April 24, 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...
Congress approves bill to reopen Paycheck Protection Program 
North Carolina nonprofits send unified message to Congress on COVID-19 relief
Governor Cooper extends “stay at home” order and offers plan for re-opening NC
NC House bill will extend charitable solicitation license deadlines
General Assembly set to begin 2020 session next week
SBA issues additional guidance on PPP loans
More nonprofit employees can now seek unemployment in North Carolina
Governor Cooper extends unemployment benefits to more furloughed workers
House working group recommends COVID-19 health care support legislation
Census tips of the week: Revised Census timeline and help for nonprofit service providers
Nonprofit civic engagement during the COVID-19 crisis
IRS issues proposed rules on silo-ing of UBIT “trades of businesses”
Congress Approves Bill to Reopen Paycheck Protection Program
Yesterday, the U.S. House of Representatives approved legislation to provide $310 billion in additional funding for the Paycheck Protection Program (PPP), which ran out of funding last week. The Center has heard from many nonprofits that have applied for (or attempted to apply for) this emergency relief program, which allows for forgivable loans for nonprofits and small businesses to pay for up to eight weeks of payroll expenses and other operational costs. Financial institutions could begin processing PPP loans again as soon as today. If your nonprofit is still seeking a PPP loan, we strongly encourage to contact your financial institution as soon as possible to apply. If your organization has a pending application, you can contact the lender to see whether you need to update your application to be eligible for the additional PPP funds. 

The latest PPP funding bill sets aside $30 billion of the funding to be used by community development financial institutions (CDFIs), credit unions, and banks with less than $10 billion in assets. This provision is intended to provide greater access to PPP loans to nonprofits and other entities that had difficulty securing loans in the initial round of PPP funding. Many nonprofits – and businesses in communities of color – have better access to CDFIs and credit unions than to larger banks. However, there are concerns that much of the $30 billion set-aside will be used by banks with less than $10 billion in assets, potentially providing minimal additional support to financial institutions serving nonprofits.

In addition to replenishing funding for PPP, the bill adds $50 billion in funding for the Economic Injury Disaster Loan (EIDL) program (which are not forgivable) and $10 billion for EIDL advance grants. It also provides $75 billion in additional funding for hospitals and $25 billion for COVID-19 testing.
North Carolina Nonprofits Send Unified Message to Congress on COVID-19 Relief
Last week, a group of 461 nonprofits from across North Carolina joined the Center in sending a  letter to each member of Congress from North Carolina asking for additional COVID-19 relief for charitable nonprofits and the communities they serve. Specifically, the letter asks Congress to make four key improvements to the Coronavirus Aid, Relief, and Economic Support Act ( CARES Act):
  1. Expand Access to Credit. Helping nonprofits get more 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 2019 taxes, significantly increasing the $300 cap, and extending it beyond 2020.
  3. Protect Self-Insured 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. Support Nonprofit Service Providers. Increasing emergency funding so that nonprofits can work with state and local governments to provide essential services to vulnerable families and front line responders to the COVID-19 crisis.

Thank you if your organization signed on to this letter. Your advocacy is making a difference! The Center has heard from several members of Congress who are actively seeking legislative solutions to these four issues based on the unified message from so many nonprofits.
Governor Cooper Extends “Stay at Home” Order and Offers Plan for Re-Opening NC
Yesterday, Governor Cooper issued an executive order extending the statewide “stay at home” rules through May 8. The Center published an analysis of the types of nonprofit operations that are “essential services” that can continue to operate in-person during this “stay at home” period. Governor Cooper also provided details of the state’s plan for transitioning to normal business operations once COVID-19 cases begin to subside in North Carolina. The three-phase plan for re-opening the state will begin sometime after May 8 once: (1) North Carolina has had 14 days of downward trends in COVID-19 cases and hospitalizations; and (2) the state has adequate capacity for testing for COVID-19, conducting contact tracing, and providing personal protective equipment.
NC House Bill Will Extend Charitable Solicitation License Deadlines
Yesterday, the NC House of Representatives COVID-19 Continuity of State Operations Working Group approved a bill addressing several time-sensitive state government matters related to COVID-19. The working group unanimously approved an amendment, recommended by the Center based on input from many nonprofits, to allow the NC Secretary of State to extend charitable solicitation licensing (CSL) filing dates through August 1 (the date being used for all filing extensions in the bill). The House is expected to vote on (and likely approve) this bill later this month. If the impact of the COVID-19 pandemic is still being felt through this summer or fall, legislators will likely provide further extensions of CSL filing deadlines. Thanks to Representative Pricey Harrison (D-Guilford) for offering this amendment, which should help many nonprofits.
General Assembly Set to Begin 2020 Session Next Week
The NC General Assembly will return to Raleigh on April 28 to consider a variety of urgent COVID-19 relief legislation. Because of revenue uncertainties stemming from fewer retail sales (meaning less sales tax revenue) and extensions of individual income tax deadlines, legislators will not consider budget legislation during this month’s short session. Instead, legislators are planning to return to Raleigh this summer to consider adopting a state budget for FY2020-21 and addressing other COVID-19 issues (and a few other matters).

The Center continues to work with state 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. The Center’s recommended state policy solutions, based on feedback from hundreds of nonprofits, include:
  1. Unemployment Relief for Self-Insured Nonprofits. Nonprofits that have elected to self-insure for unemployment insurance (UI) are required to reimburse the UI Trust Fund for the cost of UI claims of their laid-off and furloughed employees. While the federal CARES Act provides relief of half of these costs, the financial burden of paying for the other half of these claims could be crippling for many organizations in the second half of 2020 and early 2021 without additional relief. To be able to reopen and continue to provide services, these organizations will need an extension of time to reimburse the state for the costs of UI claims and/or forgiveness of the remaining half of the costs of COVID-19 related UI claims. 
  2. Flexibility In Use of State Grants and Contracts. Many nonprofits that provide public services through state grants and contracts have been unable to fulfill the specific deliverables under these contracts due to the COVID-19 crisis. It is important that state agencies provide these organizations flexibility to use these grant and contract funds for other purposes during this crisis.
  3. Encouraging Charitable Giving. The General Assembly can help encourage more private giving to help nonprofits recover from the COVID-19 crisis by temporarily reinstating North Carolina’s tax credit for charitable contributions by non-itemizers. 
  4. Allowing for Temporary Nonprofit Sales Tax Exemption. Temporarily allowing for point-of-sale exemption from sales tax (instead of waiting for six months for the NC Department of Revenue to process refunds) would greatly help with cash flow for many nonprofits.
  5. Ensuring Operational Stability. Many nonprofits have told the Center that they would benefit from small, temporary changes to state laws and the state budget, including extensions of charitable solicitation licensing deadlines, laws ensuring that nonprofit boards and members can conduct meetings virtually, and budget provisions to expedite the flow of federal relief support into North Carolina’s communities.
SBA Issues Additional Guidance on PPP Loans
Yesterday, the Small Business Administration released additional guidance on PPP loans in the form of 31 frequently asked questions. The answers to two of the FAQs are particularly relevant for nonprofits applying for PPP loans:
  1. Payments to independent contractors do not count as payroll expenses for organizations seeking PPP loans since these contractors may apply for PPP loans on their own.
  2. Organizations seeking PPP loans should carefully consider the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” and should have clear documentation for why the PPP loan is necessary for their organization.
More Nonprofit Employees Can Now Seek Unemployment in North Carolina
Last night, the Division of Unemployment Security (DES) at the NC Department of Commerce began accepting unemployment claims for individuals who qualify for the new federal Pandemic Unemployment Assistance (PUA) program. PUA provides state unemployment insurance (UI) benefits for independent contractors, gig workers, and others who are out of work due to COVID-19 who otherwise would not be eligible for UI benefits. Notably, workers who have been furloughed or laid off by houses of worship, religious nonprofits, and 501(c)(3) nonprofits with fewer than four employees may apply for unemployment benefits through PUA. Weekly benefits for individuals receiving UI through PUA range from $132 to $350 per week (depending on employees’ regular wages) plus the federal supplemental benefits of $600 per week. DES has posted helpful guidance on how to apply for PUA benefits. Workers who are approved for PUA should begin receiving benefit checks about two weeks after applying for them.
Governor Cooper Extends Unemployment Benefits to More Furloughed Workers
On Monday, Governor Cooper issued an executive order allowing furloughed workers to receive COVID-19 related UI benefits even if they receive a severance payment from their employers. The Center has heard from many nonprofits that have had to furlough workers due to the COVID-19 crisis. This executive order clarifies that these nonprofits will not jeopardize their furloughed employees’ eligibility for UI benefits by offering them support payments.
House Working Group Recommends COVID-19 Health Care Support Legislation
Yesterday, the NC House COVID-19 Health Care Working Group approved two bills to help health care providers in North Carolina respond to the COVID-19 pandemic. One bill would provide a variety of state funding for health care and human service needs, much of which would support the work of nonprofits. Proposed appropriations for nonprofits include: $75 million to rural hospitals; $50 million for other hospitals; $1 million to each of the six food banks in North Carolina; $1.4 million to free and charitable clinics; $2.25 million for supplemental foster care payments; and a 5% increase in fee-for-service rates for Medicaid providers during the COVID-19 crisis.

The other bill would make several health care policy changes to help the state address the COVID-19 pandemic. Among other things, the bill would:
  1. Temporarily expand Medicaid coverage to individuals with incomes up to 200% of the federal poverty level for COVID-19 prevention, testing, and treatment;
  2. Expand access to telehealth services during the COVID-19 pandemic;
  3. Increase access to medical supplies need for COVID-19 prevention and treatment; and
  4. Extend the deadline for health care providers to connect to the state’s Health Information Exchange Network from June 1, 2020 until October 1, 2020.

The House is expected to vote on both bills when it returns to session next week.
Census Tip of the Week: Revised Census Timeline and Help for Nonprofit Service Providers
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. Nonprofit’s engagement in Census outreach is particularly critical since North Carolina continues to lag behind other states in our Census response rate. As of Wednesday, North Carolina’s response rate was 47.7%, well below the national average of 51.8% (see the U.S. Census Bureau’s map of response rates for more details).
Census Tip of the Week #1
The U.S. Census Bureau has updated its timeline for the 2020 Census count in light of the COVID-19 pandemic. Some key changes include:
  • The end of the self-response period (where households can complete the Census questionnaire online, by mail, or by phone) has been extended until October 31 (from July 31).
  • Census field offices will be at peak operations beginning on June 1 (originally scheduled for March 1).
  • Non-response follow-up (i.e. door-to-door enumerators) will take place from August 11 through October 31 (originally scheduled from May 13 through July 31).
  • The Census Bureau is still working with nonprofits and other partners to determine when it will count people experiencing homelessness and conduct service-based enumeration (at soup kitchens, shelters, and other service providers).
Census Tip of the Week #2
The NC Counts Coalition is looking for organizations that are currently providing services during the COVID-19 crisis to provide Census coloring books and crayons and/or Census promotional items (such as grocery bags for food banks). If your organization is available to help promote the Census as you serve our communities, please contact Durrell Johnson. NC Counts will figure out the logistics so your nonprofit won’t have to do any extra work to make this happen! Thank you in advance if your nonprofit can help “get out the count” while also providing essential services during this time of great need. (Note: We included the wrong email address in this message last week; if you replied and your email bounced back, please reply again to the corrected address in this item!)
Nonprofit Civic Engagement During COVID-19 Crisis
The COVID-19 crisis is changing the way that nonprofits engage in nonpartisan voter registration and get-out-the-vote activities. You Can Vote is offering a free series of online discussions on the first Thursday of every month to help nonprofits and businesses learn the latest on the 2020 election and the impact of COVID-19 on voter education, voter registration, and turnout. You Can Vote will share its plan and new tools to support your organization with the most up-to-date, fact-based voting rules and information. Register for the first of these meetings, which will be on May 7 at 12 p.m.
IRS Issues Proposed Rules on Silo-ing of UBIT “Trades of Businesses”
Yesterday, the IRS issued proposed rules to provide guidance on how nonprofits are to calculate their taxes on unrelated business income from separate trades or businesses. The 2017 Tax Cuts and Jobs Act effectively increased unrelated business income taxes (UBIT) on some nonprofits by adding Section 512(a)(6) to the Internal Revenue Code which only allows organizations to calculate tax separately on each “trade or business.” This new law means that, unlike for-profit businesses, nonprofits could no longer offset their income from one line of taxable business with expenses from a separate line of taxable business. The proposed rules are generally helpful for nonprofits, since they simplify the categorization of “trades or businesses” (meaning nonprofits with multiple lines of similar taxable business activities may have less UBIT liability) by allowing nonprofits to group their unrelated business income into about 20 broad categories (or silos) based on the first two numbers of NAICS codes. For instance, all types of accommodations and food services fall into one category (72). Public comments will be due 60 days after the proposed rules are published in the Federal Register.
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.

Your Center membership allows each staff member, board member, and key volunteer in your organization to set up their own online account to access member resources, benefits and services. Encourage everyone to create an account .