CARES Act Offers Relief for Nonprofits Amid Coronavirus Crisis

CapitolThe Coronavirus Aid Relief and Economic Security (CARES) Act was passed by the U.S. House of Representatives on Friday and signed into law later in the day by the President.

Nonprofits across America have hailed the legislation, which includes more than $2 trillion to help individuals, schools, businesses, nonprofits, churches, and others affected by the coronavirus (COVID-19) pandemic.

“On behalf of our association’s members, I thank our elected officials for their efforts in putting together this emergency aid package, which is so very needed at this unprecedented time in our nation’s history,” said Troy Miller, CEO of NRB, the nation’s pre-eminent association of Christian broadcasters and communicators.

“The stimulus Act has provided one bright spot in the midst of the shadow being cast over ministries and faith-based organizations that are being economically crippled by COVID-19,” added Craig Parshall, NRB’s General Counsel. “For 2020, the usual limitations for charitable donations applicable to itemized deduction federal tax filers have been eased. Hopefully donors, as they petition the Great Physician for continued health and protection, will also remember to support even more vigorously Christian ministries that continue to labor diligently and fearlessly for the Kingdom during this season of contagion.”

Among the highlights of the nearly 900-page legislation are the following (for nonprofits):

  • Emergency Small Business 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. Nonprofits are also eligible for expedited loans of up to $1 million.
  • 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 with 500 or fewer employees can get checks for $10,000 within three days.
  • Self-Funded Nonprofits and Unemployment: Reimburses self-funded nonprofits for half of the costs of benefits provided to their laid-off employees.
  • Charitable Giving Incentive for Donors: Includes a one-time, above-the-line deduction for cash contributions of up to $300 made to certain qualifying charities.
  • 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 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.
  • 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. Notably, employers receiving emergency SBA 7(a) loans would not be eligible for these credits.

Other takeaways from the CARES Act:

  • Direct Payments to Individuals: Provides $1,200 to Americans making $75,000 or less ($150,000 in the case of joint returns and $112,500 for head of household) and $500 for each child, to be paid “as rapidly as possible.”
  • Expanded Unemployment Insurance: Expands eligibility for unemployment insurance and provides people with an additional $600 per week on top of the unemployment amount determined by each state.

For more details on the legislation, as it relates to nonprofits, click here for an initial analysis from the National Council of Nonprofits.

For a more comprehensive summary of the CARES Act from the National Law Review, click here.

For Focus on the Family’s interview with U.S. Senate Majority Leader Mitch McConnell (R-Ky.) regarding the CARES Act, click here.

For other resources from the CDC for community- and faith-based leaders, click here.

For COVID-19 insights and resources from members of NRB, click here

By NRB Staff

Published: March 27, 2020

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