July 31, 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 negotiating additional COVID-19 relief
Expanded federal unemployment benefits set to end today
Learn more about Job Retention Grants available to NC nonprofits
Take 12 minutes today to let funders and state government know what your nonprofit needs
New FAQs provide clear answers to common nonprofit questions about 2020 election process
United Way of North Carolina survey assesses impact of pandemic on North Carolinians
Free webinar on nonpartisan candidate engagement as events move online
Congress Negotiating Additional COVID-19 Relief
On Monday, U.S. Senate leaders released the Health, Economic Assistance, Liability Protection and Schools Act (HEALS Act), the Senate’s roughly $1 trillion proposal for the next COVID-19 relief legislation. In May, the U.S. House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), its $3 trillion proposed COVID-19 relief bill. Leaders in Congress and the White House are trying to negotiate a compromise bill by the end of next week. Several provisions in the proposed COVID-19 relief bills would affect the work of nonprofits, including:

  • Paycheck Protection Program (PPP) Expansion. Thousands of North Carolina nonprofits received forgivable PPP loans over the past few months. The HEROES Act would set aside 25% of PPP funding for nonprofits and would expand eligibility to non-501(c)(3) nonprofits and to nonprofits with more than 500 employees. The HEALS Act would expand eligibility to 501(c)(6) trade associations and would create a second round of PPP funding for businesses and nonprofits with 300 or fewer employees that experienced at least a 50% reduction in gross receipts from the same period in 2019.
  • Funding for State and Local Governments. Even with the federal support from the CARES Act, the state of North Carolina is facing a budget shortfall of more than $4 billion for the current fiscal year, and local governments across the state are also being forced to make significant budget cuts. The HEROES Act would provide about $875 billion in additional appropriations for state and local governments. While the HEALS Act does not provide new funding for state and local governments, it would provide states, counties, and municipalities greater flexibility in spending unappropriated CARES Act money to fill budget holes.
  • Universal Charitable Deduction. The CARES Act created a very limited universal charitable deduction (capped at $300) for 2020. Nonprofits continue to advocate for Congress to expand this provision to allow all taxpayers to deduct their charitable contributions up to one-third of the standard deduction (more than $4,000 for individuals, and more than $8,000 for married couples filing jointly). This expansion would be a much more meaningful way to increase charitable giving to help nonprofits respond to the pandemic. Neither the HEALS Act nor the HEROES Act would expand the universal charitable deduction.
  • Employee Retention Tax Credit. The CARES Act included a very limited Employee Retention Tax Credit (ERTC) that was only available to businesses and nonprofits that did not receive PPP loans and suffered severe economic loss due to the pandemic. Both the HEROES Act and HEALS Act would significantly increase the value of the ERTC, ease eligibility standards (so that nonprofits with drops in gross receipts of 10% to 25% may be eligible), and enable businesses and nonprofits that received PPP loans to also use the ERTC. The expanded ERTC could be a significant new financial relief program for nonprofits that suffered economic harm due to the pandemic.
  • Unemployment Coverage for Self-Insured Nonprofits. The CARES Act provided federal funds to cover 50% of the COVID-19 related unemployment insurance (UI) costs of self-insured nonprofits (i.e. organizations that elect to reimburse their state unemployment trust funds for UI claims rather than pay state unemployment insurance). The HEALS Act would improve upon this by providing federal funds to cover 75% of self-insured nonprofits’ UI costs. The HEROES Act would maintain the 50% provision from the CARES Act. Regardless of what Congress does, a North Carolina law will hold self-insured nonprofits harmless for the cost of their COVID-19 related UI claims.
  • Liability Protections. Many nonprofits have expressed concerns about the possibility of legal liability if someone who has been in their facilities contracts COVID-19 and sues the nonprofit. This is a particular concern since many insurance providers are excluding COVID-19 claims from coverage. The HEALS Act would limit liability for nonprofits and businesses for personal injuries arising from alleged COVID-19 exposure at their facilities. This provision would complement a recent state law that provides limited immunity for nonprofits, businesses, and individuals (including nonprofit volunteers and board members) from claims of transmission of COVID-19. The HEROES Act does not include any liability protections for nonprofits or businesses.
  • Appropriations. The HEROES Act includes a wide range of appropriations, including increased funding for the Supplemental Nutrition Assistance Program (SNAP), food banks, the 2020 U.S. Census, arts and humanities nonprofits, domestic violence organizations, legal services nonprofits, hospitals, mental health service providers, and the Community Development Block Grant. The HEALS Act includes far fewer appropriations for nonprofits and government agencies, but it would include additional funding for healthcare and mental health providers. Nonprofits have asked Congress to pass the Work Opportunities and Resources to Keep Nonprofit Organizations Well Act (WORK NOW Act), which would provide $50 billion in grants to nonprofits that have experienced increased demand for services during the pandemic. Neither the HEROES Act nor the HEALS Act includes the $50 billion in nonprofit grant funding from the WORK NOW Act.

The National Council of Nonprofits has prepared a good summary of the key nonprofit provisions in the HEALS Act and the HEROES Act.
Expanded Federal Unemployment Benefits Set to End Today
One of the most important features of the CARES Act was the extension and expansion of unemployment insurance (UI) benefits for the millions of Americans who are out of work due to COVID-19. One of these benefits, the Federal Pandemic Unemployment Compensation (FPUC) program, provides $600 per week in supplemental UI benefits to workers who are unemployment due to COVID-19. These $600 supplemental UI benefits will expire today unless Congress acts to extend them (which is extremely unlikely at this point). These supplemental benefits are particularly important to North Carolinians who are out of work since our state UI benefits, which are capped at $350 per week, are among the lowest in the country. The expiration of these supplemental benefits will mean that many nonprofit employees who have been furloughed or laid off will see a steep decrease in their UI benefits next week. It also will create greater demand for many nonprofits’ services, as hundreds of thousands of North Carolinians who are out of work will lose nearly two-thirds of their weekly UI benefits and will need to rely more on nonprofits to provide for basic needs like food, rental assistance, and healthcare. 

Congressional leaders from both parties recognize the importance of extending FPUC benefits, but they disagree on the details of the extension of these supplemental UI benefits. The HEALS Act would extend the supplemental benefits but reduce the weekly payments to $200 per week through October and then use a formula to provide for UI benefits that would be capped at 70% of workers’ normal weekly wages. The HEROES Act would extend the full $600 per week benefits through January 31, 2021. The extension of these benefits remains an important part of the ongoing negotiations over the next COVID-19 relief legislation, even though it will come too late to prevent a gap in supplemental UI benefits for unemployed workers.

The CARES Act also created the Pandemic Unemployment Assistance (PUA) program that provides UI benefits for many unemployed Americans who are out of work due to COVID-19 and who normally would be ineligible for state UI benefits. Notably, PUA provides unemployment benefits to many out-of-work independent contractors and to laid off or furloughed employees of religious nonprofits and small nonprofits with fewer than four employees that are exempt from providing UI benefits. PUA benefits continue through December 31, but independent contractors and workers who have been laid off or furloughed by exempt nonprofits also will see their weekly benefit amounts drop by $600 next week.
Learn More about Job Retention Grants Available to NC Nonprofits
Last month, the NC General Assembly created a $15 million grant program for 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 NC Department of Commerce is finalizing the grant application, which should be available in early August. The Center and NC Department of Commerce are offering a free webinar next Friday, August 7 at 11 a.m. to provide more information about this grant opportunity. If your nonprofit is interested in applying for a grant, we strongly encourage you to join the webinar.
Take 12 Minutes Today to Let Funders and State Government Know What Your Nonprofit Needs
In late May, the Center and our state government partners launched a survey on the impact of COVID-19 on North Carolina nonprofits. Nearly 2,000 nonprofits have already completed the survey. Please take 12 minutes to complete the survey, which asks about your organization's operations and needs during the COVID-19 crisis. Your response will inform government, philanthropy, and others about what COVID-19 related needs are most pressing in North Carolina. Responses completed by the end of the day today will be included in analyses of the impact of the pandemic on North Carolina’s nonprofit sector.  
The survey (available in English and Spanish) is a joint effort of the Center, the Office of the NC Secretary of State, and the Strategic Partnerships office at the NC Office of State Budget and Management. Thank you if your organization has already completed the survey.
New FAQs Provide Clear Answers to Common Nonprofit Questions about 2020 Election Process
You Can Vote, a nonprofit helping with nonpartisan voter education in North Carolina, 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.
United Way of North Carolina Survey Assesses Impact of Pandemic on North Carolinians
This week, the United Way of North Carolina launched a COVID-19 Impact Survey to learn more about the impact of the pandemic on individuals and families in every community of North Carolina. This 10-minute survey is available for every household – in English and Spanish – to complete on or before August 21. The Center encourages nonprofits to consider sharing the survey link with their staff, board, volunteers, and the people they serve.
Free Webinar on Nonpartisan Candidate Engagement as Events Move Online
In recent elections, nonprofits have used nonpartisan candidate forums, nonpartisan candidate questionnaires, and nonpartisan participation in campaign events to help inform their communities about choices on the ballot. Although in-person events will be limited this year and many campaigns are choosing digital outreach to prioritize the safety of the community, there is still a role for nonprofits to play! Nonprofit VOTE is offering a free webinar on Thursday, August 13 from 2-3 p.m. that will cover why candidate engagement matters, remaining nonpartisan, and ways to adapt to online platforms.
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.

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 .