How Did Nonprofits Fare in Latest COVID Relief Package?

The National Council of Nonprofits held a webinar on the Consolidated Appropriations Act on January 13, 20201. Watch the recording and view the slides for more details.

Just before the turn of the year–and eight months after the CARES Act was signed into law–Congress passed a new Emergency COVID relief and Omnibus bill (The Consolidated Appropriations Act), which the president signed into law on December 27. We are particularly grateful to our Maine delegation for their consistent support of nonprofits and clear recognition of the critical role they play in the economy, safety net, and social fabric of our state.

Throughout the year, MANP, our delegation, and hundreds of partner organizations in the state and nationally advocated for nonprofit inclusion in federal COVID-19 relief efforts. For months, MANP has made recommendations for this latest phase of COVID-19 legislation that would help support the nonprofit sector. The information below outlines how our recommendations fared in the $900 billion relief package. We thank our delegation and our tireless national umbrella, the National Council of Nonprofits, for their robust analysis of the COVID relief bill and provisions impacting nonprofits that helped support this analysis. 

Coronavirus Relief Fund

MANP recommended Congress extend the Coronavirus Relief Fund (CRF) deadline from 12/30/2020 to late next year. The new legislation extends the deadline for states to spend CRF monies through 12/31/2021. 

Paycheck Protection Program

MANP recommended Congress enable nonprofits with more than 500 staff to participate in the Paycheck Protection Program (PPP) for the first time and include nonprofits in a second round of PPP loans. The legislation includes:

1. PPP second draw loans for nonprofit employers with 300 or fewer employees that demonstrate at least a 25% reduction in gross revenues between the same quarters in 2020 and 2019. The maximum loan amount is $2 million.
2. PPP forgivable expenses are expanded to include personal protective equipment, covered supplier costs, facilities modifications, and covered worker protection expenditures. (Section 304)
3. 501(c)(6) nonprofits, but not 501(c)(3), with more than 500 employees are now eligible for PPP loans.

Unemployment Insurance Reimbursement for Self-Insured Nonprofits

MANP recommended Congress provide 100% coverage of unemployment costs of reimbursing nonprofits and extend the relief into 2021. The legislation extends the 50% federal coverage of the costs of self-insured “reimbursable” employers through 3/14/2021. 

Employee Retention Tax Credit (ERTC)

MANP recommended Congress extend and expand the Employee Retention Tax Credit that expires on 12/31/2020. The legislation:

1. Extends the ERTC through 7/1/2021 and improves the refundable payroll tax credit by reducing the amount of required year-over-year decline in gross receipts from 50% to 20%, while increasing the credit from 50% to 70% of workers’ “creditable wages” of up to $10,000 for each of two quarters, for a maximum per worker benefit of $14,000.
2. Expands full benefit to all employees of employers with 500 or fewer employees; larger employers can apply the credit only to workers who are paid but are not working.
3. Provides that employers who receive PPP loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds. 

Charitable Giving Deduction 

MANP recommended Congress include improvements to the above-the-line charitable deduction in S. 4032/H.R. 7324 (from June 2020) in the COVID relief bill and extend the giving incentive to 2021. The legislation reestablishes the $300 above-the-line deduction for 2021 and permits a $600 deduction for couples filing jointly in 2021, and extends for one year the increased limits on deductible charitable contributions for individuals who itemize and for corporations. 

Unemployment Insurance Reimbursement for Self-Insured Nonprofits

MANP recommended Congress provide 100% coverage of unemployment costs of reimbursing nonprofits and extend the relief into 2021. The legislation extends the 50% federal 1 coverage of the costs of self-insured “reimbursable” employers through 3/14/2021.

1. Under the CARES Act, employers who self-insure will only receive 50% reimbursement for their unemployment insurance claims, unless the State of Maine provides an additional 50%. Before COVID-19, many nonprofits may have chosen to self-insure as the most prudent unemployment insurance option, however during this time of crisis we need to support our nonprofit workers.
2. The expanded “above the line” giving by $300 for 2020 does not go far enough to encourage charitable giving for organizations heavily dependent on individual donors. Following the 2008 recession, charitable giving dropped by $42 billion nationally (See: Stanford Center on Poverty and Inequality and the Russell Sage Foundation, 2012. Charitable Giving and the Great Recession).

Funding for Maine’s Budget Deficit

MANP urged Congress to include funding for state and local government. The legislation includes an estimated $13 billion for states through the Education Stabilization Fund, Emergency Transit and aid to Departments of Transportation, relief for airports to operate safely during the pandemic, COVID Health and Vaccine Efforts, Rent and Eviction Relief, Emergency Childcare Grants, FEMA Disaster Relief Fund and Broadband Connectivity. 

Additionally, MANP is pleased Congress allocated $15 billion nationally to “Save Our Stages” dedicated to relief for performing arts and other cultural institutions.

MANP thanks Senator Collins, Senator King, Congresswoman Pingree, Congressman Golden, Congresswoman, and their dedicated staff people for working closely with MANP and nonprofits over the past several months to identify and champion policy solutions that support all Mainers. 

Contact: Sarah Woodard, Advocacy & Public Affairs Director, swoodard@nonprofitmaine.org.