January 21, 2022
In this issue...
Center offers updated Legal Compliance Checklist for NC Nonprofits
Nonprofits with state appropriations can begin process of receiving funding
NC General Assembly votes to move 2020 primary election to June 7
NC Business Recovery Grants open for many nonprofits that pay UBIT
Coming this spring: Nonprofit Policy Briefings
Final 2021 lobbying reports due today
Center Offers Updated Legal Compliance Checklist for NC Nonprofits
The Center’s weekly Nonprofit Policy Update (i.e. the email you are reading right now!) provides updates on new and proposed legislation and regulations that might affect your nonprofit’s operations and mission. The Center also recognizes that it’s helpful for nonprofits to review the many federal and state laws (some new, some longstanding) that are necessary for your nonprofit to remain compliant. With this in mind, the Center has published its annual Legal Compliance Checklist for North Carolina Nonprofits, a comprehensive summary of laws affecting NC nonprofits’ tax exemption, governance, finances, advocacy, human resources, and fundraising – and how to comply.

This year’s edition includes details on legal issues related to COVID-19, new state tax and employee health insurance laws, changes to employment laws and state grant reporting requirements, and more.

The Legal Compliance Checklist is included as part of membership in the Center. If your nonprofit is a Center member, all of your staff and board members have access (download it here). The Legal Compliance Checklist is also available for purchase for nonprofits and others that aren’t Center members (purchase it here). Any 501(c)(3) nonprofit can also become a Center member to get free access to the Legal Compliance Checklist and a wide range of other resources and services.
Nonprofits with State Appropriations Can Begin Process of Receiving Funding
Hundreds of nonprofits received one-time appropriations (officially known as “directed grants”) in the state budget for FY2021-23 (S.105). Based on the Center’s analysis, state legislators included an unprecedented $849 million in new funding for nonprofits in the budget. Many nonprofits are receiving state funding for the first time, so they may be unfamiliar with the requirements that accompany these directed grants.

The state could begin paying nonprofits that received directed grants in the next two months. This week, the NC Office of State Budget and Management (OSBM) published a website with information about directed grants. The website includes a searchable database of directed grants and answers to frequently asked questions. If you think your nonprofit received a directed grant, check out the database to ensure that your organization is listed correctly. You also can begin the process of getting paid by completing and submitting several required forms:
  • IRS Form W-9;
  • Electronic Payment/Vendor Verification Form (available from your administering agency); 
  • Conflict of Interest Policy (Center members can find sample policies on our website);
  • Sworn (Notarized) No Overdue Tax Debt Certification (available from your administering agency); and
  • Grant Agreement/Contract (provided by your administering agency).

Most nonprofits receiving directed grants should have already been contacted by their administering agency. If your nonprofit hasn’t heard from your administering agency, you may want to consider reaching out to the agency directly.

OSBM also has developed a helpful flowchart showing the circuitous process for grant administration. This helps illustrate why the receipt of state funding can be a long and arduous process for many North Carolina nonprofits.
NC General Assembly Votes to Move 2020 Primary Election to June 7
Because of ongoing state court litigation surrounding redistricting, the NC Supreme Court issued an order last month delaying this year’s primary election from March 9 to May 17. On Wednesday, both the NC Senate and NC House of Representatives approved legislation (H.B. 605) to move the primary election to June 7. The later date would give the General Assembly time to redraw congressional and legislative maps if the Supreme Court rules next month that the House, Senate, and congressional maps that are scheduled to be used for elections between 2022 and 2030 are unconstitutional. The bill passed both chambers in party-line votes, and it is possible that Governor Roy Cooper could veto it, meaning that the court-ordered primary date of May 17 would remain in effect. 

As we wait for the primary date and districts to be settled, nonprofits can begin preparing your staff, volunteers, clients, and community to be informed voters in 2022. As trusted messengers in our communities, nonprofits are uniquely positioned to educate the people we serve about the kinds of decisions policymakers at the federal, state, and local level make that directly affect our lives. Clear, accurate, nonpartisan information such as these educational materials from You Can Vote make it easy for nonprofits to share basic information about what’s at stake when we do vote.
NC Business Recovery Grants Open for Many Nonprofits that Pay UBIT
Some nonprofits are eligible to apply for financial support through the new Business Recovery Grant program. The program provides economic recovery grants to businesses in the entertainment and hospitality industries and to other businesses that have not previously received federal or state relief for economic harm from the COVID-19 pandemic. While the program is designed to provide support for businesses (and not to nonprofits), 501(c)(3) nonprofits that pay state unrelated business income tax (UBIT) are eligible for grants if they meet one of the following criteria:
  1. They are in the arts, entertainment, recreation, accommodations, or food services industries and had declines in revenue of at least 20% during the first year of the pandemic (compared to the previous 12 months); or
  2. They are in any other industry, had declines in revenue of at least 20% during the first year of the pandemic (compared to the previous 12 months), and did not receive funding from other relief programs including Paycheck Protection Program, COVID-19 Job Retention Grant, and EIDL Advance. 

The NC Department of Revenue (DOR) is accepting applications from eligible businesses and nonprofits through January 31. Grants will be awarded for up to 10% of lost revenue for organizations that have previously received federal or state COVID-19 support and 20% for organizations that have not received government COVID-19 aid. The maximum grant award is $500,000. Additional information and applications are available at the DOR Business Recovery Grant program website.
Coming This Spring: Nonprofit Policy Briefings
The Center is planning a series of nonprofit policy briefings for this Spring. Based on your feedback, we are planning to offer the policy briefings as virtual, statewide events, including a few briefings that will focus on specific hot policy issues that are relevant to a wide range of nonprofits. Look for more details in the coming weeks.
Final 2021 Lobbying Reports Due Today
Nonprofits that were registered as lobbyist principals in 2021 (and their staff or contractors who were registered as lobbyists) must file their final quarterly reports with the Secretary of State Lobbying Compliance Division by today. Lobbyist principals need to use the special fourth quarter expense reports (available online) that include the cumulative total payments to lobbyists for their salaries and fees reasonably allocated for lobbying. To help you understand the basics of state lobbying laws affecting nonprofits, check out the Center's summary of NC lobbying laws for nonprofits.

Also, the NC Secretary of State has opened lobbying registration for 2022. Lobbyist principals (i.e. nonprofits that lobby) and lobbyists (i.e. nonprofit employees and contractors who lobby on behalf of nonprofits) must register annually with the Secretary of State.
The Center 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. Don’t miss out – become a member to ensure you continue receiving these updates along with many other valuable benefits.
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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.