CARE Act for Nonprofits
Nonprofits, take note: the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (H.R. 748) has unanimously passed in the Senate and is expected to pass in the House on Friday. This $2 trillion bill is historic in scope and amount but is a welcome bit of sunshine breaking through the clouds. While the news cycle is hyping the corporate side of the stimulus, nonprofits are getting help too. Here is an overview of the information in the CARES act that is important for nonprofits.
Eligible nonprofits are guaranteed emergency loans (SBA 7(a) loans) which will be 100% covered by the federal government. Loans must be made through federally insured banking organizations. These loans must be taken out between February 15, 2020 and June 30, 2020 and be used to cover payroll related expenses; this includes wage, medical / family leave, healthcare / retirement benefits, and others. To be eligible for coverage under this act, nonprofits must have 500 or fewer employees. Loan amounts go all the way up to $10 million.
Donor Incentives
There is also an incentive for donors making contributions. Beginning in 2020, up to $300 of charitable contributions made may be above the line deducted.
The following sections of the act that are most pertinent to this post are:
- Loan Forgiveness (Title I, Sec. 1106)
- The Paycheck Protection Program (Title I, Sec. 1102)
- Allowance of Partial Above the Line Deduction for Charitable Giving (Title 2, Sec. 2204) Loan Forgiveness (Title I, Sec. 1106)
Other Avenues for Funding
Nonprofits should head over to the U.S. Small Business Administration disaster loan assistance webpage for updates as this situation evolves. The site has many resources in one place for loan assistance. This includes Economic Injury Disaster Loans (EIDL) that your organization can take advantage of if you do not qualify for the CARES Act stimulus.
