Fast Facts on Federal COVID-19 Stimulus for Nonprofits
I recently asked my Facebook friends to share “the phrase you never want to hear again.” The top four winners: unprecedented, flatten the curve, COVID-19 and social distancing. While we are living through challenging times, I am a firm believer that we can get through this together. This is a pressure test of our democracy, and although we won’t be unscathed, we can pass this test.
For this blog, we wanted to share some “fast facts” on what the federal government has accomplished to help us “weather this storm.” It is critically important that every nonprofit leader, including board members, is well-versed in the elements of these policies and utilize them as tools to support the most vulnerable and assist our communities during this crisis. To ensure every nonprofit has quick access to these resources and guidance, we have summarized the efforts and included many links for additional details and updates, so please check them out and consult with your attorney, accountant and HR advisor before taking action.
Moving with unusual speed, Congress has passed and the president has signed into law three major pieces of legislation to respond to COVID-19. They are currently working on the fourth response, which is slated for April. Pundits also predict that there will be a fifth response in the summer/fall timeframe.
Here is a brief rundown of each bill and its impact on the social sector, including a more detailed response for the CARES Act passed on Saturday:
Response #1: Coronavirus Preparedness and Response Supplemental Appropriations Act (Coronavirus Emergency Supplemental)
Amount: $7.8 billion
- Provides additional funding support to federal agencies, such as CDC, HHS, NIH and US AID to ramp up emergency services
- Increases funding for testing of COVID-19
Applicability to Nonprofits:
- Allows healthcare agencies to provide telehealth services to Medicare patients
Response #2: Families First Coronavirus Response (Families First) Act
Amount: $8.3 billion
- Expands nutrition assistance for vulnerable populations, especially for students and seniors
- Increases support for COVID-19 testing
- Expands FMLA
- Requires paid sick leave for employees with COVID-19
- Implements tax credits for paid sick and paid family and medical leave
Applicability to Nonprofits:
- Consult with accountants and HR professionals to update your policies and apply for tax credits if you are impacted.
- If you employ fewer than 500 employees [NOTE: the CARES Act (see Response #3 below) gives certain exemptions for employers of fewer than 50 employees], nonprofits must provide all employees with 80 hours of paid sick leave either at the employee’s regular rate or at two-thirds of his/her regular rate to: 1) care for a child whose school or place of care is closed due to coronavirus, 2) care for a family member who is self-isolating due to exhibiting coronavirus symptoms and needs to obtain medical care, or 3) allow an employee to comply with a requirement or recommendation to quarantine.
Response #3: Coronavirus Aid, Relief and Economic Security (CARES) Act
Amount: $2.2 trillion in direct relief
- Delivers short-term relief to working-class individuals through direct aid to taxpayers and expanded unemployment insurance
- Allows taxpayers to get charitable deductions, including $300 “above the line” donation
- Relaxes obligations for student loans, depending on need and circumstances
- Prevents evictions and delays foreclosures on all federally backed mortgages
- Includes expanded unemployment benefits and employee retention credits
- Provides short-term relief to small businesses, which for the first time includes nonprofits and independent contractors, through a series of loans, grants and technical assistance
- Offers aid to the healthcare industry, including community health centers and veterans programs, for non-reimbursable needs and investments in treatment
- Further expands nutrition assistance for vulnerable populations
- Amplifies employment and training programs and childcare for dislocated and adversely impacted workers
- Funds HUD programs, including rental and voucher assistance, homeless assistance and additional support for public housing
- Bolsters violence prevention programs and other social service programs that impact vulnerable populations
- Assists education systems with technology support for remote learning and direct support for vulnerable students
- Allows for flexibility in the federal AmeriCorps program
- Provides disaster relief to states that have officially declared
- Ramps up aid to state (find out how much your state is getting) and local governments for special needs
Applicability to Nonprofits:
- Apply as a nonprofit for loan/grant assistance if you meet eligibility requirements as soon as possible. There is a quick online application to get a $10,000 advance, and banks will be ready to assist with other loans on Friday. Each assistance program is different based on type of nonprofit (in general, if you file a 990, you are eligible for some relief) as well as size of employee base and rules are still being generated, so refer to the Council of Nonprofits for the latest information. When considering the application, think both about short-term needs as well as forecasted needs during the summer and fall as needs change.
- Educate donors who have been motivated by the national emergency about new donor guidelines, including the first-of-its-kind $300 “above the line” donation (also known as universal or non-itemizer deduction).
- Refer clients as well as your essential independent contractors, artists and other small businesses that support you as a nonprofit to your local Chamber of Commerce and/or accountant for a checklist of all provisions to support local businesses to get loans and technical assistance.
- Check in with your local education systems (public and private, K-12 and college) to assist with wrap-around services needed for students.
- Work with local governments on educating citizens on their rights related to foreclosures or evictions. Many attorneys and law clinics are ramping up to offer pro bono assistance to low-income clients.
- Consult with accountants and HR professionals on the broad range of incentives and credits for employee retention, delay of employee payroll taxes and expanded unemployment insurance.
- Track client and community needs as they develop and share this data (as well as stories) with local and state governments to allow them to best distribute monies being allocated to them for relief efforts.
- If you are an arts and culture organization, an additional $75M has been earmarked through the National Endowment for the Arts and $50M through the Institute of Museum and Library Services. More information will be available on their website soon. Americans for the Arts also is conducting an impact survey of arts organizations and has a great list of resources.
- If you have any detailed questions about the bill, consult the best Q&A available.
Response #4: TBD
Timeline: April 2020
Amount: $ TBD
Possible Major Actions:
- Reporters are already showcasing the “class divide” during the quarantine — expect policy solutions to bridge these divides and help the most vulnerable recover.
- Advocates in the disability community are arguing for additional support and protections for the 61M Americans with disabilities.
- Experts are discussing “New Deal” ideas surrounding water, infrastructure and transportation.
- Economists are also starting to float additional plans to boost the economy once businesses are able to reopen and need working capital as the economy rebounds.
Applicability to Nonprofits:
- Track client and community needs as they develop and share this data (as well as stories) with policymakers to ensure that future responses meet the needs of your clients and community.
We also wanted to share some great resources from our friends that include information about both government and philanthropic support for the social sector as well as small businesses and entrepreneurs. My former professor at Duke, Cathy Clark, has put together an amazing database — check it out and add other resources. My good friend, Frances Deviney, also has a database of support specific to Texas nonprofits.
This challenge is indeed unprecedented, but what is not unprecedented is America’s ability to rise to a challenge. We are all in this together — if we can help you or your team in any way, please do not hesitate to reach out to us. And, if you have found any particularly helpful resources, please let us know and we will share.