A coalition of 40 of the nation’s largest charities is asking lawmakers for $60 billion in Coronavirus (COVID-19) pandemic relief and economic stimulus in addition to creating a universal charitable deduction for taxpayers through 2021 to incentivize giving.
In a message to Congress today, nonprofit leaders stressed that the COVID-19 pandemic “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 organizations.”
The coalition leaders wrote: “Nonprofits need an immediate infusion of $60 billion in capital to maintain operations, expand scope to address increasing demands, and stabilize losses from closures throughout the country.”
The Great Recession in 2008-09 depressed donations by $40 billion and “we fully anticipate government grants/contracts to lag or be canceled,” according to David L. Thompson, vice president for public policy at the National Council of Nonprofits, one of the 40 organizations that organized the effort. Among others that signed on were United Way, Goodwill, American Heart Association, Americans for the Arts, The Y, YWCA, and United Philanthropy Forum.
Funds can be distributed quickly through multiple funding streams, including but not limited to, expansion of the Economic Injury Disaster Loan program for nonprofit employers, emergency grants to nonprofits operating under grants from federal, state, local, or other pass-through entities, and others to ensure the continued flow of charitable donations.
Nonprofits constitute about 10 percent of the U.S. Gross Domestic Product (GDP) and employ some 12 million people. “Without dramatic and immediate financial and programmatic backstop from government, America’s charitable nonprofits and the people we serve face a precipitous decline in mission services at a time when our efforts are needed like never before by the most vulnerable in our communities,” nonprofit leaders warned. Also, the largest expenditures for charitable organizations are personnel costs and in past disaster relief efforts, Congress has approved employment-related tax credits that failed to recognize nonprofits as significant employers.
Charities where paid family and medical leave are provided should receive a tax credit the organization can use. The coalition lauded the approach taken in the Families First Coronavirus Response Act (H.R. 6201), which would provide a payroll tax credit to all employers of a certain size, including charities and other nonprofits, providing emergency paid family leave and sick time pay for care related to COVID-19. Congress should provide payroll tax credits to all charities, regardless of size, that provide paid family leave and sick time pay as a result of the COVID-19.