June 2020

As many small and mid-sized businesses and nonprofits struggle to keep their doors open during the coronavirus pandemic, legislators scrambled to pass bills designed to offer some relief for cash-strapped organizations and workers. Nonprofits should review each of these acts in full with their human resources director to comply with employment laws and ensure that their organization remains in full compliance with the law.

The COVID-19 CARES Act

The four employment laws listed below were amended or launched as part of the 2020 COVID-19 response. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. It provides various tax credits, loans, and other economic assistance to small businesses, including nonprofit organizations.

Employers must read the complete documentation provided by the government very carefully to see if they qualify for a particular relief act.

Emergency Paid Sick Leave Act and Extended FMLA

The U.S. Department of Labor issued the Emergency Paid Sick Leave Act and extended the Family Medical Leave Act. The act requires employers with fewer than 500 employees to provide paid sick leave and paid family medical leave. This allows workers to stay home, with pay, if they are ill, and to care for a family member who may also be sick. Since workers are asked to stay at home if they are sick or caring for someone with COVID-19, this act takes the financial burden off of workers that force many to keep working despite ill health.

Paycheck Protection Program

The Paycheck Protection Program, managed by the Small Business Administration, provides small businesses with a loan to continue to fund their payroll. The program, part of the CARES Act, helps small businesses keep employees on their books to avoid increasing the number of people filing for unemployment benefits.

The SBA will forgive loans if all employees are kept on the books for eight weeks, and the money is used solely for payroll, utilities, rent, and mortgage interest.

To apply for a loan, owners may go to any SBA 7 location, an approved federally insured depository institution or credit union, or a Farm Credit System institution participating in it.

The loan also applies to faith-based organizations and nonprofits. For more information related to applying for a loan as a faith-based organization, visit the SBA Q & A.

SOCER Tax Deferral

If your organization is having difficulty paying Social Security taxes, the CARES act allows for the SOCER Tax Deferral. Employers may defer payment of their portion of the Social Security Tax until 2021 and 2022. According to the IRS, 50% of the deferred amount is due by December 31, 2021, and the remaining deferred balance is due on December 31, 2022.

For complete details, please see the IRS information on the SOCER Tax Deferral.

Employee Retention Credit

Another part of the CARES Act is the Employee Retention Credit. It is a tax credit given to eligible employers. The refundable tax credit is equal to 50 percent of qualified wages. This program has precise rules about eligibility and qualified wages, so read the IRS documentation carefully to understand the full ramifications of the credit. When the employer’s credit exceeds the available tax liability, the IRS recommends that form 7200 be used to request the additional credit.

Will the CARES Act Continue?

The CARES Act will likely continue to be in place for most of 2020 as the government seeks relief for small and medium-sized businesses. The situation continues to evolve, so watch this blog as well as local business news for any possible changes.

Welter Consulting

If you’d like some help with nonprofit planning, contact Welter Consulting. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Up until March of 2020, most nonprofits probably felt they had everything in control. Sure, some were struggling, which is natural in any field of endeavor. Most established nonprofits had their budgets in place, their marketing and fundraising campaigns thought out for the year and their grant application deadlines on the calendar. After a robust economic upsurge, donation projects seemed optimistic.

And then, the COVID-19 pandemic. Plans were scrapped. Calendars, revised. Staff learned how to telecommute, and nonprofits learned how to do more with even less than they had before. And somewhere in this mix is the lurking thought: can we survive this?

Organizations everywhere are discovering ways to weather the COVID-19 storm. As your organization continues to operate and looks forward to reopening, it’s time to focus on ways to re-establish your organization once the green light is given by the authorities to resume business as usual (albeit with a mask and plenty of hand sanitizer.)

3 Steps to Organize Your Nonprofit for Re-Opening

1. Prepare your action plan: What steps will you need to take before, during, and after reopening? If you’ve been keeping in close contact with your leadership team during the pandemic, you’ll already have plenty of ideas for prioritizing the organization’s needs during the reopening. Consider convening a conference call or video call now with your organization’s leadership team to talk through a vision of what the organization will look like during and after reopening. Consider adding the following questions to the meeting agenda:
   • How will you prioritize programs and services?
   • When will you resume in-person events and activities?
   • Will specific precautions be needed if you resume in-person activities?
   • Do you need to review insurance plans to make sure they cover problems due to COVID-19?
   • Will you continue to allow telecommuting after the pandemic ends?
   • What is the organization’s current financial status?
   • Do you need to change fundraising activities, programs, or plans?
   • These are just a few questions to spark the discussion. Give thought to all areas of the organization, including programs and services, grants and fundraising, marketing, human resources, accounting, and finance. What will each need? What changes are necessary for a smooth reopening and the continuation of operations after opening day?
2. Work with your grant professional: Grant professionals may need additional support right now as they scramble to address shifting deadlines and application processes. Ensure that they have the information they need to accurately and thoroughly complete grant applications. If you have cloud-based systems, you will find it easier to access materials remotely. They may also be the point person to access emergency federal, state, and foundation funds and should be given full support to do so if necessary, for your organization.
3. Constituent outreach: Planning for reopening is not just about how your organization will handle its business matters. Staff should reach out to constituents and check in with them to assess what they need now and in the future. Their needs may have changed from the services you offered pre-pandemic. A phone call provides a more personal touch than an email or mass mailing. Invite constituents to ask questions and share concerns. Be sure to provide staff with a list of alternative service providers if your organization cannot serve everyone right now. A list of local resources, similar resources, or whatever you feel may be helpful to your constituents should be shared among the staff making outreach phone calls so that they have useful information on hand when they begin making calls.

Remain Responsive and Flexible

Everyone hopes for a swift reopening. The likelihood is that some areas of the country may face stops and starts as sections reopen, causing them to deal with a resurgence of the disease, and to issue new stay-at-home orders until the next wave of the pandemic passes.

Remain flexible and responsive to the changing conditions in your city and community. Keep your team’s focus on how they can achieve the organization’s mission, and you’ll find others respond creatively to any new challenges that arise.

Welter Consulting

If you’d like some help with nonprofit planning, contact Welter Consulting. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.