February 26, 2021
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 to vote on COVID relief package
SBA limiting PPP loan applications to very small employers through March 4 
Take 3 minutes to tell us whether sales tax exemption for fundraising events would help your nonprofit 
Spread the word: Some North Carolinians need to use IRS Form 1040 for stimulus payments 
NC House committee approves bill that would prevent UI cost increases for nonprofits
Governor Cooper eases some COVID-19 restrictions on businesses and nonprofits
Census Bureau data delay could cause problems with NC elections and redistricting
Take action: Let your state legislators know what COVID relief would help your community
Take action: Share accurate information about vaccines with your community
NC General Assembly could consider nonprofit issues this year
Center offers nonprofit policy briefings next month
U.S. House to Vote on COVID Relief Package
On Monday, the U.S. House of Representatives Budget Committee approved the American Rescue Plan Act of 2021, the $1.9 trillion COVID relief package that President Biden has proposed. The House Rules Committee began consideration of the bill this morning, and the full House is expected to vote on it later today or tomorrow. Some highlights of the American Rescue Plan Act for nonprofits include:
  • Improvements to the Paycheck Protection Program (PPP) Loan Programs. The American Rescue Plan would allow many larger nonprofits to apply for PPP loans for the first time by extending eligibility to nonprofits with more than 500 employees that operate at multiple locations as long as no more than 500 employees work at any one location. It also would remove a rule that makes some nonprofits ineligible for PPP loans if they are affiliates of national organizations.
  • Extension and Improvement of Federal Unemployment Coverage. The COVID relief package would extend various federal benefits for unemployed workers – including coverage for self-employed workers and staff of religious and very small nonprofits, as well as increasing to $400 (formerly $300) per week supplemental federal payments – through August 29, 2021. Currently, these benefits are scheduled to expire on March 14. Notably for nonprofits, the provisions would have the federal government cover 75% of the unemployment costs of reimbursing nonprofits from April 1 through August 29; currently, the federal government is only covering 50% of these costs, and the state of North Carolina is covering the other 50%. 
  • Tax Relief for Individuals and Employers. The American Rescue Plan Act would provide $1,400 stimulus checks for most taxpayers, would increase the child tax credit and earned income tax credit, and would extend the tax credit for nonprofits and other employers that offer paid sick leave and paid family and medical leave through September 30, 2021 (it is currently set to expire on March 31).
  • No Change to the Universal Charitable Deduction. Taxpayers who use the standard deduction on their federal taxes would still be able to get a small, above-the-line deduction for their charitable contributions in 2021. Under current law, this universal charitable deduction applies to the first $300 in cash donations for individual taxpayers and the first $600 for married couples filing jointly. Tax incentives for charitable giving are particularly important at a time when need is growing and donations to small nonprofits are stagnating; a new report from Blackbaud found that donations to nonprofits with budgets under $1 million dropped by 7.2% last year.
  • Increased Federal Funding for Various Programs Important to the Work of Nonprofits. The American Rescue Plan Act would provide additional funding for child care providers, the Corporation for National and Community Service, arts and humanities organizations, food assistance, housing and homelessness prevention, and nonprofits providing services to survivors of domestic violence and sexual assault.
  • $350 Billion in Additional Funding for State and Local Governments. This support could help ease financial pressures on cities and counties throughout North Carolina and provide additional support to state legislators to invest in nonprofits providing COVID relief. 
  • Gradual Increase of the Federal Minimum Wage to $15 Per Hour Over the Next Four Years. Many analysts expect that a higher minimum wage would reduce poverty, which would improve the lives of many clients of nonprofits. Note: The Senate will have to remove this provision from the bill next week since the Senate parliamentarian ruled last night that it could not be included in legislation passed through the budget reconciliation process.
  • Funding for COVID-19 Vaccines, Treatment, and Testing As Well As Other Public Health Programs. The added investment in these public health measures would significantly reduce the spread of COVID-19 in the coming months. 

Many of these important provisions are included in the American Rescue Plan Act because of the persistent advocacy of nonprofits. Once it passes the House, the Senate will consider it and could make changes over the next two weeks. Nonprofits continue to advocate for the Senate to strengthen the universal charitable deduction and to change rules for second-draw PPP loans so that nonprofits can receive these loans even if they did not have a 25% reduction in gross receipts for one or more quarters of 2020 (compared to the same quarter(s) in 2019).

President Biden hopes to sign the American Rescue Plan Act into law before unemployment benefits expire on March 14. Because Congress is using the budget reconciliation process for this COVID relief plan, it only needs 50 votes to pass the Senate (most bills require 60 votes for Senate approval).
SBA Limiting PPP Loan Applications to Very Small Employers through March 4
President Biden announced on Monday a two-week period in which the Small Business Administration (SBA) will only process PPP loans for businesses and nonprofits with fewer than 20 employees. The priority period runs from February 24 through March 9. In an effort to make the PPP loan application more equitable, the Administration is also clarifying access to loans by non-citizen lawful residents and eliminating two restrictions that frustrate access to PPP loans: one dealing with individuals with non-fraud felony convictions and the other relating to individuals with delinquent federal student loans.
Take 3 Minutes To Tell Us Whether Sales Tax Exemption for Fundraising Events Would Help Your Nonprofit
Under current state law, nonprofits and businesses are required to charge sales tax on the ticket price or admission fees to entertainment and live events, then pass along the taxes they collect to the NC Department of Revenue. Because this law does not specifically address nonprofit fundraising events, many nonprofits are confused about whether they need to charge sales tax on tickets to these events – or at least the portion of ticket prices that is not tax-deductible as a charitable contribution. Adding sales tax to ticket fees often creates administrative burdens for nonprofits and reduces the amount of revenue from events that goes to nonprofits’ missions. 

To address this confusion and help nonprofits keep more of the proceeds from their fundraising events, the Center is asking legislators to fix the law to clarify that nonprofits don’t need to charge sales tax on tickets to fundraising events. Please help us make the case to state legislators by taking three minutes to complete a survey on your nonprofit’s experience with sales tax and fundraising events.
Spread the Word: Some North Carolinians Need To Use IRS Form 1040 for Stimulus Payments
As part of the COVID relief package that was approved in December, most Americans were eligible for Economic Impact Payments – or stimulus payments – in the amount of $600 for each person in their household. The IRS has made direct deposits or issued checks for these stimulus payments, but many North Carolinians – particularly people with incomes too low to normally file federal income tax returns and those with children – may not have received these payments or may not have received the full amount they are due. The IRS has a tool to allow individuals to check the status of their stimulus payments.

Individuals and families that did not receive their stimulus payments are eligible for a Recovery Rebate Credit, which they can claim by filing IRS Form 1040 and using line 30. The Center strongly encourages nonprofits – particularly those serving North Carolinians in poverty and those serving children – to help spread the word to ensure that those who did not receive their full Economic Impact Payments file a Form 1040 and use line 30 to request their stimulus payments.
NC House Committee Approves Bill That Would Prevent UI Cost Increases for Nonprofits
Yesterday, the NC House Finance Committee approved a bill (H.B. 107) that would prevent increases in unemployment insurance (UI) costs for virtually all North Carolina nonprofits this year. Two parts of the bill are particularly noteworthy for nonprofits:
  1. It would keep the base rate for state unemployment tax (SUTA) at 1.9% for 2021. Without this change, the tax rate would increase to 2.4% this year. Businesses and many nonprofits pay SUTA quarterly. Their tax rate is a combination of the base rate and their experience rating, which is based on the history of UI claims by their employees.
  2. It would extend the period when employers’ accounts will not be charged for COVID-related UI claims through December 31, 2021 (or the expiration of Governor Roy Cooper’s emergency declaration, if that occurs before the end of this year). This non-charging period expired on December 31, 2020. This provision is significant for nonprofits that elect to reimburse the state for UI claims rather than pay SUTA, since it means they are not liable for the 50% of the cost of these claims that is not covered by federal payments. For reimbursing nonprofits that have laid off or furloughed staff, this provision is a significant costs savings. Since the start of the pandemic, the Center has successfully advocated that it is essential that state policymakers hold harmless reimbursing nonprofits for their COVID-related UI claims, and this bill would continue this important policy into 2021.

The House Rules Committee is expected to vote on the bill early next week.
Governor Cooper Eases Some COVID-19 Restrictions on Businesses and Nonprofits
On Tuesday, Governor Roy Cooper issued Executive Order No. 195, which eases COVID-related limits on occupancy at a variety of venues. Under the new executive order, several types of venues may now operate at up to 30% of capacity, with a limit of 250 people indoors. These include:
  • Meeting, reception, and conference spaces;
  • Performance venues;
  • Entertainment facilities; and
  • Sports arenas and fields.

Other types of facilities may now open at 50% capacity, including:
  • Fitness and physical activity facilities;
  • Pools;
  • Museums and aquariums; and 
  • Retailers, including nonprofit thrift stores.

The executive order takes effect at 5 p.m. today and continues through March 26.
Census Bureau Data Delay Could Cause Problems with NC Elections and Redistricting
The U.S. Census Bureau recently announced that Census data used for redistricting will not be available until September 30, 2021. This has two significant implications for North Carolina:
  1. It could delay some elections in North Carolina. Across the state, 62 municipalities are schedule to hold elections next year. These elections will likely need to be pushed back to 2022 since it will be impossible to redraw districts in time for elections this fall. Also, North Carolina’s 2022 congressional and state legislative primary elections will probably need to be delayed from March 2022 until May 2022. 
  2. Legislators will have less time than usual to decide upon the state’s congressional and state legislative districts for the next decade. Some nonprofits are concerned that this will mean less transparency and more partisanship in the redistricting process. The Center supports an independent and transparent redistricting process. We have explained that this type of process is important for nonprofits since it helps create more competitive elections and ensures that elected officials will seek input from nonpartisan nonprofits rather than from partisan political donors on important policy matters.

Because nonprofits are trusted messengers in their communities, it is important for nonprofit organizations to provide clear information about (admittedly confusing) election process changes with their staff, volunteers, clients, and communities. Look for more information from the Center – and some steps you can take to spread the word about elections – once these changes are finalized.
Take Action: Let Your State Legislators Know What COVID Relief Would Help Your Community
A recent report from the NC Office of State Budget and Management and nonpartisan legislative staff estimates that state revenue over the next two years will be about $4 billion higher than budgeted. With significant revenue available now – and possibly more coming once Congress passes the American Rescue Plan Act – the NC General Assembly has resources to provide additional COVID relief for North Carolina individuals, businesses, nonprofits, and communities. As legislators develop a COVID relief bill, they will likely seek bipartisan legislation. This means that your legislators’ voices will matter regardless of their political parties. This also means that your voice matters since you are their constituent! 

Now is a great time to find your state legislators and write to let them know what support the state can provide that would help your community. Before you get started, take a few minutes to read this blog post from friend of the Center Lisa Hazirjian with tips on how to write an effective letter to your elected officials, complete with an easy-to-use worksheet and samples of effective letters.
Take Action: Share Accurate Information about Vaccines with Your Community
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 COVID-19 pandemic by spreading information about the availability, safety, and importance of vaccines and about the continuing importance of wearing masks and social distancing when in public. 

Earlier this week, North Carolina opened vaccines to educators, school personnel, and child care workers. North Carolina is also still vaccinating health care workers, long-term care staff and residents, and people 65 and older.

NC Department of Health and Human Services (DHHS) tools that can help nonprofits spread the word about vaccines include:
  • An online Find My Group tool to help North Carolinians know when they will be eligible to get their vaccine.
  • A Find My Spot search tool to help North Carolinians locate vaccine providers near where they live and work. 
  • A newly expanded COVID-19 vaccine help center that is available by phone at 888-675-4567 on Mondays-Fridays from 7 a.m.-7 p.m. and on weekends from 8 a.m.-4 p.m. The help center provides support in English, Spanish, and TTY. Callers can get help with general COVID-19 vaccine questions, information on eligibility groups, clinical questions about the vaccine, how to find vaccine locations, and transportation services. 
  • An updated COVID-19 vaccine communications toolkit with ready-made materials to provide clear and accurate information about the safe and effective vaccines.
NC General Assembly Could Consider Nonprofit Issues This Year
Now that the NC General Assembly is beginning to take up legislation, the Center is talking with legislators from both parties about policy solutions that would help nonprofits operate more effectively. These ideas include:

Throughout the legislative session, the Center will keep you posted when legislators introduce bills to help nonprofits operate more effectively to provide essential services in our communities. We’ll also let you know when there is a need for your nonprofit to take action to advocate for legislators to help nonprofits.

The Center’s legislative priorities are based on input from charitable nonprofits. Let us know if our 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector is missing something important that would help your nonprofit and other organizations throughout North Carolina.
Center Offers Nonprofit Policy Briefings Next Month
The Center will offer two online nonprofit policy briefings next month. The first policy briefing on Monday, March 15, will provide an overview of the latest federal and state COVID-19 relief plans and the potential policy solutions that could help nonprofits during the 2021 NC legislative session. The second policy briefing on Friday, March 19, will feature a bipartisan panel of state legislators sharing insights on state policy priorities in 2021, the budget process, and how nonprofits can effectively engage with elected officials as the pandemic continues. Join us for one or both of these policy briefings.
Spread the Word
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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.