September 24, 2021
In this issue...
New law allows nonprofits to hold membership meetings remotely  
NC House and NC Senate finishing negotiations on state budget 
U.S. House approves continuing resolution to avert federal government shutdown
Federal government shutdown could affect nonprofits
New federal requirements push more nonprofits to consider COVID-19 vaccination policies
Next Tuesday is National Voter Registration Day
Nonprofits can help maximize participation in 2021 municipal elections
North Carolina to end waiver of penalties for employment tax filing noncompliance
New Law Allows Nonprofits to Hold Membership Meetings Remotely
On Monday, Governor Roy Cooper signed into law a bill (H.B 320) that makes 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. The bill, which took effect on Monday, enables nonprofits with members to hold membership meetings remotely and creates a default rule that nonprofit boards can use email to take action by unanimous consent outside of a meeting. The Center has prepared an analysis of the new law to help your nonprofit better understand the new rules for electronic board votes and remote membership meetings.

These modernizing changes to the NC Nonprofit Corporation Act are based on recommendations from the Center, thanks to input we received from nonprofits during the COVID-19 pandemic. The Center appreciates Representative Destin Hall (R-Caldwell) and Senator Amy Galey (R-Alamance) for working with nonprofits to improve the laws on nonprofit member meetings and nonprofit board electronic voting.
NC House and NC Senate Finishing Negotiations on State Budget
The NC Senate and NC House of Representatives are finalizing negotiations on the state budget for FY2021-23 (S.105). Legislators hope to share their version of the budget with Governor Cooper next week and then negotiate with him on final spending and provisions before voting on it in the coming weeks.

Both chambers’ budgets included significant new funding for nonprofits (about $709 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 updated its 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 (PPP) 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 implementing the ARP clearly allow 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.
U.S. House Approves Continuing Resolution to Avert Federal Government Shutdown
On Tuesday, the U.S. House of Representatives approved a continuing budget resolution that would fund the federal government through December 3. The continuing resolution also would extend the national debt limit into December 2022 (to prevent the United States from defaulting on its current debt) and provide $28.6 billion in disaster aid for victims of recent hurricanes and $6.3 billion to help Afghan allies and partners settle in the United States. The House passed the continuing resolution along partisan lines, and it is unlikely to have the bipartisan support needed to pass the Senate before the end of the federal fiscal year next Thursday. Congress could consider other versions of continuing budget resolutions (possibly not extending the national debt limit) in the next week to try to prevent a partial shutdown of the federal government next Friday.
Federal Government Shutdown Could Affect Nonprofits
If Congress and the White House are unable to reach an agreement on a continued resolution by next Thursday, parts of the federal government will be forced to shut down. In the past, federal government shutdowns – including the five-week shutdown in December 2018 and January 2019 – have affected nonprofits in several ways:
  1. Nonprofits with federal grants or contracts may not be paid on time for the services they deliver. For example, in January 2019, some North Carolina domestic violence agencies struggled to keep their doors open when their Violence Against Women Act funding became unavailable. 
  2. Some clients of nonprofits may not be able to access federal benefits such as food assistance and rental assistance. As a result, direct service nonprofits may be called upon to provide more services without receiving increased compensation. For instance, in 2019, North Carolina provided Supplemental Nutrition Assistance Program (SNAP or food stamps) benefits a month early to ensure that recipients didn’t lose out on benefits due to the government shutdown. As a result, nonprofits had to provide guidance to their clients on how to budget two months of food benefits so they didn’t run out of food toward the end of the benefit period.
  3. If the Internal Revenue Service is closed, nonprofits may have difficulty filing their 990s online or receiving compliance assistance.

Typically, the burdens of a government shutdown worsen the longer the federal government is closed.
New Federal Requirements Push More Nonprofits to Consider COVID-19 Vaccination Policies
Earlier this month, 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. To answer a question many nonprofits have been asking: the executive order only applies to nonprofits that are federal contractors or subcontractors, not those that receive federal grants.

In additional, two federal agencies are developing regulations that will require more nonprofit employees to be vaccinated for COVID-19:
  1. The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) will soon issue an emergency rule requiring employers with more than 100 employees – including many large nonprofits – to: (a) require their employees to be vaccinated for COVID-19 or to be tested at least once a week; and (b) provide paid time off for workers to get vaccinated or recovery from vaccinations; and
  2. The Centers for Medicare & Medicaid Services (CMS) will soon issue a rule requiring workers in most Medicaid and Medicare reimbursed health care facilities, including hospitals, to be vaccinated for COVID-19. 

The Center will provide more details on the OSHA and CMS regulations once the regulations have been published. 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 to be vaccinated. To help with the second question, the Center posted an analysis of pros and cons of nonprofit vaccination requirements (spoiler: 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. To protect its employees and the community and to serve as an example for other nonprofits, the Center has adopted a policy requiring its employees to be vaccinated for COVID-19.
Next Tuesday is National Voter Registration Day
National Voter Registration Day is next Tuesday, September 28. It’s not too late for your nonprofit to sign on as a partner and receive free online tools and messaging tips. For more ways your nonprofit can help ensure your staff, volunteers, and clients are registered to vote, check out the North Carolina voter drive resources from National Voter Registration Day. 
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 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 two 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. 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.
North Carolina to End Waiver of Penalties for Employment Tax Filing Noncompliance
Last month, the NC Department of Revenue announced that it will end its policy of waiving penalties for employers – including nonprofits – that fail to file Form NC-3 (annual withholding reconciliation), along with the state’s copy of W-2 or 1099 statements electronically. Beginning on January 1, 2022, nonprofits that don’t file these employment tax forms electronically will be fined $200 penalties. The NC Department of Revenue has developed a resource page to help nonprofits and businesses comply with employment tax filing requirements.
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.