consider adopting a state budget for FY2020-21 and addressing other COVID-19 issues (and a few other matters).

The Center continues to work with state legislators and the Governor’s Office to provide suggestions for state policy solutions that could help North Carolina nonprofits respond to the COVID-19 pandemic. The Center’s recommended state policy solutions, based on feedback from hundreds of nonprofits, include:

Yesterday, the Small Business Administration released additional guidance on PPP loans in the form of 31 frequently asked questions. The answers to two of the FAQs are particularly relevant for nonprofits applying for PPP loans:

Last night, the Division of Unemployment Security (DES) at the NC Department of Commerce began accepting unemployment claims for individuals who qualify for the new federal Pandemic Unemployment Assistance (PUA) program. PUA provides state unemployment insurance (UI) benefits for independent contractors, gig workers, and others who are out of work due to COVID-19 who otherwise would not be eligible for UI benefits. Notably, workers who have been furloughed or laid off by houses of worship, religious nonprofits, and 501(c)(3) nonprofits with fewer than four employees may apply for unemployment benefits through PUA. Weekly benefits for individuals receiving UI through PUA range from $132 to $350 per week (depending on employees’ regular wages) plus the federal supplemental benefits of $600 per week. DES has posted helpful guidance on how to apply for PUA benefits. Workers who are approved for PUA should begin receiving benefit checks about two weeks after applying for them.

On Monday, Governor Cooper issued an executive order allowing furloughed workers to receive COVID-19 related UI benefits even if they receive a severance payment from their employers. The Center has heard from many nonprofits that have had to furlough workers due to the COVID-19 crisis. This executive order clarifies that these nonprofits will not jeopardize their furloughed employees’ eligibility for UI benefits by offering them support payments.

Yesterday, the NC House COVID-19 Health Care Working Group approved two bills to help health care providers in North Carolina respond to the COVID-19 pandemic. One bill would provide a variety of state funding for health care and human service needs, much of which would support the work of nonprofits. Proposed appropriations for nonprofits include: $75 million to rural hospitals; $50 million for other hospitals; $1 million to each of the six food banks in North Carolina; $1.4 million to free and charitable clinics; $2.25 million for supplemental foster care payments; and a 5% increase in fee-for-service rates for Medicaid providers during the COVID-19 crisis.

The other bill would make several health care policy changes to help the state address the COVID-19 pandemic. Among other things, the bill would:

The House is expected to vote on both bills when it returns to session next week.

A complete and accurate count in the 2020 U.S. Census is important for nonprofits since it will help ensure that North Carolina has full representation in Congress and access to federal funding that supports the work of many nonprofits. Because nonprofits are trusted messengers that often serve hard-to-count communities, it is important for all nonprofit organizations to spread the word about the importance of completing the 2020 Census. Nonprofit’s engagement in Census outreach is particularly critical since North Carolina continues to lag behind other states in our Census response rate. As of Wednesday, North Carolina’s response rate was 47.7%, well below the national average of 51.8% (see the U.S. Census Bureau’s map of response rates for more details).

The COVID-19 crisis is changing the way that nonprofits engage in nonpartisan voter registration and get-out-the-vote activities. You Can Vote is offering a free series of online discussions on the first Thursday of every month to help nonprofits and businesses learn the latest on the 2020 election and the impact of COVID-19 on voter education, voter registration, and turnout. You Can Vote will share its plan and new tools to support your organization with the most up-to-date, fact-based voting rules and information. Register for the first of these meetings, which will be on May 7 at 12 p.m.

Yesterday, the IRS issued proposed rules to provide guidance on how nonprofits are to calculate their taxes on unrelated business income from separate trades or businesses. The 2017 Tax Cuts and Jobs Act effectively increased unrelated business income taxes (UBIT) on some nonprofits by adding Section 512(a)(6) to the Internal Revenue Code which only allows organizations to calculate tax separately on each “trade or business.” This new law means that, unlike for-profit businesses, nonprofits could no longer offset their income from one line of taxable business with expenses from a separate line of taxable business. The proposed rules are generally helpful for nonprofits, since they simplify the categorization of “trades or businesses” (meaning nonprofits with multiple lines of similar taxable business activities may have less UBIT liability) by allowing nonprofits to group their unrelated business income into about 20 broad categories (or silos) based on the first two numbers of NAICS codes. For instance, all types of accommodations and food services fall into one category (72). Public comments will be due 60 days after the proposed rules are published in the Federal Register.