September 10, 2021
In this issue...
Learn the latest on new (and some not-so-new) nonprofit compliance issues
White House establishes COVID-19 vaccination requirement for some nonprofit workers
NC House and NC Senate make progress on state budget negotiations 
Make your voice heard on state spending priorities
Learn about local government ARP funding for nonprofits
NC Senate approves nonprofit remote meeting legislation
Governor Cooper vetoes donor privacy legislation 
Nonprofits can help maximize participation in 2021 municipal elections
Legislators seek public input on redistricting process
NC Senate approves bill that could create precedent of limiting nonprofit independence
Learn the Latest on New (and Some Not-So-New) Nonprofit Compliance Issues
To help your nonprofit keep up with ever-changing federal and state laws and regulations affecting nonprofits, the Center is offering a half-day Nonprofit Legal Compliance Workshop next Wednesday, September 15. The workshop will include an overview of basic legal and accounting compliance issues for 501(c)(3) nonprofits and provide in-depth sessions on topics including COVID-19 legal considerations (e.g. vaccination requirements and returning to in-person operations), nonprofit accounting trends, insurance basics for nonprofits, board governance, and creative fundraising considerations. During the final hour of the workshop, presenters will provide insights (and perhaps even a few answers) to any questions that participants may have about legal or accounting issues for nonprofits.

As an added bonus, participants will get a sneak preview of the Center’s popular 2021 Legal Compliance Checklist. And as an even bigger added bonus for some, participants who are attorneys will receive four hours of continuing legal education credit. Register today.
White House Establishes COVID-19 Vaccination Requirement for Some Nonprofit Workers
Yesterday, President Joe Biden issued an executive order requiring all federal contractors and subcontractors – including nonprofits that contract with the federal government – to be vaccinated for COVID-19. The executive order only applies to nonprofits that are federal contractors or subcontractors, not those that receive federal grants. President Biden also announced yesterday that:
  1. He is directing the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) to issue an emergency regulation requiring employers with more than 100 employees – including many large nonprofits – to require their employees to be vaccinated for COVID-19 or to be tested at least once a week;
  2. OHSA is also developing a regulation requiring employers with more than 100 employees to provide paid time off for workers to get vaccinated or recover from vaccinations; and
  3. The Centers for Medicare & Medicaid Services (CMS) will require workers in most Medicaid and Medicare reimbursed health care facilities, including hospitals, to be vaccinated for COVID-19. Many North Carolina hospitals already require their employees to be vaccinated for COVID-19.

With these new federal requirements, more nonprofits are asking whether they can or should require their staff to get vaccinations. To answer the first question: It is legal for nonprofits to require their employees be vaccinated. To help with the second question, the Center posted an analysis of pros and cons of nonprofit vaccination requirements (spoiler alert: the pros probably outweigh the cons for most nonprofits). We have also included tips for your organization to implement an employee vaccination requirement in a way that is fair and effective and that minimizes potential liability for your nonprofit.
NC House and NC Senate Make Progress on State Budget Negotiations
This week, a conference committee of members of the NC Senate and NC House of Representatives continued negotiating a final version of the state budget for FY2021-23 (S.105). Leaders in both chambers indicated this week that they have made progress on agreements on some of the bigger issues in the budget, including tax cuts and total capital spending. Negotiators are now trying to find common ground on dozens of differences between the budget approved by the Senate in June and the version the House passed last month. Legislators hope to approve a final version of the budget later this month so they can send it to Governor Cooper for his consideration.

Both chambers’ budgets included significant new funding for nonprofits (about $701 million in the House budget, and about $300 million in the Senate budget), and a variety of other provisions that would affect the work of some or all charitable nonprofits in North Carolina. To help your nonprofit understand the differences between the two versions of the budget, the Center has prepared a chart comparing various appropriations and provisions affecting nonprofits in the House-approved budget and the Senate-approved version.

The Center continues to advocate with legislators and the Governor’s Office to include favorable nonprofit provisions in the final version of the budget. Specifically, the Center is asking that the final budget include:
  1. The Senate’s JOBS grant program, which would provide automatic grants to nonprofits that received Paycheck Protection Program loans and other forms of COVID-19 economic relief. Based on our analysis of PPP data, the Center estimates that nonprofits would receive about $40 million in JOBS grants, but that nonprofits would receive no benefits from the House’s alternative proposal to provide tax deductibility for PPP loan amounts for businesses.
  2. A provision to allow counties and municipalities to invest some of their American Rescue Plan Act (ARP) funding in grants to nonprofits and economic assistance to nonprofits. The ARP and U.S. Treasury Department guidance for implementing the ARP clearly allows local governments to use funds for grants or aid to nonprofits, but the Center has heard from local governments with concerns that existing state law limits their ability to provide economic assistance to nonprofits and to make some grants to nonprofits to provide services that would benefit communities. 
  3. Provisions to allow North Carolinians to use temporary heightened incentives for charitable giving on their state taxes in 2021 by conforming to federal tax laws. The Senate budget includes these charitable giving incentives, which would likely increase donations to North Carolina nonprofits this year.
  4. Requirements that certain state agencies report on late payments or late contracts with nonprofits that provide public services through state grants and contracts. The Center has recently heard from several nonprofits about problems with late contracts and late payments on state grants. Having state agencies report on these late contracts and late payments could be a first step in identifying the source of these delays and developing solutions.
Make Your Voice Heard on State Spending Priorities
With legislators negotiating the details of the final state budget, now is a great time to find your state House and Senate members and call them to let them know what types of state funding would help your organization and your community. Before you get started, take a few minutes to read a new blog post from friend of the Center Lisa Hazirjian with tips on how to call your elected officials with confidence – complete with an easy-to-use worksheet to ensure that your call is effective and relatively stress-free.
Learn about Local Government ARP Funding for Nonprofits
Last week, the Center offered a free webinar on ways that local governments across North Carolina can partner with nonprofits to use ARP funds to assist communities in their continued recovery from the COVID-19 pandemic. The webinar includes information from the NC Pandemic Recovery Office as well as insights on nonprofit-local government partnerships from a county official, NC Child, and the Center. If you missed the webinar, check out the recording and materials that were shared during the presentations.
NC Senate Approves Nonprofit Remote Meeting Legislation
On Wednesday, the NC Senate unanimously approved a bill (H.B 320) that would make several changes to the NC Nonprofit Corporation Act to make it easier for nonprofits with members to conduct meetings remotely and for nonprofit board members to use email to take action by unanimous written consent. Under current law, nonprofits with members must conduct meetings in person, and nonprofits need board approval (typically in a provision in the nonprofit’s bylaws) to use email or other means of electronic communication for unanimous written consent votes of boards. The bill would enable nonprofits to hold membership meetings remotely and would create a default rule that nonprofit boards can use email to take action by unanimous consent outside of a meeting.

The proposed changes are based on recommendations from the Center, thanks to input we received from nonprofits during the COVID-19 pandemic. The Center is appreciative of Senator Amy Galey (R-Alamance) for her leadership on this bill and for working with the Center and other nonprofits on legislative language that will be helpful for a wide range of nonprofit organizations.

The House approved a slightly different version of the bill in March, so it will need to vote on the bill one more time before sending it to Governor Cooper for his consideration.
Governor Cooper Vetoes Donor Privacy Legislation
Last Friday, Governor Cooper vetoed a bill (S.636) designed to create limits on the disclosure of donors to nonprofits. Governor Cooper vetoed the bill because it “is unnecessary and may limit transparency with political contributions.” The bill essentially would have done two things:
  1. Prohibit nonprofits from disclosing “the identity of any person donating monies or other tangible goods to the nonprofit corporation” if a donor notifies the nonprofit that they would like their identity kept confidential. There is an exception for disclosures required by law, court order, or criminal investigations. 
  2. Prohibit state officials from providing Schedule B of nonprofits’ Forms 990 or 990-EZ (that is the attachment that includes donor information) in public records requests. This is consistent with federal tax law, which makes Schedule B donor information confidential.

The original version of the bill included a problematic provision that would have limited the ability of many nonprofits to acknowledge individual and corporate donors at events, on their websites, and in annual reports and other publications. The Center worked with the bill sponsor and organizations advocating for the bill to remove this provision from the final version.
Nonprofits Can Help Maximize Participation in 2021 Municipal Elections
With dozens of cities and towns around North Carolina holding municipal elections this fall, now is a great time for nonprofits to help ensure that their staff, volunteers, and the people they serve are registered to vote and show up during Early Voting or on Election Day. Voter turnout is typically much lower in years when there are no national or statewide races on the ballot, so it is particularly important for nonprofits to promote the 2021 election (if there is one in the municipality where you provide services). Here are three easy (and nonpartisan) steps your nonprofit can take today:
  1. Check on what municipal elections are coming up in October or November in the regions you serve by searching the NC State Board of Elections 2021 Municipal Voter Tool
  2. Sign on as a partner for National Voter Registration Day on September 28. As a partner, your organization will receive tools and messaging you can use to promote voter registration.
  3. Check out the local elections resources from You Can Vote to learn more about what’s on your ballot, messaging for nonpartisan voter engagement, and ways you can get involved.
Legislators Seek Public Input on Redistricting Process
This fall, state legislators must draw congressional and state legislative districts for elections between 2022 and 2030. As part of this redistricting process, the NC Senate and NC House of Representatives redistricting committees are holding a series of 13 public hearings around the state this month. These hearings are a good way for nonprofits to provide input on ways legislators can develop districts that provide fair representation for the communities they serve. If you can’t make it to one of the public hearings but would like to provide input on the redistricting process, you can also submit comments online.
NC Senate Approves Bill That Could Create Precedent of Limiting Nonprofit Independence
On Wednesday, the NC Senate gave final approval to a bill (H.B. 91) that would impose strict governance and operations requirements on the nonprofit organization that administers interscholastic high school athletic activities in North Carolina. Specifically, the bill would require the nonprofit to agree to a unilateral memorandum of understanding that:
  1. Sets standards for how the nonprofit’s board is selected;
  2. Requires the nonprofit to subject itself to state open meeting laws and public records laws;
  3. Regulates the way the nonprofit contracts with schools and other entities; and
  4. Places several limits on the nonprofit’s fundraising ability.

As part of its policy agenda to support and strengthen North Carolina’s nonprofit sector, the Center opposes government policies that limit nonprofits’ governance as independent, nongovernmental corporations with control over their own organizational policies and practices. The Center is concerned that this legislation would create a precedent of the state limiting the ability of a nonprofit organization to operate as an independent organization. Because the Senate made changes to the bill, the House must approve it one more time before it goes to Governor Cooper for his consideration.
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.