May 1, 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...
NC House and Senate approve COVID-19 relief legislation
DOL issues disappointing guidance on unemployment claims by self-insured nonprofits
Three NC members of Congress ask House leadership for more relief for nonprofits
Governor Cooper issues executive order on nonprofit membership meetings
Both U.S. Senators from North Carolina ask to add trade associations to PPP
Federal Reserve decides that nonprofits are ineligible for Main Street Lending Program
Census tip of the week: Revised Census timeline 
Nonprofit civic engagement during the COVID-19 crisis
NC House and Senate Approve COVID-19 Relief Legislation
During the opening week of its 2020 session, the NC General Assembly acted quickly on legislation to respond to the COVID-19 crisis. On Wednesday, the Senate unanimously approved an omnibus COVID-19 relief bill ( S.704) that makes a variety of appropriations and policy changes to help North Carolina respond to and recover from the pandemic. Yesterday, the House of Representatives merged six COVID-19 related bills into its own response legislation ( H.B. 1043), which passed by a 117-1 margin. Legislators are hoping to negotiate a final version of response legislation to send to Governor Roy Cooper tomorrow. Legislators will consider additional COVID-19 relief in the coming weeks and months. Many provisions in this week’s House and Senate COVID-19 legislation are important to nonprofits, including:  

  • Appropriations. The CARES Act provided about $3.5 billion in federal funding to help North Carolina respond to the COVID-19 crisis in 2020. The House bill would appropriate about $1.7 billion of this funding, while the Senate version would appropriate about $1.4 billion. Legislators are holding off on spending the remainder of the federal funding immediately in hopes that Congress will provide states flexibility to use some of the CARES Act money to make up for revenue shortfalls in the FY2020-21 budget. Consistent with the Center’s recommendations, both the House and Senate bills would provide immediate assistance to many nonprofits by formally appropriating a variety of grant funding from the CARES Act. These grants include support for food banks and other food assistance programs, affordable housing and homelessness prevention, hospitals and community health centers, arts organizations, the Community Services Block Grant and Community Development Block Grant, childcare services, and family violence prevention programs.

  • Unemployment Relief. Both the House and Senate bills would codify (and provide more details for) various COVID-19 unemployment insurance (UI) law changes that Governor Roy Cooper made through executive orders. These changes include a state unemployment tax (SUTA) credit for businesses and nonprofits that pay this tax and a provision that COVID-19 related UI benefits will not be charged to employers’ accounts. The Center is continuing to work with legislators and state officials to ensure that this relief is also afforded to self-insured nonprofits. The Senate version also would increase the maximum weekly UI benefits from $350 per week to $400 per week; many nonprofits have advocated for legislators to increase UI benefits.

  • Regulatory Flexibility. Both the House and Senate bills provide regulatory flexibility for state agencies during the COVID-19 crisis, allowing them to extend filing deadlines and waive late filing fees, penalties, and interest. Notably for nonprofits, this will enable the Secretary of State to extend charitable solicitation licensing deadlines beyond the typical 60-day automatic extension period.

  • Health Care Assistance. Both the House and Senate bills would expand access to telehealth services and increase access to medical supplies needed for COVID-19 prevention and treatment. The House version would temporarily expand Medicaid coverage to individuals with incomes up to 200% of the federal poverty level for COVID-19 prevention, testing, and treatment. The Senate would instead increase support for free and charitable clinics ($10 million) and community health centers ($5 million) to provide more COVID-19 services. The House version (but not the Senate version) includes an additional $75 million for rural hospitals and a 5% increase in fee-for-service rates for Medicaid providers during the COVID-19 crisis. Both versions include $1 million to each of the six food banks in North Carolina and $2.25 million for supplemental foster care payments.

  • Small Business Loans. Both the House and Senate bills would appropriate money to the Golden LEAF Foundation to expand the COVID-19 small business bridge loan program. The House bill includes $75 million for this program and the Senate bill includes $125 million. Nonprofits would not be eligible for these loans.

  • Immunity for Essential Businesses. The Senate bill (but not the House bill) would provide limited immunity for essential businesses for COVID-19 related illness or death of customers or employees incurred during the provision of products or services. It would not prevent employees from seeking workers compensation claims against their employees if they are diagnosed with COVID-19 while working. This provision is relevant for many nonprofits, since many types of nonprofit services were deemed “essential” in Governor Cooper’s “stay-at-home” executive order.
DOL Issues Disappointing Guidance on Unemployment Claims by Self-Insured Nonprofits
On Monday, the U.S. Department of Labor (DOL) issued guidance ( Unemployment Insurance Program Letter No. 18-20) on how states can implement a new federal law (Section 2103 of the CARES Act) intended to help minimize nonprofits’ liability for unemployment insurance (UI) claims related to COVID-19. The DOL guidance cuts against the intent of this CARES Act provision by:
  1. Delaying payments to nonprofits that would offset a portion of the costs related to their workers’ COVID-19 related UI claims; and
  2. Penalizing some states that try to provide additional assistance to these nonprofits.

The Center has posted an analysis of this new DOL guidance, explaining how it may hurt nonprofits, the economic recovery, and communities. We also offer four policy solutions to address some of nonprofits’ concerns in this guidance:
  1. Congress should amend Section 2103 of the CARES Act to replace the word “reimburse” with “reduce the costs of” so it is clearer that states need not have self-insured nonprofits seek a partial reimbursement of a reimbursement.
  2. Congress should amend Section 2103 of the CARES Act to hold harmless self-insured nonprofits for 100% (rather than just 50%) of their COVID-19 related UI claims.
  3. If Congress does not hold these nonprofits harmless, states can still provide this assistance by covering the remaining 50% of self-insured nonprofits’ COVID-19 related UI claims from their UI trust funds. State legislatures or Governors taking this action will need to be careful in wording their statutes or executive orders in a way that does not forfeit federal support.
  4. Most immediately, states should heed the guidance suggested in Section 2103 of the CARES Act and offer maximum flexibility in payment options for self-insured nonprofits. Specifically, states should delay payment liability for self-insured nonprofits through at least 2022.

The Center and other nonprofits have shared our concerns about the DOL guidance with members of Congress and with state legislators, and we are optimistic that policymakers will provide more unemployment relief to self-insured nonprofits.
Three NC Members of Congress Ask House Leadership for More Relief for Nonprofits
On Wednesday, 144 members of the U.S. House of Representative sent a letter to House leadership asking them for additional COVID-19 relief for nonprofits in the next federal stimulus bill. Specifically, the letter asks that Congress: 

  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. Protect Self-Insured Nonprofits. Holding harmless self-insured nonprofits by providing funding to cover 100% of the costs of these organizations’ unemployment claims.
  3. Bolster Charitable Giving Incentives. Strengthening temporary above-the-line charitable deduction from the CARES Act by allowing taxpayers to use it on 2019 taxes, significantly increasing the $300 cap, and extending it beyond 2020.

If these requests seem familiar, it’s because they are the same points that were raised in a recent letter from 461 North Carolina nonprofits (quite possibly including your own organization!) to our congressional delegation. Thanks to Congresswoman Alma Adams, Congressman G.K. Butterfield, and Congressman David Price for joining in this important letter to House leadership.
Governor Cooper Issues Executive Order on Nonprofit Membership Meetings
Last Friday, Governor Roy Cooper issued Executive Order No. 136 that allows nonprofits with members to hold membership meetings remotely during the COVID-19 crisis. The order gives boards the flexibility to allow membership meetings to take place by remote communication and through remote voting, even if these types of remote meetings are not expressly authorized in the nonprofit’s articles of incorporation or bylaws. The order took effect last Friday and lasts for 60 days, but will be rescinded if North Carolina’s state of emergency ends earlier. The Center is appreciative that Governor Cooper has provided this relief to nonprofits, since it will help some organizations continue to take actions that require membership approval during the COVID-19 crisis. The Center is continuing to work with legislators on a temporary provision to allow boards more flexibility in taking remote action.
IRS and SBA Issue (More) New Guidance on PPP Loans
This week, the Internal Revenue Service and the Small Business Administration released additional guidance on Paycheck Protection Program (PPP) loans. One new document explains how to calculate the maximum PPP loan amount for charitable nonprofits (question 6) and religious nonprofits (question 7). The interim final rule on seasonal employers provides guidance on ways entities with seasonal employees (e.g. nonprofits that would normally offer summer camps) can use an alternative base period that may help them become eligible for the PPP. 
Both U.S. Senators from North Carolina Ask to Add Trade Associations to PPP
This week, a bipartisan group of U.S. Senators sent a letter to Senate leadership asking for 501(c)(6) trade associations to be eligible for future PPP funding. Senator Richard Burr and Senator Thom Tillis from North Carolina both signed on to the letter.
Federal Reserve Decides that Nonprofits Are Ineligible for Main Street Lending Program
Yesterday, the Federal Reserved issued guidance on the new Main Street Lending Program, which provides COVID-19 loans to mid-sized businesses with between 500 and 10,000 employees. The guidance clarifies that nonprofits are ineligible for this program, but that the Federal Reserve is exploring other ways to provide financial assistance to nonprofits. This news, while expected, is disappointing since it means that none of the financial assistance programs from the CARES act are available to larger nonprofits. The Center and our national partners continue to advocate for Congress to provide COVID-19 assistance to nonprofits with 500 or more employees.
Census Tip of the Week: Revised Census Timeline
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 Tuesday, North Carolina’s response rate was 49.4%, well below the national average of 54.3% (see the U.S. Census Bureau’s map of response rates for more details).
Census Tip of the Week
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).
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.
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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