By Hillary Evans, vice president of professional learning & public policy, Philanthropy Southwest
House Passes the HEROES Act Benefiting Nonprofits
The U.S. House of Representatives recently passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) on May 15. This $3 trillion relief package includes additional funding for government programs, relief funding for state and local governments and changes to the CARES Act loan programs which includes nonprofits. The Senate is expected to take up this legislation, beginning negotiations with the House and the Administration, after returning from the Memorial Day recess.
This new House legislation makes a few proposed amendments supporting nonprofits in the Paychecks Protection Program (PPP) under the CARES Act including but not limited to:
- Lifting the 500-employee cap on the size of nonprofits eligible for PPP loans, including social-welfare organizations, unions, and trade associations.
- Removing a Small Business Administration limit on nonpayroll expenses eligible for loan forgiveness.
- Deferring principal and interest payments on PPP loans for one year, up from six months.
- Extending the covered period for loans from June 30 to December 31, 2020.
- Creating a 25 percent "set-aside" for PPP funding for nonprofits. Half of that set-aside would be for nonprofits with 500 or fewer employees, and the other half for nonprofits with more than 500 employees.
- Clarifying that critical-access hospitals and nonprofit news outlets are eligible for PPP loans.
- Requiring that the Small Business Administration provide reports on loan approvals and disbursements to nonprofits.
- Allowing borrowers to take advantage of the PPP loan and the Employee Retention Tax Credit.
- Provides a 50 percent refundable payroll tax credit for qualified fixed costs including rent, mortgage, and utility payments.
The HEROES Act also mandates that nonprofit organizations be included in the Main Street Lending program and eliminates the minimum loan size for nonprofit organizations and small businesses. This legislation does not include expansion of the temporary “above-the-line” deduction that was created in the CARES Act. However, expansion of this deduction is not precluded in future bills. Senate leaders including Senators James Lankford and Angus King urged Senate leadership in a May 7 letter to support access to capital for nonprofits, increase the federal unemployment insurance reimbursement, and increase the $300/person cap and extending the effective date of the universal charitable deduction.
Earlier this month, the Small Business Administration and the Department of Treasury issued an updated version of its Frequently Asked Questions (FAQ) document regarding the PPP loans. Philanthropy Southwest will continue to monitor developments around future stimulus funding.
Report Released on May 2020 Census Survey Results and the Impact of COVID-19
Funders’ Committee for Civic Participation (FCCP) recently released a report on the May 2020 Survey Results and the impact of COVID-19 on 2020 Census funders and grantees. The full report is available here and below is an overview from FCCP.
- Funders have responded quickly to support their census grantees. For example, 93 percent of respondents are offering flexibility of grant deliverables, 83 percent are offering extended grant timelines, 33 percent are providing additional census funding, and 22 percent are offering additional general operating support.
- Uncertainty is impacting all of the work, including the lack of clarity on the Census Bureau’s operational timeline and whether or not state and local governments will offer flexibility for census grant deliverables, timelines, or reporting.
- Funders' assessment of their grantee’s most urgent needs are broad, but -- not surprisingly -- flexibility and general operating support topped the list of priorities. Sixty-nine percent and 63 percent of respondents rated flexibility and general operating support, respectively, as a “very urgent” need. As organizations have adjusted their operations and census programs from in-person engagement, support to address this shift as well as the digital divide are also urgent needs. This includes rural outreach strategies, internet access, paid or earned media, digital organizing capacity, technology tools, and list-building capacity.
- Organizations are demonstrating resilience, flexibility, and creativity through new methods of census engagement to reach historically undercounted communities. This includes approaches that leverage census resources and infrastructure to respond to COVID-19 such as dual mailings and an effort to convert census champions into COVID-19 response captains; pairing census promotion with meal and service delivery as well as online instruction; celebratory and educational digital outreach like census dance parties, town halls, faith services, and questionnaire assistance; text and phone banking; and other creative, socially distant approaches like contests, signs at grocery stores and gas stations, and, sidewalk chalking.
- Funders expressed compassion and concern for their grantee partners, both for the short-term impact that COVID-19 is having on nonprofits’ operations and programming -- including the overlap with Get-Out-the-Vote efforts -- and the impact that the resulting financial crisis will have on their long-term viability.