December 11, 2020
Note: The North Carolina Center for Nonprofits typically provides Nonprofit Policy Update 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...
U.S. House of Representatives approves one-week extension of spending bill
Congressional leaders continue negotiations on additional COVID-19 relief 
New executive order creates modified stay-at-home requirement in North Carolina
CARES Act provisions may affect year-end giving 
Holiday season advocacy tip: Introduce your nonprofit to newly-elected officials 
Congress Approves One-Week Extension of Deadline for Spending Bill
On Wednesday, the U.S. House of Representatives approved legislation extending the temporary funding for the federal government through next Friday, December 18. The U.S. Senate had hoped to pass the bill yesterday, but several Senators are threatening to use a procedural maneuver to delay the vote. Without this extension, parts of the federal government would have to shut down at the end of today. Congressional leaders are continuing to negotiate a federal spending bill for the remainder of the current fiscal year (through September 30, 2021) so the House and Senate can vote on it next week.
Congressional Leaders Continue Negotiations on Additional COVID-19 Relief
Throughout the week, leaders from both parties in the U.S. Senate and U.S. House of Representatives have negotiated a variety of proposals for additional COVID-19 relief legislation. Congress is trying to reach agreement on the details of COVID-19 relief in the next few days so it can be included in the spending bill that now needs to pass by next Friday.

The nonprofit sector continues to ask Congress to pass COVID-19 relief that includes several important provisions to help charitable organizations and the communities they serve:

  • Expanding Nonprofit Access to Relief and Support. Nonprofits are struggling financially and are facing ever-growing challenges in continuing to provide essential services to our communities. Congress can help by: 
  1. Expanding the eligibility for charitable nonprofits to participate in the Paycheck Protection Program (PPP) by modifying the current 500-employee cap so that mid-size and larger nonprofits can participate, and modify the PPP so that charitable nonprofits can participate in a second round of funding.
  2. Expanding the Employee Retention Tax Credit (ERTC) and allowing nonprofits to receive both PPP loans and the ERTC if they have retained their employees.

  • Strengthening Incentives for Charitable Giving. Donations are especially necessary today as nonprofits respond to the current health and economic crisis and will be critical in the future as nonprofits play an essential role in recovery efforts when the pandemic ends. Congress can help by: 
  1. Encouraging donations to charitable organizations in their communities by significantly increasing the $300 cap in the above-the-line or universal charitable deduction in the CARES Act.
  2. Extending the giving incentives in the CARES Act – including the universal charitable deduction and incentives for corporations and wealthier donors to give more – through at least 2021.
On Wednesday, the Center joined nearly 300 other national and statewide nonprofits in a letter urging congressional leaders to extend and expand the universal charitable deduction.

  • Increasing and Extending Federal Unemployment Insurance Reimbursement for Self-Insured Nonprofits. The CARES Act provides federal funds to cover 50% of the COVID-related unemployment costs of self-insured nonprofits through December 30, 2020. North Carolina is covering the other half these costs for nonprofits in our state at least through the end of 2020, but nonprofits in many parts of the country are still bearing a huge financial burden from unemployment claims caused by unforeseeable layoffs and furloughs stemming from the pandemic. Congress can help address this issue by:
  1. Increasing to 100% the federal unemployment insurance reimbursement for self-insured nonprofits.
  2. Extending this reimbursement through 2021.

  • Extending Unemployment Benefits. The Pandemic Unemployment Assistance program – which provides unemployment benefits to self-employed individuals and laid-off or furloughed workers at small and religious nonprofits that are exempt from unemployment requirements – is set to expire on December 30, 2020, along with several other temporary expansions of unemployment benefits. Congress can help communities by extending these programs into 2021 and by restoring weekly supplemental unemployment benefits for most laid-off or furloughed workers.

  • Providing Additional Aid for State and Local Governments. This additional funding is critical to help state and local governments continue to provide essential services despite growing revenue shortfalls.

  • Including Nonprofits in Liability Protections. Any provisions limiting businesses’ liability for reasonable actions during the pandemic also must apply to nonprofits and their board members and volunteers.
New Executive Order Creates Modified Stay-at-Home Requirement in North Carolina
With COVID-19 cases, hospitalizations, and deaths surging in North Carolina and across the country, Governor Roy Cooper issued Executive Order No. 181 on Tuesday. This new executive order, which takes effect at 5 p.m. today and stays in effect through January 8, 2021 requires businesses to close and North Carolina residents to remain at home between the hours of 10 p.m. and 5 a.m. This means that most nonprofits offering services to the public or hosting entertainment or other events will temporarily need to end these events or services by 10 p.m. The modified stay-at-home order includes a few exceptions that might apply to some nonprofits and their employees. Notably:
  1. Individuals may leave their homes after 10 p.m. to access food, medical supplies, fuel, and social services, and nonprofits providing these services may continue to do so after 10 p.m.
  2. North Carolinians can be away from home for work if they have duties that need to be performed between 10 p.m. and 5 a.m.
  3. Residents are allowed to spend the night at a home other than their principal place of residence, although they are required to adhere to gathering limitations and face covering and social distancing requirements if they are staying with family or friends who are not part of their household.

The executive order also extends the existing face covering requirements and Phase 3 of the re-opening of North Carolina’s economy through January 8, 2021.
CARES Act Provisions May Affect Year-End Giving
Two temporary provisions in the CARES Act may help some nonprofits with year-end fundraising campaigns:
  1. The CARES Act provides for a $300 above-the-line deduction for taxpayers who use the standard deduction. While many North Carolinians give generously to nonprofits regardless of whether they receive a tax benefit, this temporary universal charitable deduction may encourage some people in your community who do not typically donate to nonprofits to make up to $300 in charitable contributions this year.
  2. For wealthy donors who itemized their deductions, the CARES Act temporarily eliminates the 60% of adjusted gross income cap on deductible charitable contributions. For example, a taxpayer with $1 million in adjusted gross income would normally only be able to deduct $600,000 in charitable contributions, but this year, they could deduct $1 million in contributions. This means that these donors may have a tax incentive to make significantly larger charitable contributions this year or to pay the full amount of a multi-year pledge to a nonprofit before December 31, 2020.

Your nonprofit may want to consider reminding potential donors of these tax provisions in any year-end fundraising appeals you are sending.
Holiday Season Advocacy Tip: Introduce Your Nonprofit to Newly-Elected Officials
Now is a great time for nonprofits to get to know your new representatives in Congress, the state legislature, your county board of commissioners, and other elected offices that are important to your organization’s work. It is important for elected officials to understand the important work that your nonprofit does in your community so they can make decisions that will improve the lives of the people your nonprofit serves.

If your nonprofit is sending out holiday cards this year and you have a new member of Congress or the state legislature, consider adding them to your mailing list. Our three new members of Congress are Deborah Ross (serving the 2nd District), Kathy Manning (serving the 6th District), and Madison Cawthorn (serving the 11th District). The NC General Assembly has posted lists of newly-elected state representatives and state senators.
Not a Center Member? Join now.

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.