April 10, 2020
Note: The North Carolina Center for Nonprofits typically provides Nonprofit Policy Matters each week as a benefit to its nonprofit members . However, to help all North Carolina nonprofits respond to the COVID-19 crisis, we're temporarily providing this newsletter to non-member nonprofits.
In this issue...
Nonprofits seek further COVID-19 relief from Congress
Take one minute to ask Congress to provide more relief to nonprofits
Center provides more input on state-specific COVID-19 relief solutions
Federal agencies offer further guidance on Paycheck Protection Program
NC congressman introduces bill to encourage charitable giving
Join an online nonprofit town hall next Friday
Census tip of the week: Paper questionnaires are now available
Legislative staff anticipates state revenue shortfall for FY2020-21
IRS extends 990 filing deadlines through July 15
Learn about nonprofit advocacy to strengthen vote-by-mail laws
Nonprofits Seek Further COVID-19 Relief from Congress
On Wednesday, the National Council of Nonprofits and dozens of other national organizations asked Congress to make four improvements to the Coronavirus Aid, Relief, and Economic Support Act (CARES Act) in its next round of COVID-19 stimulus legislation to help provide additional relief to charitable nonprofits. The CARES Act helps nonprofits in several ways including: 
  1. Offering immediate financial assistance by making most 501(c)(3) nonprofits eligible for the forgivable Paycheck Protection Program loans;
  2. Covering half of the cost of unemployment claims of self-insured nonprofits and extending unemployment benefits to laid-off and furloughed workers at nonprofits that are exempt from unemployment coverage (religious nonprofits and 501(c)(3) organizations with fewer than four employees);
  3. Establishing a limited non-itemizer charitable deduction (capped at $300 per taxpayer) for 2020; and
  4. Providing emergency funding for a variety of federal programs that support the work of nonprofits.
The Center is participating in efforts to secure four key improvements to the provisions of the CARES Act in the next stimulus bill:
  1. Expand Access to Credit. Expanding nonprofits’ access to credit to provide for immediate financial relief by expanding nonprofit eligibility for the Paycheck Protection Program (PPP) and by establishing a dedicated funding stream for PPP loans to nonprofit organizations.
  2. Bolster Charitable Giving Incentives. Strengthening temporary above-the-line charitable deductions from the CARES Act by allowing taxpayers to use it on the 2019 taxes, significantly increasing the $300 cap, and extending it beyond 2020.
  3. Protect Self-Funded Nonprofits. Holding harmless self-insured nonprofits by providing funding to cover 100% of the costs of these organizations’ unemployment claims. Without this change, many nonprofits that provide health care, food assistance, affordable housing, childcare, and other critical services will have to end or curtail services later this year.
  4. Increase Emergency Funding. Increase emergency funding so that nonprofits can work with state and local governments to provide essential services to vulnerable families and frontline responders to the COVID-19 crisis.
The Center strongly supports these recommendations. We are working with North Carolina’s members of Congress to help include this additional relief to nonprofits in the next congressional stimulus bill.
Take One Minute Next Week to Ask Congress to Provide More Relief to Nonprofits
To help demonstrate to North Carolina’s members of Congress the importance of providing additional relief to nonprofits in the next stimulus bill, the Center is preparing a sign-on letter to North Carolina’s congressional delegation. The letter will ask for the same four improvements to the CARES Act as the national nonprofit letter (see above for details). Look for an action alert from the Center on Monday asking for your organization to sign on to this letter to North Carolina’s members of Congress.
Center Provides More Input on State-Specific COVID-19 Relief Solutions
The Center continues to work with 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. Based on feedback from last week’s nonprofit town hall, several other webinars, and communications from nonprofits, the Center has added several new suggestions for state policy solutions to help nonprofits survive the COVID-19 crisis. The Center’s 18 recommended state policy solutions include: 
  1. Providing full relief for nonprofits that have elected to self-insure for unemployment insurance (UI), either by forgiving the remaining half of these organizations’ reimbursable claims that aren’t covered by federal payments or by providing a grace period of at least 12 to 18 months before these nonprofits must begin reimbursing the state for a portion of their claims;
  2. Providing flexibility to nonprofits to use their funds from state grants or contracts for purposes other than providing the specific deliverables under the contracts in the (many) instances where the provision of these deliverables has become impossible due to COVID-19;
  3. Extending charitable solicitation licensing filing deadlines;
  4. Establishing a temporary state tax credit for charitable contributions by non-itemizers to increase donations to North Carolina nonprofits;
  5. Improving nonprofits’ cash flow by allowing for temporary point-of-sale exemption from sales tax on nonprofits’ purchases; and
  6. Modifying the NC Nonprofit Corporation Act to ensure that all nonprofit boards and members can meet remotely to comply with the statewide “stay at home” executive order.
If your nonprofit has other suggestions for ways the state can help your organization, your community, or those you serve, please share this input with the House’s four working groups through the House’s online comments portal. We also encourage you to share your input with the Center so we can help with your advocacy.
Federal Agencies Offer Further Guidance on Paycheck Protection Program
Over the past week, many 501(c)(3) nonprofits have applied (or attempted to apply) for the Paycheck Protection Program (PPP), a new forgivable loan that is available to help nonprofits and small businesses maintain their operations during the COVID-19 crisis. The Center has heard that many nonprofits have had difficulties applying for PPP loans or finding financial institutions through which to apply. Please take two minutes to share your experience (good or bad) in applying for PPP loans with the National Council of Nonprofits. Your responses to this brief survey can help the Center and the National Council of Nonprofits more effectively advocate for changes to the PPP to ensure that nonprofits have access to financial assistance.

Nonprofits are encouraged to apply for PPP loans as soon as possible. Although the deadline is June 30, the CARES Act only authorized a total of $349 billion in Payroll Protection Act loans, and financial experts suggest that this funding could run out soon. It is possible that Congress will appropriate additional funding for PPP loans, but a proposal to provide another $250 billion in immediate funding stalled in the U.S. Senate yesterday.
On Wednesday, the U.S. Treasury Department published updated FAQs on the PPP. Last week, the Small Business Administration (SBA) issued interim regulations. This guidance provides clarification on many questions nonprofits have been asking about the PPP. For example, the Treasury FAQs explain that organizations with more than 500 employees may still be eligible for PPP loans if they meet the SBA’s size standards for their industry. The interim regulations clarify that borrowers may only use up to 25% of the forgivable portion of a loan for non-payroll expenses.

Charitable nonprofits with fewer than 500 employees that are struggling to maintain operations during the COVID-19 pandemic also can apply for the low-interest emergency SBA Economic Injury Disaster Loan (EIDL), which is not forgivable but carries a 2.75% interest rate and long-term financing options. Nonprofits can apply for EIDL loans directly through the SBA. As part of the applications, nonprofits also may request an Emergency Economic Injury Grant of up to $10,000. If approved, these grant funds are available within a few days of the application, even if the organization ultimately does not qualify for an EIDL loan. Applicants for the EIDL this week have reported that SBA is now limiting these grants to $1,000 per employee (for a maximum of $10,000). Nonprofits may apply for both Paycheck Protection Act and EIDL loans (and are encouraged to apply for both as soon as possible) but may not use both loans to cover the same expenses.
To help your nonprofit understand which of these loan programs is the best option to help maintain your operations and payroll during the COVID-19 crisis, check out the comparison chart from the National Council of Nonprofits.
NC Congressman Introduces Bill to Encourage Charitable Giving
On Wednesday, Congressman Mark Walker (R-NC) introduced the Coronavirus Help and Response Initiative Through Year (CHARITY) 2022 Act to encourage donations to nonprofits during the response and recovery for the COVID-19 pandemic. The bill would expand the $300 limit on the non-itemizer charitable deduction in the CARES Act to $4,000 for individual taxpayers and $8,000 for married couples filing jointly. It also would extend this temporary charitable deduction through 2022. The Center strongly supports the CHARITY Act.
Join an Online Nonprofit Town Hall Next Friday
To keep your nonprofit in the loop with the latest on new federal and state policies, loan programs, and resources the help nonprofits during the COVID-19 crisis, the Center is offering another free nonprofit town hall webinar on Friday, April 17 from 11 a.m.-1 p.m. This webinar will include updates on the latest federal and state legislative and executive relief efforts to help nonprofits respond to the COVID-19 crisis, and an online discussion about the needs nonprofits have right now – both operationally and as service providers. It will also include a (quick) briefing on the state of North Carolina’s nonprofit sector and current (and future) public policy issues affecting nonprofits. Registration is free, but participants will need to provide their own lunch!
Census Tip of the Week: Paper Questionnaires are Now Available
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. To help your nonprofit better prepare for the Census, the Center is offering a tip (sometimes more) in this newsletter each week.
Census Tip of the Week
Beginning this week, households that have not responded to the Census online will receive paper questionnaires in the mail. The Center encourages all nonprofits to remind their staff, boards, volunteers, and those they serve that they can complete the Census in three ways: (1) online; (2) by phone; or
(3) by mail. North Carolina had a significant increase
in online Census responses on Census Day (April 1). Unfortunately, as of Wednesday, North Carolina’s 43.9% response rate still lagged behind the national average of 46.7% (see the U.S. Census Bureau’s map of response rates for more details).
Legislative Staff Anticipates State Revenue Shortfall for FY2020-21
The NC General Assembly’s nonpartisan staff has estimated that the COVID-19 crisis will lead to a 5%-10% reduction in state revenue next year. This means that legislators will need to make difficult choices about cutting funding for state programs and/or increasing state tax revenue when they develop the state budget for next year. In previous recessions, legislators have made significant reductions in public investment in the work of nonprofits as a way to reduce state spending. The General Assembly is scheduled to return to Raleigh for its 2020 short session on April 28. Legislators will likely address COVID-19 relief during that session and come back to Raleigh later in the summer to develop the state budget for 2020-21.
IRS Extends 990 Filing Deadlines through July 15
Yesterday, the IRS announced that it is extending to July 15 relief to all taxpayers that have a filing or payment deadline falling between April 1, 2020 and July 15, 2020. The IRS notice identifies the Form 990-T return for unrelated business income taxes as one of the forms with an extended filing deadline. The annual Form 990 filing deadline is also delayed by operation of this notice and previous IRS guidance for extension of filing deadlines during federally-declared disasters. Many nonprofits with May 15 filing deadlines for their 990s already were planning to file for automatic extensions.
Learn About Nonprofit Advocacy to Strengthen Vote-by-Mail Laws
The COVID-19 crisis is changing the way that nonprofits engage in nonpartisan voter registration and get-out-the-vote activities. Many nonprofits are now advocating for changes to state absentee voting and vote-by-mail policies to ensure that all eligible voters can vote safely even during a pandemic. Nonprofit VOTE, a national partner of the Center, is offering a free webinar on Thursday, April 23 from 2-3 p.m. to help your nonprofit learn more about vote-by-mail policies. Nonprofit VOTE has also provided updated information for nonprofits about vote-by-mail policies in every state.
Nonprofit Policy Matters is a service for current Members of the North Carolina Center for Nonprofits. We track state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities . For more information, contact David Heinen , Vice President for Public Policy and Advocacy.

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