Last night, the Senate passed the CARES Act with a vote of 96-0. We expect the House of Representatives to vote tomorrow, and it is our hope that the bill will be signed into the law by tomorrow or Saturday.
The Alliance, in partnership with you and our strategic coalitions, has been working aggresively around the clock to push a bold package of much-needed relief that recognizes the impact on human services nonprofits and the vital role you play in your communities.
We used our collective power as a strategic action network to build grassroots pressure on Congress in virtually every state across the country. Your responsiveness to our requests for mobilization meant that highly targeted emails with our message to your members of Congress were streaming into the inboxes of Senate staff in a final bid to push our objectives!
Thanks to you, together we achieved the important victories we needed for our sector! Highlights include:
- Small Business Administration (SBA) 7a Loans and Loan Forgiveness for Nonprofit Organizations 500 Employees or Less. Provides funding for special emergency loans of up to $10 million for eligible nonprofits to cover payroll, operations, debt services, etc. Loans can be forgiven, in whole, for organizations that maintain employment from March 1-June 30, essentially turning the loan into a grant. Loans can cover payroll and associated costs, health insurance premiums, facilities costs, and debt service.
- Loans Disbursed through Any Government-Backed Lender. An application through SBA is not necessary. Any major lenders should be able to start making loans within one to two weeks of final passage of the bill. Stay tuned for more details and start talking to your government-backed lender now about how to get ready.
- Medicaid Exclusion Successfully Removed. For the past week, we've been working to remove a dangerous provision to the small business loan program that would have prohibited any nonprofit that receives or is eligible for Medicaid reimbursement from getting access to these critical loans. After an uphill battle, this provision has been removed. If left in place, this would have barred most of our sector from accessing critical capital during a difficult time.
- Access to SBA Economic Injury Disaster Loans (EIDL): Available Now. These grants are available now, and the CARES bill dumps more money into them. They go directly through the SBA in any area that has a declared disaster (the entire U.S. is covered by that right now). Nonprofits and other eligible applicants can get checks for $10,000 within three days (and eventually up to $2 million in loans). The CARES Act eliminates creditworthiness requirements and appropriates an additional $10 billion into the program. Most likely, organizations cannot participate in both EIDL and SBA 7a and will have to choose one or the other.
- Access to Loans for Nonprofit Organizations of 500 Employees or More. A new loan relief package for mid-size nonprofits was created that would provide loans with a two percent interest rate to organizations with 500-10,000 employees. The funds received must be used to retain at least 90 percent of the recipient’s workforce, with full compensation and benefits, through Sept 30, 2020. The loans would not accrue interest or require any payments for the first six months.
- New Charitable Giving Incentive. To bolster charitable giving in a time of economic downturn, we secured a $300 above-the-line tax deduction for charitable giving, eligible to both itemizers and non-itemizers alike. This is not a permanent provision and will expire at the end of tax year 2020. It is our hope that this will spur more charitable giving in your communities in 2020, to make up for lost revenue and we will continue to advocate for making a universal tax deduction permanent.
- New Employee Retention Payroll Tax Credit. Creates a refundable payroll tax credit of up to $5,000 for each employee on the payroll when certain conditions are met. Entity needs to prove it has realized a drop in revenue of at least 50 percent in the first quarter of 2020 compared to first quarter 2019. Note that employers receiving emergency SBA 7a loans will NOT be eligible for these tax credits.
- Appropriations for Key Programs. There are numerous other important funding streams that will be critical to the communities you serve. The two summaries below break down some of the other important funding streams and policy improvements that will help our communities move through this economic and public health challenge. Some highlights include: $15.5 billion in additional funding for SNAP; $3.5 billion for the Child Care Development Block Grant to help maintain critical operations in child care programs; $750 million for Head Start; $1 billion for Community Services Block Grants; $45 million for the Family Violence Prevention Services; and much more. Many key health provisions were included as well.
- Direct Payments to Adults & Families. Adults making $99,000 or less will be eligible for direct payments of $1,200 or less and $500 per child ($3,400 for a family of four), to be sent out in the coming weeks. The amount of payments phases out based on earnings between $75,000 and $99,000.
- Changes to New Paid Sick Leave Mandates. Lowers the amount that employers must pay for paid sick and family leave under the Families First Coronavirus Response Act that was enacted last week to the amounts covered by the refundable payroll tax credit (i.e. $511 per day for sick leave or $200 per day for family leave).
Join us for a webinar Monday, March 30 from 1-2 p.m. CT, where we’ll discuss what was included in the bill, share more resources, and answer questions.
The Alliance will share additional insights into the latest relief package on our website later today. Follow us on Twitter, Facebook, and LinkedIn and sign up for our e-newsletters to stay up to date.
Thank you for remaining steadfast and focused on your missions, staff, and communities during this rapidly unfolding crisis. If there is anything we can do to support you, don’t hesitate to let us know and stay tuned for updates on upcoming COVID-19 webinars and ongoing policy updates.
Contact lana Levinson, Alliance senior director of government relations with any questions.