August 27, 2021
In this issue...
NC Senate committee approves nonprofit remote meeting legislation
NC House approves bill to allow employers to offer exclusive provider benefit plans
Free webinar to learn about local government ARP funding for nonprofits
State budget negotiations include decisions on many nonprofit appropriations and provisions 
Center offers tips as nonprofits consider COVID-19 vaccination requirements for employees
U.S. House of Representatives approves $3.5 trillion budget resolution
NC sends donor privacy legislation to Governor Cooper 
New law creates penalties for nonprofits that ignore state audits
Expanded unemployment benefits end next week
New report shows impact of nonprofits' voter engagement
SNAP benefits increasing in October
New report highlights economic benefits of expanded Child Tax Credit
U.S. Department of Education accepting comments on Public Service Loan Forgiveness
NC Senate interscholastic athletics bill could create precedent of limiting nonprofit independence
NC Senate Committee Approves Nonprofit Remote Meeting Legislation
On Tuesday, the NC Senate Commerce Committee approved a bill (H.B 320) that would make several changes to the NC Nonprofit Corporation Act to make it easier for nonprofits with members to conduct meetings remotely and for nonprofit board members to use email to take action by unanimous written consent. Under current law, nonprofits with members must conduct meetings in person, and nonprofits need board approval (typically in a provision in the nonprofit’s bylaws) to use email or other means of electronic communication for unanimous written consent votes of boards. The bill would enable nonprofits to hold membership meetings remotely and would create a default rule that nonprofit boards can use email to take action by unanimous consent outside of a meeting.

The proposed changes are based on recommendations from the Center, thanks to input we received from nonprofits during the COVID-19 pandemic. The Center is appreciative of Representative Destin Hall (R-Caldwell) and Senator Amy Galey (R-Alamance) for their leadership on this bill and for working with the Center and other nonprofits on legislative language that will be helpful for a wide range of nonprofit organizations.

The House unanimously passed the bill in March. The Senate Judiciary Committee could make some small changes to the bill when it takes it up (possibly next week).
NC House Approves Bill to Allow Employers to Offer Exclusive Provider Benefit Plans
On Tuesday, the NC House of Representatives approved a bill (S.228) that would allow North Carolina nonprofits and small businesses to offer exclusive provider benefit (EPO benefit) plans for their employees. EPO benefit plans are typically about 15% less expensive than other health insurance plans and allow participants to use a limited network of local health care providers while paying the full cost for any out-of-network health services other than emergency care. Potentially, this legislation could provide a meaningful and affordable health coverage option for some nonprofits. Earlier on Tuesday, the House Health Committee considered an alternative version of the bill that would have provided more protections for employees but may not have allowed for significant cost savings for employers. Ultimately, the committee approved the original version of the bill, and the full House then voted in favor of it by a 97-6 margin.

Yesterday, the Senate gave unanimous approval to the House-passed version of the bill, so it now goes to Governor Cooper for his consideration.
Free Webinar to Learn about Local Government ARP Funding for Nonprofits
Earlier this year, Congress passed the American Rescue Plan Act (ARP) to assist communities in their continued recovery from the COVID-19 pandemic. The ARP provided billions of dollars to the State of North Carolina and to local governments throughout the state. Local governments can use some of this funding to partner with nonprofits on programs and services to help communities and to provide relief to nonprofits that have suffered economic harm due to the pandemic.

To help nonprofits learn more about local ARP funding , the Center is offering a free webinar on Friday, September 3 at 10 a.m. about how nonprofits can partner with state and local governments to make the best use of ARP funds. The NC Pandemic Recovery Office will provide an overview of ARP funding in North Carolina, including the amount of funding available, permissible uses of funds, the process for distribution of funds, and the timing for allocation of funds by local governments. The Center will provide an update on the NC General Assembly’s allocation of state ARP funds and offer insights into trends in nonprofits’ needs and ways that nonprofits can engage with their local governments to advocate for meaningful and equitable allocation of local ARP funds. Register today.
State Budget Negotiations Include Decisions on Many Nonprofit Appropriations and Provisions
This week, a conference committee of members of the NC Senate and NC House of Representatives continued negotiations on a final version of the state budget for FY2021-23 (S.105). Legislators hope to come to agreement on appropriations and provisions by the second week of September so they can approve a final version of the budget for Governor Roy Cooper to sign.

The House and Senate each passed their own versions of the state budget earlier this summer. Both versions included significant new funding for nonprofits (about $701 million in the House budget, and about $360 million in the Senate budget), and a variety of other provisions that would affect the work of some or all charitable nonprofits in North Carolina. To help your nonprofit understand the differences between the two versions of the budget, the Center has prepared a chart comparing various appropriations and provisions affecting nonprofits in the House-approved budget and the Senate-approved version. The Center continues to advocate with legislators and the Governor’s Office to include favorable nonprofit provisions in the final version of the budget.
Center Offers Tips as Nonprofits Consider COVID-19 Vaccination Requirements for Employees
Now that the U.S. Food and Drug Administration has approved the Pfizer COVID-19 vaccine, many nonprofits are asking whether they can or should require their staff to get vaccinations. 

To answer the first question: It is legal for nonprofits to require their employees to be vaccinated. To help with the second question, the Center posted an analysis of the pros and cons of nonprofit vaccination requirements (spoiler alert: the pros probably outweigh the cons for most nonprofits). We have also included some tips for ways your organization can implement an employee vaccination requirement in a way that is fair and effective and that minimizes potential liability for your nonprofit.
U.S. House of Representatives Approves $3.5 Trillion Budget Resolution
On Tuesday, the U.S. House of Representatives approved a $3.5 trillion budget resolution that provides instructions for a variety of committees to develop the details of a federal budget next month. The Senate had approved the budget resolution earlier this month. The budget resolution is the first step in the congressional budget reconciliation process, which enables the Senate to approve a federal budget and other policy changes by a simple majority vote rather than the 60-vote requirement normally necessary to take action. Senate Democrats plan to include a wide variety of major policy changes in the budget reconciliation bill including universal Pre-K, extension of the expanded child tax credit, free community college, healthcare insurance expansion, immigration reform (including a path to citizenship), counter-climate change initiatives, and tax increases for corporations and high-income Americans. Congress could pass the budget as soon as next month.

Last week, four Democratic Senators and a Representative sent a letter to House and Senate leaders urging them to include in the reconciliation bill the WORK NOW Act, a $50 billion new grant program that would help nonprofit organizations retain their employees, scale their service delivery, and provide unemployed people with new jobs serving their communities. The letter also urged congressional leaders to ensure nonprofit eligibility for “every incentive and grant program” in the reconciliation bill.

The House also agreed on Tuesday to take a vote on the Infrastructure Investment and Jobs Act by September 27. The Senate approved the $1 trillion bipartisan bill earlier this month. North Carolina would receive about $8.7 billion of the infrastructure investment in the bill, including $7.2 billion for highway projects, $457 million for bridge repairs, $911 million for public transit, $109 million for electric vehicle charging, and $100 million for broadband access. A few provisions in the infrastructure bill could affect nonprofits, including:
  • Ending the Employee Retention Tax Credit (ERTC) on October 1, 2021. The American Rescue Plan Act had extended this refundable payroll tax credit through the end of the year, so the early expiration could mean less financial relief for some nonprofits.
  • Establishing a $50 million pilot program to support nonprofits that are retrofitting their buildings to be more energy efficient.
NC Sends Donor Privacy Legislation to Governor Cooper
On Wednesday, the NC Senate gave final approval to a bill (S.636) designed to create limits on the disclosure of donors to nonprofits. The bill essentially does two things:
  1. Prohibit nonprofits from disclosing “the identity of any person donating monies or other tangible goods to the nonprofit corporation” if a donor notifies the nonprofit that they would like their identity kept confidential. There is an exception for disclosures required by law, court order, or criminal investigations. 
  2. Prohibit state officials from providing Schedule B of nonprofits’ Forms 990 or 990-EZ (that is the attachment that includes donor information) in public records requests. This is consistent with federal tax law, which makes Schedule B donor information confidential.

The original version of the bill included a problematic provision that would have limited the ability of many nonprofits to acknowledge individual and corporate donors at events, on their websites, and in annual reports and other publications. The Center worked with the bill sponsor and organizations advocating for the bill to remove this provision from the final version.

The bill passed both the Senate and the House along partisan lines. It now goes to Governor Cooper for his consideration.
New Law Creates Penalties for Nonprofits That Ignore State Audits
On Monday, Governor Cooper signed into law a bill (H.B. 461) that creates a rule that nonprofits with state grants or contracts that do not provide information requested by the State Auditor as part of a state verification audit are presumed to have “failed to meet any condition precedent, classification, or other eligibility or qualifying standard subject to the verification audit.” This could create penalties for nonprofits that don’t comply with state verification audit requests.
Expanded Unemployment Benefits End Next Week
Several federal unemployment programs that were extended by the American Rescue Plan Act are scheduled to end on September 4. These programs include:
  • The Pandemic Unemployment Assistance program, which provides unemployment benefits to self-employed individuals and staff at religious organizations and small nonprofits that aren’t part of the state unemployment system;
  • The Pandemic Emergency Unemployment Compensation program, which provides unemployment benefits after workers have exhausted their 12 weeks of state benefits; and
  • The Federal Pandemic Unemployment Compensation program, which provides $300 per week in supplemental unemployment benefits.

The federal program that covers 75% of the costs of pandemic-related unemployment claims for reimbursing nonprofits also expires on September 4. Since the start of the pandemic, the state of North Carolina has not charged reimbursing nonprofits for their COVID-related unemployment claims, thanks to Governor Cooper’s Executive Order No. 118, which was issued in March 2020. It is unclear whether Governor Cooper will rescind this executive order once the federal unemployment benefits expire at the end of next week.
New Report Shows Impact of Nonprofits' Voter Engagement
On Monday, Nonprofit VOTE, a national partner of the Center, released its Nonprofit Power report, highlighting the impact of nonprofits’ nonpartisan voter registration, voter education, and get-out-the-vote activities in North Carolina and six other states in the 2020 election. Notably, the report found that voters contacted by nonprofits turned out at a 3% higher rate than demographically comparable voters (75% vs. 72%). The report includes practical steps nonprofits can take to increase their impact in communities.
SNAP Benefits Increasing in October
Beginning on October 1, the average benefit for the Supplemental Nutrition Assistance Program (SNAP, commonly referred to as food stamps) will increase by 21% (or $36.24 per person) a month. The increase, the first time in 45 years that SNAP’s purchasing power has been updated, is expected to improve food security, particularly among low-income families, and reduce demand on food banks and other food assistance programs typically operated by nonprofits. More than 42 million Americans rely on the program each month.
New Report Highlights Economic Benefits of Expanded Child Tax Credit
The monthly payments from the federal government for the expanded Child Tax Credit (CTC) boost local economies throughout the country by almost $20 billion each month, according to a report from the Joint Economic Committee (JEC) of Congress. Specifically, the report found that the expanded CTC payments on August 15 helped almost 61 million children and gave eligible families an average of $428 this month. The JEC estimates that as families use their funds to buy goods and services, they produce nearly $19.3 billion in additional spending in local economies each month, generating income for other individuals and businesses.
U.S. Department of Education Accepting Comments on Public Service Loan Forgiveness
The U.S. Department of Education is inviting public comments on Strengthening the Public Service Loan Forgiveness (PSLF) Program for people working in public service – including at charitable nonprofits – to offer input. The announcement recognizes that the program has not lived up to expectations, stating, “for too many public service workers, the program has not functioned the way they hoped it would.” The National Council of Nonprofit previously submitted comments on barriers that must be removed to promote and ensure forgiveness after program participants meet the requirements for PSLF. Individuals and nonprofits are encouraged to submit their own public comments by Friday, September 24.
NC Senate Interscholastic Athletics Bill Could Create Precedent of Limiting Nonprofit Independence
Yesterday, the NC Senate Education/Higher Education Committee adopted an amendment to a bill (H.B. 91) that would impose strict governance and operations requirements on the nonprofit organization that administers interscholastic high school athletic activities in North Carolina. Specifically, the amended bill would require the nonprofit to agree to a unilateral memorandum of understanding that:
  1. Sets standards for how the nonprofit’s board is selected;
  2. Requires the nonprofit to subject itself to state open meeting laws and public records laws;
  3. Regulates the way the nonprofit contracts with schools and other entities; and
  4. Places several limits on the nonprofit’s fundraising ability.

As part of its policy agenda to support and strengthen North Carolina’s nonprofit sector, the Center opposes government policies that limit nonprofits’ governance as independent, nongovernmental corporations with control over their own organizational policies and practices. The Center is concerned that this legislation would create a precedent of the state limiting the ability of a nonprofit organization to operate as an independent organization.
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Nonprofit Policy Update 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.