A $1.9 trillion stimulus package passed by the House early Saturday morning would make some large nonprofits eligible for Paycheck Protection Program forgivable loans, according to an analysis of the legislation by the National Council of Nonprofits.
Under a stimulus bill enacted in March 2020, nonprofits with 500 or fewer employees were eligible for forgivable Paycheck Protection Program loans of up to $10 million.
The bill passed by the House Saturday would expand that eligibility to nonprofits that operate at multiple locations as long as no more than 500 employees work at any single location. The bill also would remove the “affiliation rule,” which made some nonprofits ineligible for PPP loans if they are affiliates of national organizations.
A stimulus bill enacted in December created a second round of Paycheck Protection Program loans for nonprofits and businesses with up to 300 employees; eligibility for that second round of loans would not change under the new House bill.
The House stimulus bill also would extend and expand help for nonprofits that self-insure unemployment benefits. Under previous stimulus legislation, the federal government covered half the costs of benefits provided to their laid-off employees. The new House bill would expand the reimbursement rate to 75 percent through August 29.
No Giving Incentives
The bill omits one key provision sought by nonprofits; an extension of the charitable tax break for people who don’t itemize their taxes. A temporary provision that allows single people to deduct up to $300 and couples to deduct up to $600 in charitable gifts even if they don’t itemize is currently due to expire after the 2021 tax year.
The bill includes $350 billion for state and local governments, territories and tribes, according to the Washington Post.
Nonprofit advocates say those funds are crucial because they would prevent cash-starved states and local governments from delaying or cutting payments to charities that have service contracts with them.
The bill would also provide a new round of stimulus checks — $1,400 for individuals and $2,800 for married couples, subject to certain income limits. Those stimulus checks could reduce immediate demands on food banks and other providers of basic necessities, and could spark a wave of donations from people who don’t need the extra help, if the experience of past stimulus checks holds.
The bill also would provide an extra $400 per week in unemployment benefits through August 29.
Sandra Swirski, a partner at Urban Swirski & Associates who works with nonprofit leaders, praised the House bill for providing some relief to charities, but said the legislation was “ultimately disappointing” because it didn’t extend the charitable deduction for taxpayers who don’t itemize. She noted that previous legislation providing the temporary deduction for those taxpayers was effective in boosting giving.
The legislation could face changes in the Senate, where Democrats hold only a one-vote margin.
