Welcome to the Virtual Nonprofit “Town Hall” online town hall... · CARES Act –Cash to...
Transcript of Welcome to the Virtual Nonprofit “Town Hall” online town hall... · CARES Act –Cash to...
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Welcome to the Virtual Nonprofit “Town Hall”
David Heinen
North Carolina Center for Nonprofits
North Carolina Center for Nonprofits
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North Carolina Center for Nonprofits
ConnectLearn
Advocate
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North Carolina Center for Nonprofits
To facilitate conversations . . .
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Important Disclaimers
North Carolina Center for Nonprofits
If you can read this fine print, you are sitting too close to your screen!
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COVID-19 and nonprofits
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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Center survey of nonprofits
North Carolina Center for Nonprofits
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Center survey of nonprofits
North Carolina Center for Nonprofits
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Center survey of nonprofits
North Carolina Center for Nonprofits
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Center survey of nonprofits
North Carolina Center for Nonprofits
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Resources to address needs
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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)
North Carolina Center for Nonprofits
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Resources to help nonprofits and individuals
• 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
North Carolina Center for Nonprofits
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Resources to help nonprofits and individuals
• 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
North Carolina Center for Nonprofits
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Stay at home policies
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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”
North Carolina Center for Nonprofits
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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)
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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State resources to respond to COVID-19
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•DHHS: www.ncdhhs.gov
•Volunteer resources:
•www.volunteernc.org
•NC 2-1-1: www.nc211.org
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Government relief for nonprofits and
individuals
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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
North Carolina Center for Nonprofits
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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
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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
North Carolina Center for Nonprofits
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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)
North Carolina Center for Nonprofits
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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
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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
North Carolina Center for Nonprofits
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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
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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
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Federal response – IRS filing extensions
• April 15 deadlines pushed back to July 15 for
individuals and businesses
• No extension of nonprofit filing deadlines
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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
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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
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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
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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
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
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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%
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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State response
Quick procedural background
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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
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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
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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
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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
North Carolina Center for Nonprofits
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State response
House COVID-19 working groups
• Continuity of State Operations
• Economic Support
• Education
• Health Care
• https://www.ncleg.gov/RequestForComments/33
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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State response
Nonprofit requests
• What else would help?
(Now would be a good time to use the chat . . .
. . . or email [email protected])
North Carolina Center for Nonprofits
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Disaster loan options for nonprofits
North Carolina Center for Nonprofits
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Disaster loan options for nonprofits
• Paycheck Protection Program – fully forgivable
• Economic Injury Disaster Loan
• Emergency Economic Injury Grants
• Mid-sized Loan Program
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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Rapid Recovery Loan Program
• Business bridge loan program through GoldenLEAF
• Nonprofits are not eligible!
North Carolina Center for Nonprofits
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Some positive news
North Carolina Center for Nonprofits
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1. Bipartisan collaboration
2. There is a genuine desire to help
3. Nonprofits are being included in
policy solutions
4. Nonprofits’ advocacy matters
North Carolina Center for Nonprofits
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“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.”
North Carolina Center for Nonprofits
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Background: The State of NC’s Nonprofit Sector*
North Carolina Center for Nonprofits
* Data is early from March, and there might have been minor changes since then!
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North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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North Carolina Center for Nonprofits
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North Carolina Center for Nonprofits
$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
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Political landscape in 2020
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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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
North Carolina Center for Nonprofits
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(More normal) state policy issues in 2020
North Carolina Center for Nonprofits
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State budget
North Carolina Center for Nonprofits
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North Carolina Center for Nonprofits
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Access to healthcare
North Carolina Center for Nonprofits
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Medicaid Expansion
North Carolina Center for Nonprofits
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Association health plans
North Carolina Center for Nonprofits
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Medicaid Transformation
North Carolina Center for Nonprofits
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Nonprofit exemption from state and local
taxes
North Carolina Center for Nonprofits
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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?
North Carolina Center for Nonprofits
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Nonprofit property tax exemption
North Carolina Center for Nonprofits
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Nonprofit sales tax questions
•Are nonprofit fundraising events subject to sales
tax?
•Should nonprofits have to charges sales tax on
online educational offerings?
North Carolina Center for Nonprofits
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Other hot (and still important) policy issues
North Carolina Center for Nonprofits
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Independent redistricting
North Carolina Center for Nonprofits
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2020 Census
North Carolina Center for Nonprofits
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New webinar series
North Carolina Center for Nonprofits
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Share your stories, needs, or ideas!
Use the chat in this webinar
OR
North Carolina Center for Nonprofits
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For more information
North Carolina Center for Nonprofitswww.ncnonprofits.org919-790-1555@ncnonprofits
David HeinenVice President for Public Policy and [email protected]@drheinen
North Carolina Center for Nonprofits