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March 28, 2020Federal CARES Act for Nonprofits – Pandemic Stimulus
Federal CARES Act for Nonprofits skips pleasantries and goes straight to explaining how particular provisions in new coronavirus-related federal legislation may be beneficial to the work of most charitable nonprofits, sector-wide. Other provisions in the bill may help charitable nonprofits operating in certain subsectors (e.g., arts, education, hospitals), but this article does not address those.
Federal CARES Act for Nonprofits (Coronavirus Aid, Relief, and Economic Security Act)
Last night, the actual legislative language of the $2 trillion coronavirus relief bill finally emerged, and within hours the Senate passed the CARES Act bill unanimously. As of this writing, the House is expected to vote on Friday, and the president has not signed it, so it is not law yet. But given the overwhelming need to get protections and relief in place immediately, everyone expects that the CARES Act bill will be the law of the land within days.
Emergency Support for Small to Mid-sized Nonprofits (500 Employees or Fewer)
The bill creates a new Emergency Small Business Loan program within the SBA 7(a) loan program. To be eligible, nonprofits or for-profits must have been in existence on March 1, 2020 or earlier and have 500 or fewer employees. An important provision: under this new program, loans are forgivable if the nonprofit or for-profit keeps staff on the payroll between March 1 and June 30. This, in essence, turns the loan into a general operating support grant. Forgivable loans of this type can be taken out for as much as $10 million and can be used to meet payroll and associated costs (including health insurance premiums), facilities costs, and debt service.
Further good news: A provision in earlier drafts that would have disqualified nonprofits that are eligible for Medicaid payments was removed from the bill.
Loan Support for Larger Entities with 500–10,000 Employees
The stimulus bill also calls for the creation of a loan and loan guarantee program via a new Industry Stabilization Fund specifically targeting “mid-size” organizations, defined as having between 500 and 10,000 employees.
This provision, unlike the emergency SBA loan program, does not provide loan forgiveness, but does mandate an interest rate of no higher than two percent and would not accrue interest or require repayments for the first six months. Nonprofits accepting the mid-size business loans must retain or rehire at least 90 percent of their staff at full compensation.
Support for Nonprofits of Any Size
The SBA currently has Economic Injury Disaster Loans (EIDL). The existing program provides loans of up to $2 million at an interest rate of 2.75 percent for nonprofits. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
But we’re hearing reports from the field about conflicting messages from SBA offices.
The relief bill would change the EIDL to eliminate creditworthiness requirements and eligible nonprofits with 500 employees or fewer are supposed to be able to get checks for $10,000 within three days.
Benefits for Donors
As NPQ board member Gene Takagi details, the stimulus bill also contains a one-time, above-the-line deduction for cash contributions of up to $300 made to certain qualifying charities. All taxpayers would be eligible to take the deduction, even people who use the standard deduction. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. The new deduction would not apply to non-cash gifts or to gifts contributed to donor advised funds.
For the eight percent of individual taxpayers who itemize their deductions, the bill would suspend for 2020 the normal limit on deductions for contributions, ordinarily 50 percent of adjusted gross income (AGI) or 60 percent for cash. For corporations, the limit on deductions for contributions, ordinarily 10 percent of AGI, is elevated to 25 percent for 2020. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap.
Next Steps
Now that you’ve overlaid your facts on the new options above, take a step back and pause. Those are the general outlines of three new federal programs. There are no federal rules, regulations, guidelines, or application forms yet for most of these. No one has been trained on the federal side. Plus, some of the programs will require states to take certain actions. And our network of state associations of nonprofits, listening to and working with their members in various states are learning about different challenges with existing programs, let alone any new ones this bill would create.
As a network, our state association leaders are exchanging information across state lines. We’re seeing emerging challenges, comparing ideas of potential solutions, and troubleshooting.
There can be no doubt that the mounting health and economic challenges ahead will require increasing policy work at all levels and branches of governments. The only way we can possibly succeed is to come together in this time of social distancing. None of us can do it alone. Neither as individuals nor as organizations. We need to unite to share information, insights, and inspiration.
And if you’re a grantmaker and you’ve not yet invested in the state association of nonprofits in your state, then do so to protect your grantees with the safety net of a network proactively working together solving problems rather than trying to stand alone. Step forward to provide nonprofits with a fighting chance by way providing meaningful resources to be true advocates. So many of the challenges ahead will be addressed in policy arenas, where the voices of nonprofits must be heard, for the common good.
Federal CARES Act for Nonprofits – How the COVID-19 Economic Stimulus Bill Would Affect Charities
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 748)
Congressional and Administration negotiators reached agreement on the Phase 3 COVID-19 economic stimulus bill early Wednesday morning and just released the legislative text this hour. The Senate and House hope to pass the $2 trillion legislation as quickly as possible.
What’s in the Federal CARES Act for Nonprofits
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 748) provides significant funding for businesses, hospitals, schools, and social support programs, among many other things. Below are key nonprofit issues of sector-wide interest on which advocates have been most active. These are based on an initial analysis of the nearly 900-page bill. More details may become apparent with more thorough analysis.
Emergency Small Business Loans (emergency SBA 7(a) loans): Provides funding for special emergency loans of up to $10 million for eligible nonprofits and small businesses, permitting them to cover costs of payroll, operations, and debt service, and provides that the loans be forgiven in whole or in part under certain circumstances. Title I, Section 1102.
- General Eligibility: Available to entities that existed on March 1, 2020 and had paid employees.
- Nonprofit Eligibility: Available for charitable nonprofits with 500 or fewer employees (counting each individual – full time or part time and not FTEs). The final bill does not include a provision in earlier drafts that would have disqualified nonprofits that are eligible for payments under Title XIX of the Social Security Act (Medicaid).
- Loan Use: Loan funds could be used to make payroll and associated costs, including health insurance premiums, facilities costs, and debt service.
- Loan Forgiveness: Employers that maintain employment between March 1 and June 30 would be eligible to have their loans forgiven, essentially turning the loan into a grant. Section 1106.
Economic Injury Disaster Loans (EIDL): Eliminates creditworthiness requirements and appropriates an additional $10 billion to the EIDL program so that eligible nonprofits and other applicants can get checks for $10,000 within three days. Section 1110.
Charitable Giving Incentive: Includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. Section 2204. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap. Section 2205.
Self-Funded Nonprofits and Unemployment: Only reimburses self-funded nonprofits for half of the costs of benefits provided to their laid-off employees. Section 2103.
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. The entity had to be an ongoing concern at the beginning of 2020 and had seen a drop in revenue of at least 50 percent in the first quarter compared to the first quarter of 2019. The availability of the credit would continue each quarter until the organization’s revenue exceeds 80 percent of the same quarter in 2019. For tax-exempt organizations, the entity’s whole operations must be taken into account when determining the decline in revenues. Notably, employers receiving emergency SBA 7(a) loans would not be eligible for these credits. Section 2301.
Industry Stabilization Fund: Creates a loan and loan guarantee program for industries like airlines to keep them solvent through the crisis. It sets aside $425 billion for “eligible business” which is defined as “a United States business that has not otherwise received economic relief in the form of loans or loan guarantees provided under” the legislation. It is expected, but unclear, whether charitable nonprofits qualify under that definition for industry stabilization loans. Mid-sized businesses, including nonprofits, that have between 500 and 10,000 employees are expressly eligible for loans under this provision. Although there is no loan forgiveness provision in this section, the mid-size business loans would be charged an interest rate of no higher than two percent and would not accrue interest or require repayments for the first six months. Nonprofits accepting the mid-size business loans must retain at least 90 percent of their staff at full compensation. Section 4003.
Other Significant Provisions
Direct Payments to adults of $1,200 or less and $500 per child ($3,400 for a family of four) to be sent out in weeks. The amount of the payments phases out based on earnings of between $75,000 and $99,000 ($150,000 / $198,000 for couples).
Expanded Unemployment Insurance: Includes coverage for workers who are furloughed, gig workers, and freelancers. Increases payments by $600 per week for four months on top of what state unemployment programs pay.
Amendments to the New Paid Leave Mandates: Lowers the amounts that employers must pay for paid sick and family leave under the Families First Coronavirus Response Act (enacted March 19) to the amounts covered by the refundable payroll tax credit – i.e., $511 per day for employee sick leave or $200 per day for family leave.
Significant Spending: The bill also calls for large infusions of cash to the following sectors:
- $150 billion for a state, tribal, and local Coronavirus Relief fund
- $130 billion for hospitals
- $30 billion for education
- $25 billion for transit systems
Federal CARES Act for Nonprofits – Pandemic Stimulus Package was originally posted at Nonprofit Quarterly and was written by Tim Delaney of the National Council of Nonprofits.
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69 Comments
Hope to get all the help we can find. Our work has been greatly hindered. Contributions and donations have dropped already.
Please keep us informed
Trying to find out if this would cover volunteer ambulance companies with no paid personnel, 100% volunteer for a $10,000.00 loan to cover costs associated with the COVID19 virus?
Donald, according to our understanding of the bill, GRANTS will be made available for utilities, rents and salaries. LOANS will be made available for all other reasonable expenses needed to keep your doors open. Loans will have reasonable interest rates and need to be paid back within five years.
Will this apply for small churches? We are in the middle of building our first facility and have taken out a $350,000 loan. The giving since the start of the coronavirus has dropped significantly. If it continues we’re not sure how we will continue because we meet in our local high school and have little in reserve. Thanks for info on advance.
Donald
We are a nonprofit organization in California completely volunteer basis do we qualify for any financial help for rent utilities and such that does not have to be paid backok
I run a non profit I don’t pay taxes I am a 501c 3.i help the homeless, I pay out of pocket to whomever helps when needed. I am the CEO but because I am the CEO of a non profit they say im not eligible for the stimulus. Not even as an individual person. Isn’t there someway I can get help?
Will non profits who have no paid employees yet have utilities and rent receive funding…
Gwendolyn, it is our understanding that the answer to your question is yes. You will be able to receive funding for utilities and rent ultimately as a grant. Initially, you will apply for a loan. However, if you demonstrate that you spent loan monies on utilities or rent those loan monies will be “forgiven” and will not require repayment.
May I also reply to this very same question? We are a 501 c 3 100% voluntary work force crew that has a community clothes closet, we’ve had to close because of all this in our small town, but we still have expenses to cover such as rent, utilities, but no income which came from our clothes sales. How do I apply for this grant? We are in a desperate situation now. We do not want to give up our charity business here which is much needed in this low income/no income retirement community of Clay Co., GA. Help please?
Pam,
Our understanding is that you are eligible for the Emergency Injury Disaster Loan provided by the Small Business Administration. Visit here to learn more: https://covid19relief.sba.gov/#/
Does a 501C3 animal sanctuary have availability for a loan or grant?
Anita,
501c3 animal sanctuaries may apply for both PPP Loans & EIDL Loans or Grants.
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
https://www.sba.gov/disaster-assistance/coronavirus-covid-19
We’re a Non Profit 50-c7, how will this Stimulus Help us? We have Utility Bills & Insurance to pay.
I’m the President of a 501c3 non-profit (a small town Historical Society) who has rental property we own free and clear which we lease out to some small businesses as well as residents at minimal rent to cover our operating costs. My tenants are wanting us to forgive 2-3 months of rent. Do we, as this type of organization, have any way to re-coupe this rent via the stimulus package should we grant rent forgiveness?
Steve, as we understand the bill, you will be able to receive a loan to pay the bills you would normally rely on rental income to pay. HERE’S A POSSIBLE OPTION. Don’t forgive the rent. Keep a running tab on what they owe. They need to apply (whether or not they are for-profit or non-profit businesses) for the emergency funding. As we understand it even for-profit businesses will be “forgiven” any monies they spend on salaries, rent or utilities. When they receive their loan/grant they need to pay you their arrears.
Your thoughts Steve?
Can you explain the Charitable Giving Incentive Below? I am confused by the total of $300 and the lifting the existing cap on annual contributions?
Charitable Giving Incentive: Includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. Section 2204. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap.
Kim,
You may remember the Tax Cuts & Jobs Act of 2018 when the standard deduction amount was raised so significantly that millions of taxpayers opted to take the non-itemizer standard deduction (thereby not reporting their charitable contributions [because they didn’t itemize]). Our understanding of the CARES Act Charitable Giving Incentive is that in 2020 even if you take the standard deduction taxpayers will be able to itemize their charitable contributions up to $300. As to the second part of your question. When a person or itemizes and reports their charitable giving they do not receive a dollar-for-dollar write off e.g. if you itemize $1000 in charitable gifts your actual write off is only $600. From what we can tell the CARES Act will allow a %100 write off. If you give $1000 you will receive a $1000 write off. Regarding corporations, at present corporations can only write-off 10% of their net profits. It looks like the CARES Act will allow them to write-off 25% of their net profits. They are also being provided a cap raise on food donations as well (think of your grocery markets, etc.)
Please watch your inbox for more updates. We’re working with the Small Business Administration to prepare you for next steps.
How do part adjuncts at colleges count for the 500 employee threshold? Is it based on the rational full time eqivancy of adjuncts based on the Spring semester when the pandemic hit or is it based on pure headcount.
Also, I assume that federal work study (FWS) students are not included the 500 employee threshold for Colleges since they are tax exempt and the payroll comes direct from the federal government?
Thanks so much for your help.
Mauricio,
When we have more information we’ll be able to answer the 500 plus/less question. (Stay tuned)
Regarding your second inquiry. The CARES Act excludes Full Time Equivalents(FTEs). I think FWS maybe the same as FTEs.
Please watch your inbox for more updates. We’re working with the Small Business Administration to prepare you for next steps.
Your thoughts?
Gabe thanks for the quick reply. Just one point of clarification, are adjunct faculty counted in the employee count, are they excluded all together or is the full time equivalency used to count the number of employees? Thanks again.
Good Samuel,
Thanks for pressing in on this issue. Frankly we don’t know yet. However, our estimation is…
…Full Time Equivalencies ARE UNPAID.
…Adjunct Faculty ARE PART-TIME.
Only an estimation. If you’ll stay with us we’ll work with the SBA to provide you an accurate answer ASAP.
I am a volunteer worker and made $0 income the last 2 year. I did not file taxes for 2017 and 2018. What can I apply for?
Jose,
Our understanding is that you should meet with your banker to better understand your status for the PPP Loan program. We do know that Independent Contractors may apply for PPP on April 9th.
Hi Gabe
Are Churches Eligible to Apply for this?
Linda,
Our understanding is that churches who are incorporated and file a 990 are eligible and can file an application with their local bank/lender on April 3rd. Furthermore, churches may direct their independent contractors to apply on April 9th for PPP Loans.
Here’s a bit of good news. This morning a new brief was released for faith-based organizations at:
https://www.sba.gov/sites/default/files/2020-04/SBA%20Faith-Based%20FAQ%20Final.pdf
Thank you! We look forward to learning the specific details of the opportunities.
Thank You Dorothy,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits:
https://insidecharity.org/inside-charity-articles/
Dorothy, the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
Our one employee is a contract employee, would this be allowed as an “employee” in the definition and could we ask for that salary assistance?
This is a great question that we think we may have figured it our (but are not completely sure). We know that the PPP Loan amount is going to be calculated based on a nonprofit’s Payroll Records. We also know that the actual individual independent contractor can apply for relief on April 10. We are of the opinion that because independent contractors are repeatedly mentioned that some nonprofits may have perceived that they can request a loan amount that includes both payroll AND independent contractor payments. WE WILL FIND OUT FOR SURE WHEN THE LENDERS KNOW MORE. We have an unconfirmed hunch that the nonprofit’s loan amount will be calculated based on actual payroll ONLY and NOT include monies paid to independent contracts. Our reasoning is based in part on:
#1 CARES Act Bill says loan amounts will be calculated based on last months payroll multiplied by 2.5
#2 PPP Application asks what was the amount of your payroll last month
#3 Financial Lenders are asking for your payroll register and your 940 & 941 payroll tax statements
We are a small 501c3 that provides good and needed supplies to rural senior citizens who are desperately in need. How and where will I know to apply for a loan/assistance? Our main resource of food is not able to help us now and this is quickly turning into an emergency.
We also need funding for other important matters.
Damon,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits:
https://insidecharity.org/inside-charity-articles/
Damon, the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
I am the director of a non-profit art gallery. I am the only employee. I would like to ensure our surviving this current circumstance, should I apply for sba covid relief now or wait?
Lynette,
Our understanding of your question LEADS US TO SAY…YES!
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits:
https://insidecharity.org/inside-charity-articles/
Lynnette, the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
Hello when will this take affect for nonprofits as I am a nonprofit looking to apply for assistance during this pandemic crisis. I would like to be updated on when this will take place thanks in advance stay safe.
Mr. Singh,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits:
https://insidecharity.org/inside-charity-articles/
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
Hello, thank you for the valuable information you all share with us. I do have a question. When/where can we apply for these loans? if the application is up, can you share a link? I did find an application link, but it seems to be for churches as it asks to confirm that the money will be used for Secular Social Service, and that we are not. We are an environmental, education, presentation and protection non-profit.
We are a very small nonprofit with two employees and we were about to hire the third and need too, but this emergency happens and our donations have dropped to almost zero. Please share any information on where to apply.
Juan,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits:
https://insidecharity.org/inside-charity-articles/
Thanks for the article. When will the applications open? What do you think the process for the application will be? Any information on the timeline?
Rob,
Here’s a summary of our nonprofit’s meetings with two major SBA 7(a) approved lenders (well-known banks) to compare their processes and product. Their loan representatives were well-informed and transparent about what’s really happening behind the scenes. Here’s what we learned:
1. Both lenders indicated the U.S. Treasury and Small Business Administration were having difficulty supplying lenders the information/infrastructure needed to get started.
2. Despite the April 3rd open application date neither lender knew the date THEIR INSTITUTION would be begin processing applications.
3. One of the two lenders had a hunch that they would be processing applications on Monday.
4. Both lenders indicated they would only be providing PPP Loans TO EXISTING CUSTOMERS ONLY. (New customers need not apply if they are seeking PPP.)
5. One lender indicated their application process would be PERFORMED BY THE APPLICANT using a custom website portal on their bank’s website.
6. One lender indicated they are gathering customer documentation (see list below) and WOULD USE THEIR STAFF to process each application.
7. They both indicated their competition, BANK OF AMERICA, was only processing loans for nonprofit customers who had PREVIOUSLY ESTABLISHED credit with BOA.
Both lenders provided a LIST OF DOCUMENTS nonprofits will need to organize
1. Completed PPP Loan Application
2. 2019 Form 990 Tax Return (2018 if 2019 is not available)
3. 941 Tax Liability Detail 2019
4. 941 Tax Liability Detail 2020
5. Payroll Register 2019
6. Payroll Register 2020
7. Statement of Activity (P&L) 2019
8. Statement of Activity (P&L) 2020
9. Articles of Incorporation
10. Utility Bills 2020
11, Proof of Employees U.S. Citizenship
Thank you for this forum and the ability to ask detailed questions!
I am the ED of a startup nonprofit in WA state. My Board voted me a salary as a budget line item, but had not started paying it yet (we cancelled our biggest annual fundraiser for March 14). Is that salary amount, even though yet unpaid, eligible for this help?
Also, I work from home, and rent from a homeowner friend. Is that rent amount eligible?
Thank you!
Nancy Balin
Family Jewels Foundation
Concerning local churches, their employees, and loan forgiveness. Loan Forgiveness: Employers that maintain employment between March 1 and June 30 would be eligible to have their loans forgiven, essentially turning the loan into a grant. Section 1106. Does “Would be ELIGIBLE to have their loans forgiven” mean that they would be reimbursed or they might??
Rodney,
Interesting question. Here’s our thought. If you received a PPP loan and spent a portion of it on payroll that portion would be “forgiven” and not require “re-payment.” We don’t believe that the term “reimbursement” is part of the discussion.
We are a 501 (c)(3) cancer charity with no sponsors to speak of,we rely on donations,road blocks,& events that have all been cancelled. We take care of whatever a patients needs may be;co-pays,medications,rent,utility payments,groceries,etc.We have no paid employees,no building,so we can send out more monies to help more patients.We help anyone with any type cancer,so we get hit up quite often,would we qualify for anything to keep helping our patients?
Joey,
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
As a 501c3 Basketball Organization, are our facility rental fees covered under this program?
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
My 501c3 non profit organization is an Animal Rescue. Our primary means of funding this charity is through Charity Gaming which is state regulated. This resource has been shut down due to the Pandemic. Does the Federal CARES Act provide any relief/support for my organzation?
Denise,
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
I am on the board of a FFA Alumni association, we were having a big fundraiser for the building we are building. It had to be cancelled and we now have supplies we can not cancel being delivered with no idea how we will pay. We are an all volunteer group with 501 c3 status would we qualify for grant (not pay back) or only loan? Also do we go to our local bank we have a relationship with or how does that part of the process work if we do qualify??
Dorothy,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits: https://insidecharity.org/inside-charity-articles/
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
Hello. I just received my 501c3 on November 2019 for Germany Tutorial Services. I currently have one employee working with me as we are a small nonprofit business that just developed? What are my options for Cares Act 2020 loan and process? Thank you.
Natasha,
Please visit here for specific updates regarding both EIDL loans and PPP Loans for nonprofits: https://insidecharity.org/inside-charity-articles/
The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) may be your first line of support.
https://www.sba.gov/funding-programs/disaster-assistance
These loans aren’t new. They’ve always been available in the event of disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Because of this declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans.
On another note, we would recommend contacting your local bank about your eligibility for Paycheck Protection Program Loans.
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Also here is the link to the application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Note that it was revised late Thursday night and is different than the earlier sample.
You’ll see the list of eligible institutions at the top of the application form.
We are a 501C3 non profit that have built a 50×100 facility for youth development. The total cost was $455k we are paying it off at 10k a month but donations have dried up at this point. Can we apply for the non profit stimulus money to help during this time period? We members of the board are totally voluntary and there are no running costs just pay off cost. What can we expect?
Herb,
Our understanding is that the PPP Loan program uses payroll to calculate loan amounts. It may be hard to receive PPP relief funding without payroll. However, there is the Economic Injury Disaster Loan Program that does not seem to rely on payroll.
Visit here to learn more: https://covid19relief.sba.gov/#/
Hello Jimmy, we are a 501c3 organization that provides soccer travel for children in our community, we provide financial assistance to families that can’t afford the program. we are are all volunteers, we don’t pay salaries to anyone, however we do have obligations for field maintenance, referee fees, league fees. We are located in a blue-collar area, the 200 families we provide the service to are going through a rough patch during the pandemic. Do we qualify to receive any financial help? are we obligated to repay any of the money back? If we can’t find any funding we may have to stop a program that has provided a safe environment for children from 10 to 18 years old since 2003.
Looking forward to your answer
Thank you for your help
Carlos,
Our understanding is that the PPP Loan program uses payroll to calculate loan amounts. It may be hard to receive PPP relief funding without payroll. However, there is the Economic Injury Disaster Loan Program that does not seem to rely on Payroll.
Visit here to learn more: https://covid19relief.sba.gov/#/
My sister is 5 months pregnant, works at a daycare and has been officially laid off. Today, the manager of the daycare said they have received this loan for their church and all employees must return to work Monday. If they do not they will be forfeiting their job and therefore they “quit” and in such case they will not be able to draw unemployment. Does any of this sound correct to you? Generally speaking….
Lacy,
We’re very hesitant to comment on an issue like this. Here’s an interesting perspective. It is our understanding many States are allowing small businesses to “lay-off” employees and will not be required to match unemployment costs. Essentially during this time of emergency Unemployment Insurance fees will be waived. On another note, if your sister lives in a right-to-work State it’s the employer’s prerogative as to the hours and days an employee is required to show up. Tragically, our uninformed opinion is that your question above sounds correct.
Thanks for the helpful information given by Jimmy LaRose in the question and answer section.
Do you know if money obtained from a stimulus loan due to the coronavirus be used to pay off a higher interest church loan that is difficult to pay now due to the pandemic? Thanks for your help!
Desmar,
I’m hesitant to answer your question definitively. It is our understanding that the PPP Loan amount is calculated based on your payroll. It is also our understanding that the loan can be used to pay bills OTHER THAN payroll, utilities, rent or mortgage.
Hello,
Hope all is well with you and your families during these crazy times. I am apart of 2 different non profit 501(c)3.
Gray Strong Foundation just employed 1individual right before the pandemic hit us full force and shut us down, can I claim her contract with us to pay her salary?
The other non profit I am the treasurer for is, Guardians of the Ribbon – Slate Belt Pink Heals Chapter ( PA ), and we pay for parking for our trucks. Can we apply for assistance to pay for the rental agreements?
If yes to both, what is the link to file and do I file separately for both non profits request?
Thank you for your time. Please be safe !!!
Faith,
Our understanding regarding your new employee is “yes” you can apply for a PPP Loan. This process starts with working with your local bank. Our understanding regarding your second question is also “yes” using the Economic Injury Disaster Loan program. However, you will have to wait until next week or so due to the EIDL program being closed because of a lack of funds. Here’s what it says on the EIDL SBA application portal:
“SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding. Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.”
You can visit here to learn more: https://www.sba.gov/disaster-assistance/coronavirus-covid-19
Hi
I’m the treasurer of a (501) C4 local Civic Association and am wondering if there is any financial assistance we can obtain during this pandemic to pay for bills, such as utilities, waste removal, water and mowing while we’re closed?
We have no employees.
If I work for a non profit organization and it closed because of covid-19, should I get paid. Worked part time because of disability, can I file for unemployment?
We have a non profit but don’t have a 501 3c.
We have been in existence since July 13, 2017 and recognized by our state . Are we eligible to be covered under the CARES ACT?
Our entire organization has been impacted by the COVID -19 outbreak.
Any information is appreciated.
Dear Paul,
It is very clear in the CARES Act that you must have your 501c3 letter of determination in order to be eligible for PPP or EIDL.
Warmly, Jimmy LaRose
I am the Interim Executive Director at a 501(c)(3) shelter for women living in homelessness. We did not get ESG from the state in 2019 and it was my understanding the Kansas Recourse Housing Corporation will automatically contact entities that received ESG funds in 2019 when the ESG Care ACT opens. So I want to know how I can find out when it opens and how much can Plumb Place requests? Our ability to provided for the needs of the women has been greatly hindered. Cash Contributions have dropped during the Corona Virus crisis and clothing donations have continued but will not pay the bills.
Hi, we are a small volunteer-led non-profit with no employees in Chicago, Our rooftop heating system was damaged in a tornado several months ago (during the pandemic) and has to be replaced. It is obviously a significant and unanticipated expense, which we cannot afford. I read in prior comments that stimulus money can be used for rent and utilities. Would our needs be eligible under the utilities category? Thank you!
I have a nonprofit with a very small budget, i have a family living in a house owned by my church, I would love apply for funding to help this family; along with others.
How would I apply for funding with a small non-profit?
Thanks Rosetta