Non-Profits Get Limited Relief in Stimulus Deal
President Trump may not sign the bill, but even if he does, the $900-billion stimulus package approved by Congress in response to the pandemic provides only limited relief for the nation’s charities.
The COVID-19 Relief Bill and Consolidated Appropriations Act of 2021 funds appropriations for the federal government, includes COVID relief and extends expiring tax provisions. Among the provisions included in the more than 5,000-page bill are an extension of the Universal Charitable Deduction (UCD) through 2021, and another round of Paycheck Protection Program (PPP) funding through March that now includes association.
The legislation allocates $15 billion nationally to “Save Our Stages,” dedicated to relief for Broadway, music venues and other cultural institutions, like museums and zoos. Revenue declines must be at least 25 percent compared to 2019 to be eligible with no more than $10 million for each organization that intends to reopen.
The Charitable Giving Coalition (CGC) applauded the inclusion of an extended temporary universal charitable deduction (UCD) in year-end relief legislation and plans to work with lawmakers to enhance it in the 117th Congress.
Extended through 2021 will be the $300 universal charitable deduction for non-itemizers—$600 for joint filers—and the temporary AGI (Adjusted Gross Income) limit increase on itemized charitable deductions for cash gifts, which was increased from 60 percent to 100 percent in the CARES Act. Current limits that would be extended are 100 percent of AGI for individuals and 25 percent of taxable income for corporations.
“We look forward to working with lawmakers in both the House and Senate to reintroduce legislation to create a permanent universal charitable deduction next Congress,” CGC Chairman Brian Flahaven, who is senior director for advocacy at the Council for Advancement and Support of Education (CASE), said in a statement. “We made great strides to restore giving this year with the temporary universal charitable deduction, and the increase in donations under $250 shows it’s working.”
For some nonprofit leaders, Congress still hasn’t done enough—now nine months into a pandemic—and there’s a push for more in the new Congressional session. “This relief bill is a critical temporary measure, but it fails to do enough to protect the nation’s charitable nonprofits—the organizations that tens of millions of Americans have been relying on for essential supports such as shelter, food, mental health services, and childcare,” National Council of Nonprofits President and CEO Tim Delaney said.
“Nonprofits can nod appreciation for the positive direction of some aspects,” he said, noting the extension of the Universal Charitable Deduction through 2021, extending the 50-percent coverage of unemployment costs for reimbursing employers until mid-March, and partial eligibility for another round of PPP funding. However, PPP eligibility is even more limited than the first round in the spring, denying medium and large nonprofits any relief, Delaney said. “The failure to provide full relief for unemployment costs will leave nonprofits with massive bills forcing them to lay off even more workers,” he said.
“Congress and the Administration have failed the American people by not acting early enough or doing enough. It took far too long to pass a bill that does not do enough for our communities,” Delaney said, calling on Congress to pass more comprehensive relief immediately upon returning to Washington in 2021.
The measure includes $284 billion for another round of PPP, which would be extended through March for first and second loans for small businesses and nonprofits. To be eligible for a second PPP loan, recipients would be required to demonstrate a 25-percent reduction in gross receipts in any quarter of 2020 compared to the same quarter in 2019. The bill also simplifies the forgiveness process for loans of $150,000 or less.
Associations are now eligible too, with restrictions: 300 or fewer employees, 15 percent of less lobbying activities and receipts, and less than $1 million in spending for lobbying activities.
“This year-end relief package qualifies as progress,” ASAE President and CEO Susan Robertson, CAE, said in a statement. “However, there are many deserving associations that will find themselves still unable to qualify for PPP loans as a result of the conditions set in this bill,” she said. “No legitimate, well-purposed association should be left in the cold simply because they exercise their First Amendment rights to advocate on behalf of the industries or professions they represent.”
ASAE “opposed vigorously” the $1-million restriction and “remains hopeful” that Congress will expand PPP eligibility conditions further in the next Congress, according to a statement. Legislative priorities will include passage of the Pandemic Risk Insurance Act (PRIA), which would help protect associations and others from business interruption losses resulting from future pandemics or public health emergencies, and the Investing in Tomorrow’s Workforce Act, which would expand the use of “529” education savings accounts to cover the costs of professional certification and credentialing programs provided by associations.
The COVID-19 Relief Bill gives “small business a fighting chance to recover from this global crisis and contribute to the economic stability our nation needs,” AICPA President and CEO Barry Melancon, CPA, CGMA, said in a statement, noting that the organization has advocated for expense deductibility for PPP loan recipients.
Individuals making up to $75,000 would receive another direct payment of $600—$1,200 for couples making up to $150,000—and an extra $600 per eligible dependent. The bill includes a retroactive provision to the CARES Act expanding direct payments to mixed-status households.
Unemployment benefits would be enhanced at $300 per week, from Dec. 26 through March 14, and the Pandemic Unemployment Assistance (PUA) program and Pandemic Emergency Unemployment Compensation (PEUC) program also would be extended to March with three-week phase-outs.
A nationwide eviction moratorium would be extended by one month, through January, while the first-ever emergency federal rental assistance program run by the Treasury Department and administered by local and state governments would provide $25 billion in funding for “targeted assistance” to renters impacted by the pandemic.
This article originally appeared in The Non-Profit Times. It is reprinted with permission.