December 22, 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...
Congress approves COVID-19 package with significant relief for nonprofits
Legislation funds federal government through September 30, 2021
Take action: Your nonprofit can help minimize spread of COVID-19
Center releases 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector
Congress Approves COVID-19 Package with Significant Relief for Nonprofits
Last night, the U.S. House of Representatives and U.S. Senate passed a $900 billion COVID-19 relief package as part of an omnibus federal spending bill. Thanks to advocacy from the Center and many other nonprofits, the legislation includes several forms of relief for charitable nonprofits. Highlights of the bill for nonprofits include:
  • Expanding nonprofit access to Paycheck Protection Program (PPP) loans. The bill creates a second round of PPP funding for nonprofits and businesses with fewer than 300 employees that had a 25% reduction in gross receipts in any quarter of 2020. It also expands the types of expenses that are allowable for PPP loans to include personal protective equipment, certain supplier costs, facilities modifications, and certain workplace protection expenses. It appropriates $284 billion in additional funding for new PPP loans. Nonprofits with more than 500 employees are still not eligible for PPP loans.
  • Improving the Employee Retention Tax Credit (ERTC). The bill makes the ERTC available to more nonprofits by expanding it and changing eligibility requirements. Specifically, nonprofits that suffered a reduction in gross receipts of 20% or more in any quarter of 2020 are eligible for a 70% refundable tax credit covering wages of up to $10,000 per employee in each quarter (with a maximum of $14,000 per employee). For example, a nonprofit with 10 employees who each make $10,000 or more per quarter could qualify for a $70,000 refundable payroll tax credit (70% of $100,000). Nonprofits that received PPP loans can now qualify for the ERTC for wages not paid for by forgiven amounts of PPP loans.
  • Strengthening incentives for charitable giving. The bill extends the temporary universal charitable deduction through 2021. For 2021, it also expands the cap on this non-itemizer charitable deduction for married couples filing jointly from $300 to $600. Individual taxpayers who use the standard deduction will still be able to deduct up to $300 for their charitable contributions next year. In addition, the bill extends two temporary increases in charitable giving incentives through 2021. Specifically, for 2021, it increases the limits on deductible charitable contributions for corporations to 25% of taxable income (up from 10%) and it removes the 60% of adjusted gross income cap on deductible charitable contributions for individuals who itemize their deductions.
  • Increasing and extending federal unemployment insurance reimbursement for self-insured nonprofits. The bill extends federal funding to cover 50% of the COVID-related unemployment costs of self-insured nonprofits through March14, 2021. North Carolina is covering the other half of these costs for nonprofits in our state. 
  • Extending unemployment benefits. The bill extends 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 – through March 14, 2021. It also provides $300 per week in supplemental federal unemployment benefits for individuals who are out of work due to the pandemic, through March 14, 2021. This spring and summer, individuals had received $600 per week in supplemental benefits if they had been furloughed or laid off due to COVID-19. The bill also extends other CARES Act unemployment benefits through March 14, 2021. Without this legislative action, all of these unemployment benefits would have expired on December 30, 2020.
  • Extending the Coronavirus Relief Fund (CRF) deadline. Under the CARES Act, all CRF expenditures – including many North Carolina appropriations and grants to nonprofits – were required to have been spent by December 31, 2020. Because of this deadline, the U.S. Treasury Department was requiring nonprofits and state agencies to submit final CRF reports by January 8, 2021. The new COVID-19 relief package extends the deadline for CRF expenditures through December 31, 2021, which should prevent nonprofits from having to return unspent funds to the federal government and make final grant reports in the next few weeks. The state COVID-19 relief bill that appropriates much of North Carolina’s CRF funds incorporates any future congressional extension of the deadline.  

Some other highlights and omissions of the COVID-19 relief negotiations include:
  • Additional economic stimulus payments of $600 per person for individuals with adjusted gross income up to $75,000 and married couples with adjusted gross income up to $150,000.
  • A one-month extension of the Centers for Disease Control and Prevention eviction moratorium through January 31, 2021.
  • A $15 billion “Save Our Stages” grant program that will provide support to many nonprofit performing arts organizations and museums.
  • Expansion of the PPP program to 501(c)(6) trade associations.
  • Simplification of PPP loan forgiveness applications for borrowers – including nonprofits – with loans of $150,000 or less.
  • Extension of the paid sick leave and paid family and medical leave requirements from the Families First Coronavirus Response Act – and the federal tax credit to cover employers’ cost of providing paid leave – through March 31, 2021. These paid leave provisions were set to expire on December 31, 2020.
  • Allowance for individuals to carry over unused amount of health and dependent care flexible spending arrangement (FSA) benefits from 2020 into 2021.
  • No new direct aid for state and local governments. 
  • No liability protections against COVID-related claims for businesses, nonprofits, or individuals.

President Trump is expected to sign the bill into law this week. The National Council of Nonprofits has prepared a summary of the main nonprofit provisions in the COVID-19 relief package.

Thank you for your nonprofit’s advocacy over the past six months for Congress to provide COVID-19 relief for nonprofits and communities. Your calls, emails, texts, tweets, and personal conversations made a big difference!
Legislation Funds Federal Government through September 30, 2021
The bill that included the COVID-19 relief package also provides $1.4 trillion to fund the federal government for the remainder of the current fiscal year (through September 30, 2021). Overall, the 5,593-page bill provides $2.3 trillion in federal spending. Congress approved a temporary spending resolution on Friday night to avoid a short partial shutdown of the federal government this weekend.
Take Action: Your Nonprofit Can Help Minimize Spread of COVID-19
COVID-19 infections and hospitalizations reached record high levels in North Carolina and across the nation this week, and community spread is expected to continue for the near future. As we face the most challenging days of the pandemic, it is essential for every nonprofit to remind their staff, boards, volunteers, clients, and communities to take steps to minimize the further spread of COVID-19.

Nonprofits are trusted messengers, and many North Carolinians are more likely to take important public health actions if the message comes from a familiar nonprofit organization rather than a government official. Your nonprofit can make a big difference in fighting the pandemic by spreading the word about the importance of avoiding large gatherings over the holidays and practicing the “three Ws”:
  • Wear a cloth mask that covers your nose and mouth;
  • Wait six feet apart to avoid close contact with people outside your household; and
  • Wash your hands or use hand sanitizer. 

Look for more tips from the Center in the coming weeks on ways that your nonprofit can provide clear and accurate information about COVID-19 vaccines and other important public health actions.
Center Releases 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector
Last week, the Center’s Board of Directors approved the 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector. The Center advocates on state and federal public policy issues that affect all or most 501(c)(3) nonprofits in North Carolina. The public policy agenda highlights many of the specific issues that will be policy priorities next year, including COVID-19 relief, tax policy, government grants and contracts with nonprofits, and policy solutions related to nonprofit operations.
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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.