Help is on The Way! COVID Relief for Nonprofits
Happy New Year! I hope you had a restful – and safe – holiday season!
If you spent the holidays celebrating, relaxing, and doing something fun rather than thinking about your organization (Good for you!) – or counting all your year-end gifts, you may have missed the news that the COVID relief bill that President Trump signed on the evening of December 27 has provisions to help nonprofits. Rather than making you read all 5,593 pages, I culled my resources to bring you the highlights.
Extends the Paycheck Protection Program (PPP) through March 31, 2021, including the opportunity for nonprofits with 300 or fewer employees who can demonstrate a loss of at least 25% of gross receipts in any 2020 quarter compared to the same quarter in 2019 to apply for a second loan. It also expands eligibility to 501c6 nonprofits including tourism promotion agencies and chambers of commerce, expands the list of expenses eligible for payment with PPP funds, and simplifies the forgiveness process for loans of $150,000 or less.
Adds funds to the Economic Injury Disaster Program that provides $10,000 grants to nonprofits in low-income communities. Nonprofits that received an advance of less than $10,000 in the first round can add to the previous award up to $10,000 total.
Expands the Employee Retention Tax Credit and allows an organization to use both it and the PPP program for different payroll expenses; previously an organization could only accept one award. Successful applicants must demonstrate a quarterly revenue decline of at least 20% compared to the same quarter in 2019.
Money also exists for specific nonprofit segments:
Shuttered venue operators (live music venues, independent movie theaters, cultural institutions) can receive assistance, with set asides for entities with 50 or fewer employees. Recipients cannot also receive a second distribution from the PPP program
Rental and water bill assistance will again go through the states to help low-income residents. At least in Iowa and Illinois, these funds trickled down to cities and nonprofits to distribute
Hospitals and health care providers (through the Department of Health and Human Services) for health care-related expenses or lost revenue from COVID
Mental health and substance abuse services (through the Department of Health and Human Services, specifically Substance Abuse and Mental Health Services Administration), funded directly through grant programs, to community behavioral health programs, through the states, and to support school-based mental health for children
Childcare (through the Department of Health and Human Services, specifically Administration for Children and Families) to provide immediate assistance to providers, including relief for families’ payments
Elder care (through the Department of Health and Human Services, specifically Administration for Community Living) to address abuse, neglect, and exploitation of the elderly including adult protective services and long-term care ombudsperson activities
Higher education (through the Department of Education) for emergency relief
Arts and cultural institutions: Extends the universal tax deduction for gifts to arts and cultural institutions for donors who do not itemize (Be sure to tell your donors this! Many will not know they can deduct their gifts to you!)
Some of these funds go through the states who will announce application processes as they decide when and how to dole them out, much as they did in 2020. Many have very quick turnarounds and, at least in Iowa and Illinois, require mostly financial data and make awards on a first-come, first-awarded basis to qualified applicants. Get your data ready so you can apply as soon as you learn of them.
Others go through specific agencies. For example, you need to contact your bank to apply for the PPP loan; your accountant or payroll administrator can help you apply for the Employee Retention Tax Credit. Contact them early so they know of your interest and can give you directions for applying. You can also get in line for their services as these new programs will keep them busy – and at the same time that accountants start ramping up for tax season.
Lost in the media coverage of the COVID-specific provisions, the bill also includes the FY21 Appropriations Omnibus that will fund the federal government for the next year. This part of the bill includes increased funding for most agencies and programs including Health and Human Services, Environmental Protection Agency, Housing and Urban Development, and Transportation. In general, increased budgets usually mean new or increased funding in grant programs. Watch for announcements from these agencies – or listen to Biden’s Inauguration Address and State of the Union – to learn the administration’s priorities for spending these funds.
Clear as mud?! (Yes, me too!)
How can you maximize the funding your organization receives?
If you have specific questions on any of these COVID-specific programs, contact your accountant or financial advisor who can determine if you qualify and the program(s) that best meet your needs. As an aside – this is a great reason to have an accountant on your board or as a close friend of your organization, especially if you don’t pay someone to prepare your financials!
If you have questions about federal grants, contact Jayme in our office to schedule a time when we can talk specifics. We track federal funding releases and can provide you with details, including discussing how well a program fits your specific circumstances and needs.
Good luck! Together, we will get through these challenging times to emerge with an even stronger nonprofit sector.
