Updated on May 15 at 9:45 p.m.
The House on Friday passed a $3 trillion stimulus bill with a broad range of provisions beneficial to nonprofits. However, President Trump and Republicans who lead the Senate have shown no interest in the legislation.
According to an initial analysis by the National Council of Nonprofits, the new House bill made the Paycheck Protection Program, created in a previous stimulus bill, more generous by:
- Removing the 500 employee cap on the size of nonprofits eligible for PPP loans, including social-welfare organizations, unions, and trade associations.
- Removing a Small Business Administration limit on nonpayroll expenses eligible for loan forgiveness.
- Deferring principal and interest payments on PPP loans for one year, up from six month.
- Extending the covered period for loans from June 30 to December 31.
- Creating a 25 percent “set-aside” for PPP funding for nonprofits. Half of that set-aside would be for nonprofits with 500 or fewer employees, and the other half for nonprofits with more than 500 employees.
- Clarifying that critical-access hospitals and nonprofit news outlets are eligible for PPP loans.
- Requiring that the Small Business Administration provide reports on loan approvals and disbursements to nonprofits.
David Thompson, vice president for public policy at the council, praised the bill, saying it “would create a nonprofit track to ensure that frontline organizations receive the forgivable loans they need to provide essential services and put newly unemployed people back to work.”
However, the bill doesn’t include an expansion of the temporary “above the line” deduction that was created in the previous stimulus bill.
Other Provisions
The measure also:
- Mandates that nonprofits be eligible for the Main Street Lending Program and that the loans may be forgiven for nonprofits ineligible for a PPP loan and predominantly serving low-income communities.
- Increases the value of the employee-retention tax credit from 50 percent of $10,000 to a maximum of 80 percent of $15,000 per quarter. That effectively would raise the maximum value of the credit from $5,000 per employee to $36,000. The bill also would clarify that health-care costs are covered even if wages are not paid during the period.
- Provides a 50 percent refundable payroll tax credit for qualified fixed costs including rent, mortgage, and utility payments. The provision is limited to employers with 1,500 or fewer employees or gross receipts of no more than $41.5 million in 2019.
- Allows nonprofits receiving Paycheck Protection Program loan forgiveness to delay payment of the employer portion of 2020 payroll taxes. The payments would be due in equal halves at the end of 2021 and 2022.
- Extends mandated paid-leave provisions under a previous stimulus bill to nonprofits and other employers with more than 500 employees.
- Reverses a U.S. Labor Department rule that applies to certain nonprofits and other organizations that self-insure claims for unemployment benefits. The rule tells states to bill those employers immediately for 100 percent of the costs of unemployment benefits paid to employees. Nonprofits must then wait for their 50 percent reimbursement allowed under previous stimulus legislation.
(The Chronicle of Higher Education, the organization that publishes the Chronicle of Philanthropy, has received a loan under the Paycheck Protection Program.)
