COVID-19’s Lasting Effects on Nonprofits – Relief Programs

This article is the first in a series that will look at the pandemic’s lasting impact on nonprofit organizations. View the full series here. Read on to learn about several of the government programs enacted to provide financial relief to nonprofits affected by the pandemic.

During the last year and a half, the federal government took several unprecedented steps to slow worsening economic conditions created by the pandemic. The first major action, the CARES Act, was passed during the height of pandemic-related lockdowns in March 2020. One of the keystones of that legislation was the Paycheck Protection Program (PPP), which authorized the U.S. Treasury to fund forgivable loans of up to $10 million per borrower through the SBA so that qualified entities could cover their payroll, mortgage interest, rent and utility costs. Congress was also showed concern specifically for nonprofits when they included provisions that raised the limits on deductible charitable contributions of cash for individuals who itemize, allowed a temporary $300 above-the-line deduction to individuals who do not itemize and raised the cap on deductible charitable contributions of cash by corporations.

The American Rescue Plan Act of 2021 made many large nonprofit organizations eligible to apply for PPP loans for the first time. The legislation also provided new or extended employment-related programs (such as the Employee Retention Credit) and allocated federal funding for many programs championed by nonprofits, such as childcare, arts and humanities, food assistance and services for the homeless.

In the final days of 2020, Congress also passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. This legislation established the Shuttered Venue Operators Grant program, which includes $15 billion to be used for grants to qualified venues such as museums, performing arts centers, zoos and aquariums. Eligible organizations may be able to qualify for grants up to 45% of their gross earned revenue up to $10 million.

Schreiber Accounting and Advisory has experience working with nonprofit organizations of all sizes on financial statement services, Form 990 preparation and management advisory services. If your organization needs the assistance of a qualified CPA firm, contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.