November 13, 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...
2020 Legal Compliance Checklist now available!
What does the 2020 election mean for nonprofits?
Governor Cooper extends Phase 3 of North Carolina’s COVID-19 reopening 
Nonprofits continue to advocate for Congress to approve additional COVID-19 relief
Executive order limiting race and gender equity trainings scheduled to take effect on November 21
Congress aims to approve federal appropriations by December 11
Reminder: Many nonprofits eligible for MURR grants 
New OMB guidance now in effect 
2020 Legal Compliance Checklist Now Available!
The Center released its 2020 Legal Compliance Checklist today. Updated annually, the checklist is a comprehensive resource that outlines a wide variety of federal and state laws that affect North Carolina nonprofits’ governance, finances, advocacy, human resources, and fundraising. This year’s edition includes details on legal issues related to COVID-19, new state tax laws, and changes to employment laws. 

If your nonprofit is a member of the Center, you can download the checklist as part of membership. If your nonprofit is not currently a member of the Center, you can either purchase a copy of the checklist or join the Center to get access.
What Does the 2020 Election Mean for Nonprofits?
With North Carolina finalizing its count of absentee ballots and provisional ballots this week, you may be wondering what the results of the 2020 results mean for North Carolina nonprofits. To help answer your questions, the Center has posted an updated analysis of the nonprofit implications of the election results.

The Center is also offering a free webinar on Friday, November 20 at 11 a.m. on the 2020 election and nonprofits. The webinar will include:
  • Highlights of election results and what they mean for nonprofits;
  • Prospects for policy solutions (and potential challenges) for the nonprofit sector at the state and federal level in 2021; and
  • What to expect on major policy issues in 2021 and beyond. 

Governor Cooper Extends Phase 3 of North Carolina’s COVID-19 Reopening
On Tuesday, Governor Roy Cooper issued Executive Order No. 176, extending Phase 3 of the re-opening of North Carolina’s economy through December 4, despite the recent surge in COVID-19 cases and hospitalizations in the state. Some notable provisions in the Governor’s Phase 3 executive order for nonprofits include:

  • Mass gatherings of up to 10 people indoors and up to 50 people outdoors are permitted. The indoor mass gathering limit is down from the 25-person limit that had been in effect for the past several weeks. 
  • Meeting and conference facilities can reopen for seated meetings with adequate social distancing at a maximum capacity of the lesser of 100 people or 30% of fire code capacity.
  • Most outdoor entertainment venues can reopen at 30% of capacity for seated events with social distancing measures in place, and large outdoor entertainment venues that seat 10,000 or more people can reopen at 7% of capacity for seated events.
  • Museums and aquariums – many of which are nonprofits – may remain open at 50% of their capacity. Even with the 10-person limit on indoor mass gatherings, museums and aquariums may still allow up to 25 people per room or in tour groups.
  • Gyms and indoor exercise facilities may remain open at 30% of their capacity.
  • Childcare providers, day camps, and overnight camps may remain open, but they must follow NC Department of Health and Human Service guidelines, screen individuals every day, and immediately isolate sick service providers, counselors, or children. 
  • Parks, trails, and swimming pools may remain open with safety precautions in place.
  • Retail stores (such as nonprofit thrift stores) may remain open at 50% of their fire code capacity.
  • All employers in North Carolina – including nonprofits – are still required to make a good-faith effort to provide face coverings for their employees. The Executive Order calls for employers to provide either a weekly supply of re-usable face coverings or a daily supply of disposable face coverings for their employees.

One simple way that nonprofits can help minimize the further spread of COVID-19 is to encourage their staff, volunteers, and the people they serve to follow guidelines on wearing masks in public. The Centers for Disease Control and Prevention reported on Tuesday that a 15% increase in mask wearing could prevent $1 trillion in additional economic losses from the pandemic.
Nonprofits Continue to Advocate for Congress to Approve Additional COVID-19 Relief
The U.S. Senate returned to Washington this week, and the U.S. House of Representatives returns next week. With congressional elections mostly decided, there is now a renewed opportunity for House and Senate leaders to negotiate much-needed additional COVID-19 relief. The Center and other nonprofits continue to advocate for Congress to act as quickly as possible to pass meaningful relief for nonprofits, individuals, businesses, and communities. Specifically, nonprofits are asking Congress to:

  • Improve the Paycheck Protection Program (PPP). Many nonprofits would greatly benefit from a second round of forgivable PPP loans and simplification of the loan forgiveness process for borrowers.
  • Strengthen the Universal Charitable Deduction. The CARES Act capped the temporary universal charitable deduction at $300 per taxpayer and only allows taxpayers to use this in 2020. The Center and other nonprofits continue to ask Congress to make meaningful improvements to the universal charitable deduction by significantly increasing the cap and extending it through 2021.
  • Extend Unemployment Insurance (UI) Relief. The CARES Act only provides federal funds to cover 50% of self-insured nonprofits’ COVID-related UI costs (the state is covering the other 50% of these costs for self-insured nonprofits in North Carolina). Nonprofits are asking Congress to cover the other 50% and to extend this UI relief into 2021. Nonprofits are also seeking extension of the Pandemic Unemployment Assistance program – which provides UI benefits to self-employed individuals and laid-off or furloughed workers at small and religious nonprofits that are exempt from UI requirements – and restoration of the $600 per week supplemental UI benefits for most laid-off or furloughed workers.
  • Expand the Employee Retention Tax Credit (ERTC). The CARES Act created the ERTC as a refundable tax credit for nonprofits and businesses that maintained their employees during the pandemic. Relatively few nonprofits have used the ERTC, since employers that received PPP loans were ineligible for this tax credit. It is quite possible, however, that Congress could strengthen the ERTC by significantly increasing the amount of the credit for each employee and by allowing nonprofits to use both the PPP and the ERTC for different periods. This could provide significant new relief for many nonprofits that have sustained financial losses during the pandemic.
  • Provide Additional Aid for State and Local Governments. Nonprofits are asking Congress to provide more federal support 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. Thus far, the House has supported more funding for state and local governments, but the Senate has opposed it.
  • Appropriate Federal Dollars to Help Nonprofits and Communities. Discussions around additional relief have included proposals for a wide range of appropriations, including increased funding for the Supplemental Nutrition Assistance Program (SNAP), food banks, arts and humanities nonprofits, domestic violence organizations, legal services nonprofits, hospitals, mental health service providers, and the Community Development Block Grant.

We will let you know if there is a need for your nonprofit to take action.
Executive Order Limiting Race and Gender Equity Trainings Scheduled to Take Effect on November 21
President Donald Trump’s recent executive order limiting workplace trainings on equity, diversity, and inclusion is scheduled to take effect next Saturday, November 21. The executive order limits the ability of federal contractors and grantees to use workplace training “that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” The executive order covers most trainings that include topics like race equity, gender equity, implicit bias, or systemic racism. Specifically, the executive order:
  1. Requires federal agencies to add provisions to contracts prohibiting contractors from offering these types of workplace trainings; and
  2. Allows federal agencies to prohibit grantees from using federal funds on these types of workplace trainings. Federal agencies are required to provide reports on how this will affect their grantees by November 21.

While this executive order is clearly troubling for organizations with federal grants and contracts, now is not the time for nonprofits to panic. Nonprofit grantees and contractors have two reasons for optimism that the impact of the executive order will only be temporary:
  1. At least two lawsuits have been filed challenging the constitutionality of the executive order. It is possible that federal courts could temporarily stop the implementation of the executive order before it goes into effect on November 21.
  2. There is a good chance that the Biden administration will rescind the executive order, perhaps as soon as January 20, 2021.
Congress Aims to Approve Federal Appropriations by December 11
On Tuesday, the U.S. Senate released its 12 appropriations bills to fund the federal government for the fiscal year that began on October 1. The U.S. House of Representatives has already approved 10 of its 12 appropriations bills for the current fiscal year. The House and Senate plan to work together to finalize a federal budget by December 11 when the current continuing budget resolution expires.
Reminder: Many Nonprofits Eligible for MURR Grants
Certain nonprofits that were closed due to COVID-19 are now eligible for grants through the Mortgage, Utility and Rent Relief (MURR) Program. Eligible organizations include museums, concert hall operators, live theater operators, performing arts center operators, indoor fitness and recreational sports facilities, aquariums, zoos, wild animal parks, and botanical gardens. Grants are available to eligible organizations with 50 or fewer employees per location that were closed between April 2020 and July 2020 due to COVID-19. Grants are available up to $20,000 per facility (for a total of $40,000 for an organization with two or more facilities).

Originally, these grants were only open to for-profit businesses, but the Center successfully advocated for the Department of Commerce to change the eligibility requirements to allow nonprofits to receive grants. The Department of Commerce is issuing grants to eligible organizations on a first-come, first-served basis, so the Center encourages eligible nonprofits to apply immediately. For more information, check out the recording of the Center’s recent webinar with the NC Department of Commerce.
New OMB Guidance Now in Effect
The federal Office of Management and Budget (OMB) final guidance on amendments to the Guidance for Grants and Agreements (OMB Uniform Guidance) took effect yesterday. The OMB Uniform Guidance is a set of rules that apply to nonprofits with federal grants. The changes to the OMB Uniform Guidance include increased ability for agencies to terminate federal awards, clarification of the de minimis indirect cost rate that nonprofits can adopt, and public disclosure of negotiated indirect cost rates. The Venable law firm has prepared a good analysis of the changes to the OMB Uniform Guidance.
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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.