LAWS & RULES

FPLG COVID-19 RESPONSE

LAWS & RULES

[UPDATE: June 30, 2020]

The three and a half months or so of the COVID-19 pandemic have put a magnifying glass on the capabilities of our national government as well as state and local governments around the nation to carry out the usual functions as well as respond quickly and efficiently to a crisis of unprecedented proportions. During this period, the concept of federalism has been put under a microscope as well.

It’s an open secret that the federal level has performed poorly while many – though not all – states, counties, and local governments have risen to the occasion. But even at this sub-federal level, there has been some confusion and tension between the state governors and local authorities. This is understandable, perhaps, given the cataclysmic course of the pandemic, including the disappointing resurgences of the disease even in states like California that had led in aggressive and early lock-down measures.

All aspects of our economy – including the large and important nonprofit sector – have been dependent on the federal government for quick action to authorize huge infusions of financial relief. Despite having authorized early and fairly generous aid packages, the U.S. Congress has regressed into a partisan stalemate over the amount and timing of additional assistance. In May, the House passed the HEROES Act, but it has stalled in the Senate.

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[UPDATE: May 3, 2020]

In April, a fourth Congressional bill was passed and signed into law to add to the pot of money available to help the nation through COVID-19, which was huge but not nearly enough to cover the enormous need. Legislators are already at work on a fifth bill. The nonprofit community along with sympathetic federal legislators are trying to achieve a dedicated track of funding for our sector.

State governments are also stepping up in a big way, including through regional coalitions to coordinate strategy and achieve greater pooled purchasing power.

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[April 1, 2020]

Now, more than at any time in many decades, the government – at all levels – will play a key role in our lives. There are, and will continue to be, different laws and rules as well as conflicting messages. The system of federalism – which allocates authority and power between the federal government and the states – will be tested as never before.

Yet at the same time that the nonprofit sector (along with all other elements in our society) is dealing with restrictions, we will need the government’s financial largesse. The CARES Act, enacted on March 26, 2020, is the largest-ever infusion of money into the economy in United States history. But this $2 trillion stimulus law is “not nearly enough”, and “private giving can’t possibly make up for the huge increases in demand [for nonprofit services] expected.”

Contact FPLG (619) 780.3839

The federal government must … step up. In May, the US House of Representatives passed the HEROES Act, which sets aside $500 billion to the states, enough to cover the shortfall and then some. But that has gone nowhere. It is common to assume that, eventually, Congress will relent, and the states will get—if not $500 billion, at least something more than the $150 billion that state and local government received in the CARES Act this past March. But, alas, more federal support is far from certain.

— Steve Dubb, NPQ (6/30/20)

Nine in 10 charitable organizations have been negatively affected by the COVID-19 epidemic, and leaders at one-third believe they will have to shut down within the next 12 months, …. More than half expressed an ‘urgent need’ for funding to cover keep-the-lights-on expenses ….

— The Nonprofit Times (6/15/20)

With millions of jobs and the economic recovery at stake, the seven leading organizations representing state, territorial and local governments called on Congress to approve an aid package that would sustain vital services to Americans during the COVID-19 pandemic.

Nat’l Governors Assn. 5/20/20)

As the federal government struggles to execute on time and at scale with the core elements of the CARES stimulus bill, states have to execute their own large-scale responses for unemployed residents and vulnerable, if not already shuttered, businesses. Where do nonprofits fit in governors’ and state legislatures’ calculus of who needs what, and how urgently?

— Jeanne Bell, Steve Dubb, The Nonprofit Quarterly (4/7/20)

REFERENCES & RESOURCES

GO TO – Federal legislation

Remote-Work Costs: Must Nonprofit Reimburse?

[June 5, 2020] Among the many adjustments that employers - including nonprofits - have had to make during the COVID-19 pandemic is the abrupt switch to remote work for some or all of their employees. That includes making sure that everyone in the workforce has needed hardware, software, and internet and phone connectivity.  California is among the jurisdictions that initiated early and mandatory stay-at-home orders for a large portion of the population and economy. There [...]

Filing Deadlines Extended for Nonprofit Organizations

[April 24, 2020] By the third week of March 2020, governments at all levels had begun to respond to the many questions and issues raised by the COVID-19 emergency, including - most notably - the curtailment or suspension of operations and activities by individuals and entities on account of new stay-at-home orders  and recommendations.  The necessary federal emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Act was made in mid-March. The [...]

UPDATE: The CARES Act and Nonprofits

[March 27, 2020] The third prong of the Congressional response to the COVID-19 pandemic - the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 747) - is now before the House of Representatives, having passed the Senate on Wednesday. The House is expected to approve it today with overwhelming support; voting is expected to begin shortly.  It could be signed at the White House and in effect before the end of this weekend. [...]

Some Good News: Funders are Stepping Up

Ten days ago, we posted Funders Must Step Up - Right Now! (March 16, 2020).   That same morning, influential blogger Vu Le had posted Funders, this is the rainy day you have been saving up for. Mr. Le has long been a vocal critic of many foundations’ viewing the five percent payout figure in the tax code as a ceiling instead of what it is: a floor.  During that week, as most of us were [...]

Nonprofit Board Meetings in an Emergency

The devastating pandemic has brought sudden and profound challenges for all of us.  In What Nonprofit Board Members Should Be Doing Right Now to Address the COVID-19 Situation, (March 16, 2020), the experts from BoardSource write:  “As the world responds to the threats of COVID-19, many nonprofits and their boards are wrestling with difficult questions and decisions.”  A rewrite of that sentence may be in order; every nonprofit and its board is flying blind in [...]

The Charitable Sector: COVID-19 Relief and Economic Stimulus Package

America's charities request $60 billion infusion of support to help the most vulnerable March 18, 2020 The COVID-19 (Coronavirus) pandemic facing the country is having a profound impact on the economy and has greatly expanded the need for charitable organizations to provide additional services in an unprecedented manner. At the same time, the economic downturn will undoubtedly result in a contraction in contributions and other sources of revenue which are the lifeblood of many charitable [...]

Coronavirus and Nonprofits: Challenges & Resources

What a difference a week makes. Last week, the news media focused on the minutiae of the primary-election horse race. This week, Americans have been forced to confront the coronavirus (COVID-19) pandemic. For the nonprofit sector, the emergency becomes a double-barreled crisis: we are both victims and saviors. This is not an unfamiliar conundrum; there are frequent natural disasters that devastate one area or another. This nation’s charitable organizations - and, in particular, the social [...]

Funders Must Step Up – Right Now!

“Funders,” writes nonprofit blogger Vu Le, “this is the rainy day you have been saving up for.”  Recently, we wrote about Mr. Le’s earlier plea for America’s foundations to step up their payouts beyond the “five percent rule” in the federal tax code. In an article last summer, he characterized it as a moral imperative: The ethical argument for foundations to increase their annual payout rate beyond 5% (August 4, 2019). This morning, it’s a [...]

Small Business Association Disaster Loan Guidance and Resources

The U.S. Small Business Administration (SBA) has an existing program, the Economic Injury Disaster Loan program, that extends disaster relief loans to small businesses, including nonprofits, to help alleviate economic injury caused by disasters.  On Thursday, March 12, 2020, the SBA announced that the program will be available to claims arising from COVID-19.  The SBA will work with state officials to offer loans of up to $2 million.  “These loans may be used to pay [...]