August 14, 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 pandemic, we're temporarily providing this newsletter to non-member nonprofits.
In this issue...
Executive actions provide no COVID-19 relief for nonprofits
Competing proposals for PPP extension are mixed news for nonprofits
Census undercount could cost North Carolina funding and congressional representation  
NC Job Retention Grants application open for nonprofits through September 1
U.S. Labor Department issues guidance on charging UI costs to self-insured nonprofits 
Free resources and support for nonpartisan voter registration and voter education
Help identify legal needs for the community your nonprofit serves
Executive Actions Provide No COVID-19 Relief for Nonprofits
Last Saturday, President Donald Trump took four executive actions in an attempt to provide economic relief to some individuals and businesses affected by the COVID-19 pandemic. Most notably, two of the President’s memoranda would:
  1. Create a temporary new $400 per week supplemental payment for unemployed workers. The federal government would pay for 75% of these payments, but states would be required to cover the other 25%. Both Governor Roy Cooper and legislative leaders have indicated a desire for North Carolina to accept this new program and pay the state portion of it. They differ, however, in how to pay for it, with Governor Cooper suggesting that the state portion come from the Unemployment Insurance Trust Fund and legislative leaders preferring to use unspent CARES Act funding. The Governor and legislators will likely work out details once the U.S. Department of Labor issues guidance for states in the coming weeks. These expanded unemployment insurance (UI) benefits are particularly important to North Carolinians who are out of work, since our state UI benefits are capped at $350 per week – among the lowest in the country – and the $600 weekly federal payments under the CARES Act expired two weeks ago. 
  2. Defer payroll tax obligations from September 1, 2020 through December 31, 2020. The memorandum leaves many unanswered questions for nonprofits and their employees about the logistics and implications of the payroll tax deferrals. There are also concerns that this action may create funding shortfalls for Social Security and Medicare (the programs funded through payroll taxes) and that employers will need to payer higher payroll taxes in early 2021 as a result of deferring their taxes this fall. 

Nothing in the President’s executive actions would address the needs of nonprofits responding to the pandemic, such as expanding the Paycheck Protection Program, strengthening the universal charitable deduction, and providing needed funding for state and local governments and nonprofits providing services during the pandemic. Ultimately, Congress will need to reach an agreement on another COVID-19 relief bill to provide these types of assistance which are critical to nonprofits and the communities they serve.
Competing Proposals for PPP Extension Are Mixed News for Nonprofits
For now, negotiations between Congress and the White House over the next COVID-19 relief bill have stalled. Once Congress returns to Washington next month and negotiations resume, the future of the Paycheck Protection Program (PPP) will be particularly important for many nonprofits. Various congressional proposals would renew, alter, or expand the PPP. The HEROES Act, which was approved by the U.S. House of Representatives in May, includes access to PPP loans for nonprofits of all sizes. The HEALS Act, a U.S. Senate proposal, would create a second PPP forgivable loan opportunity for nonprofits and businesses. The RESTART Act, a bill that has been introduced in both houses of Congress, would improve on maximum loan amounts but would give nonprofits less favorable loan forgiveness terms than for-profit businesses would receive. The National Council of Nonprofits developed a good comparison of the pros and cons for nonprofits in each of these PPP proposals.
Census Undercount Could Cost North Carolina Funding and Congressional Representation
Last week, the U.S. Census Bureau announced that it would be ending its in-person operations on September 30, a month earlier than what the Bureau previously said would be necessary to ensure a complete and accurate count of all Americans in light of the delays stemming from the COVID-19 pandemic. September 30 will also be the deadline for households to self-respond to the Census by mail, email, or phone.

A new analysis from Carolina Demography provides more details about why an early end to the Census count is particularly problematic in North Carolina. Currently, more than 40% of North Carolina households still have not replied to the Census. A massive undercount could cost North Carolina billions of dollars in federal funding for public schools, childcare, health care, affordable housing, food assistance, and many other programs over the next decade. It also could cost North Carolina a 14th seat in the U.S. House of Representatives for the next decade.

The Center urges all North Carolina nonprofits to ensure that everyone in their communities – and particularly their staff, board members, volunteers, and the people they serve – have completed the Census questionnaire either online, by mail, by phone, or through an in-person visit from a Census Bureau representative. Carolina Demography has county-level analysis to help your nonprofit identify Census tracts in your community with particularly low response rates. The NC Counts Coalition has excellent resources to help nonprofits get-out-the-count in their communities.
NC Job Retention Grant Application Open for Nonprofits Through September 1
Last week, the NC Department of Commerce opened its application for the Job Retention Grant program. This new $15 million grant program is open to businesses and nonprofits that: (1) maintained 90% of payroll during the early part of the COVID-19 pandemic; (2) had at least a 10% reduction in gross receipts from the same period in 2019; and (3) did not receive federal loans through the Paycheck Protection Program or the Main Street Lending Program. The Center worked with legislators to ensure that nonprofits would be eligible for this job retention grant program. The deadline for applications is September 1.

For more information on the Job Retention Grants program, check out the new FAQs from the NC Department of Commerce and the recording of the informational webinar hosted by the Center last Friday. The NC Department of Commerce encourages nonprofits to review the required documents and information before beginning the application.
U.S. Labor Department Issues Guidance on Charging UI Costs to Self-Insured Nonprofits
On Wednesday, the U.S. Department of Labor (DOL) issued new guidance clarifying that self-insured nonprofits are not required to pay 100% of the costs of COVID-19 related unemployment insurance (UI) claims and wait for repayment of half or all of these costs from their state employment security agencies. The guidance comes a week after President Trump signed into law the Protecting Nonprofits from Catastrophic Cash Flow Strain Act (S. 4209). The new law and DOL guidance means that reimbursing nonprofits in North Carolina will not be charged for their COVID-19 related UI claims since the CARES Act provides funding for 50% of the cost of nonprofits’ UI claims and the state of North Carolina is not charging nonprofits for the other 50% of these costs. While the guidance is generally good (if expected) news for self-insured nonprofits, DOL made clear that it will still penalize states that are too generous in holding harmless reimbursing employers for their UI claims; it would require states that forgive 100% of these costs to return the 50% share covered by the federal government under the CARES Act. The Center continues to work to ensure that the process for protecting reimbursing nonprofits from UI liability due to COVID-19 is done in a way that protects the finances of both nonprofit organizations and the state of North Carolina.
Free Resources and Support for Nonpartisan Voter Registration and Voter Education
The COVID-19 pandemic has forced many nonprofits to rethink their plans for in-person voter registration and voter education work this year. To help North Carolina nonprofits navigate the changing landscape of nonpartisan voter registration and voter education, You Can Vote recently launched its Voting Rights Champion program. This program provides accurate, up-to-date, easy-to-read, bilingual (English/Spanish) resources on voter registration and the election process in North Carolina. Become a Voting Rights Champion to get access to free resources and support to ensure that voters in your nonprofit’s community can successfully cast their ballots this fall.

You Can Vote also has prepared an updated Voter FAQ that provides clear, accurate, and nonpartisan answers to a variety of common questions about the 2020 election process in North Carolina. The FAQ includes answers to common questions about absentee voting by mail (it will be very popular this year), the process for requesting an absentee ballot (it’s best to start the process sooner rather than later!), photo ID (not required this year), and voter fraud (it’s extremely rare). The Center encourages all nonprofits to read these FAQs and share them with their staff, boards, volunteers, and the people they serve.
Help Identify Legal Needs for the Community Your Nonprofit Serves
The NC Equal Access to Justice Commission and NC Equal Justice Alliance are conducting a survey to assess the civil legal needs of low-income communities across the state. Nonprofits that provide direct services are often the first to identify their clients’ legal needs. The Center encourages nonprofits that provide services to low-income communities to take 20 minutes to complete this survey to help NC Equal Access to Justice Commission, legal aid programs, and stakeholders set priorities and ensure that limited legal resources are allocated to the areas of greatest need. Individual survey responses will be confidential.
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Nonprofit Policy Matters is a weekly newsletter 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.