January 8, 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...
A call to action for nonprofits in response to events at U.S. Capitol
Join a free Nonprofit Town Hall to learn more about new COVID relief for nonprofits
SBA releases guidance on second draw PPP loans
Nonprofits now have option of offering paid leave to workers out due to COVID-19
Take action: Your nonprofit can help minimize spread of COVID-19
DOL issues final regulations on worker classification
Center releases 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector
Governor Cooper (again) extends executive order on nonprofit membership meetings
Governor Cooper extends Phase 3 of reopening by three weeks
Final 2020 lobbying reports due by January 25
A Call to Action for Nonprofits in Response to Events at U.S. Capitol
Like many other nonprofits, the Center was shocked and dismayed by the mob violence at the U.S. Capitol this week. While North Carolina nonprofits weren’t directly involved in Wednesday’s insurrection, it is our responsibility to help heal the divisions that led to this horrific event. As leaders in our communities, nonprofits can and should use our voices to help restore our democracy by providing clear and accurate information about current events, diffusing baseless conspiracy theories, working to dismantle systemic racism, and using our nonpartisan voices to promote civil discourse and civic participation.
Join a Free Nonprofit Town Hall to Learn More About New COVID Relief for Nonprofits
After many months of inaction, Congress finally approved important COVID-19 relief for individuals, nonprofits, businesses, and governments last month. This legislation includes new opportunities for financial support for nonprofits, extension of unemployment benefits, a slightly expanded universal charitable deduction, and a one-year extension of the deadline for state and local governments to spend Coronavirus Relief Fund money. The Center has prepared an analysis of these and other provisions that would affect nonprofits. To learn more, we encourage you to register for a free Nonprofit Town Hall briefing hosted by the National Council of Nonprofits on Wednesday, January 13 at 3:00 p.m.
SBA Releases Guidance on Second Draw PPP Loans
This week, the Small Business Administration released its interim final rule on second draw Paycheck Protection Program (PPP) loans under the recently-enacted COVID-19 relief bill. Nonprofits are generally eligible for forgivable second draw PPP loans if they received PPP loans last year, have fewer than 300 employees, and had a decline in gross receipts (as calculated for Form 990) of at least 25% in any calendar quarter of 2020 (relative to the same quarter in 2019). Under the new guidance, second draw PPP loans will have very similar terms to original PPP loans. The deadline for applications will be March 31, 2021.

Nonprofits Now Have Option of Offering Paid Leave to Workers Out Due to COVID-19
The COVID-19 relief bill that was signed into law last month did not extend the paid sick leave and paid family and medical leave requirements from the Families First Coronavirus Response Act (FFCRA). Under FFCRA, most employers (including most nonprofits) with fewer than 500 employees were required to provide up to 80 hours of paid sick leave (at worker’s full rate of pay) and up to 10 weeks of paid family and medical leave (at 60% of workers’ regular rate of pay) for any employees who were out of work due to COVID-19. These paid leave mandates expired on December 31, 2020.

The new COVID-19 legislation does, however, allow nonprofits and other employers that had been covered by the FFCRA paid leave mandates to continue to receive refundable payroll tax credits if they provide paid sick leave and paid family and medical leave in a manner consistent with FFCRA mandates (if they were still in effect) between January 1, 2021 and March 31, 2021. For example, if a nonprofit offered 10 weeks of paid family and medical leave at 60% of employees’ usual rate of pay in 2020 and continues to offer this paid family and medical leave in 2021, it can receive a payroll tax credit to cover the cost of any leave taken by employees in the first three months of 2021.

The UNC School of Government has provided a helpful analysis of considerations for local government employers in deciding whether to continue to offer paid sick leave and paid family and medical leave during the first quarter of 2021. This analysis is also useful for nonprofit employers. The U.S. Department of Labor has also updated its FAQs on FFCRA paid leave to address the expiration of the FFCRA paid leave mandates.
Take Action: Your Nonprofit Can Help Minimize Spread of COVID-19
COVID-19 infections and hospitalizations remain at record high levels in North Carolina and across the nation, 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.
DOL Issues Final Regulations on Worker Classification
Yesterday, the U.S. Department of Labor (DOL) issued its final regulations creating a new “economic realities” test that employers can use to determine whether their workers are employees or independent contractors. The regulations, which take effect on March 8, replace an existing multi-factor test with a two-prong test focusing on the employee’s exercise of control over their work and their opportunity for profit or loss. Employers could also consider three other factors as “additional guideposts” in assessing worker classification: the amount of skill required for a job; how permanent a working relationship is; and whether the work is part of an integrated unit of production. Notably, the proposed regulations would minimize the importance of the terms of contracts between employers and workers in determining worker classification.

This revised “economic realities” test would likely allow more employers – including some nonprofits – to classify their workers as contractors to avoid paying benefits and payroll taxes. It is unclear whether the DOL will make further changes to worker classification rules under the Biden Administration.
Center Releases 2021 Public Policy Agenda for North Carolina’s Nonprofit Sector
Last month, the Center released 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.
Governor Cooper (Again) Extends Executive Order on Nonprofit Membership Meetings
Last Thursday, Governor Cooper issued Executive Order No. 185, which extends by 60 days four previous executive orders (Executive Order No. 136, Executive Order No. 149, Executive Order No. 161, and Executive Order No. 173) allowing nonprofits with members to hold membership meetings remotely during the COVID-19 crisis. The order gives boards the flexibility to allow membership meetings to take place by remote communication and through remote voting, even if these types of remote meetings are not expressly authorized in the nonprofit’s articles of incorporation or bylaws. The Center advocated for Governor Cooper to issue the original executive order and to extend it. We are appreciative that Governor Cooper has provided this relief to nonprofits since it will help some organizations continue to take actions that require membership approval during the COVID-19 crisis.

The Center plans to seek legislation this year to change the NC Nonprofit Corporation Act to allow nonprofits to conduct membership meetings remotely, even after the end of the pandemic.
Governor Cooper Extends Phase 3 of Reopening by Three Weeks
On Wednesday, Governor Cooper issued Executive Order No. 188, which extends Phase 3 of the reopening of North Carolina’s economy by three weeks, through January 29. The executive order also extends existing curfews (between 10 p.m. and 5 a.m.) and face covering mandates through January 29.
Final 2020 Lobbying Reports Due by January 25
Nonprofits that were registered as lobbyist principals in 2020 (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 January 25, 2021. Lobbyist principals need to use the special fourth quarter expense reports (now 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 2021. 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.
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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.