The coronavirus pandemic has forced an unprecedented economic slowdown as we work to slow the spread and flatten the curve. Nonprofits are among the entities particularly affected by this abrupt change. Fortunately, the CARES Act, signed into law two weeks ago by President Trump, contains provisions that will help nonprofits affected by this unprecedented economic crisis.
Below are provisions that detail how Ohio nonprofits will benefit from the CARES Act during the coronavirus crisis:
Providing Economic Relief
CARES provides $350 billion in low-interest loans for 501(c)(3) and 501(c)(19) nonprofit organizations with under 500 employees through the Small Business Administration under the Paycheck Protection Program.
These nonprofits are eligible to receive up to $10 million under this program.
Importantly, if the loan is used for payroll, rent, or mortgage payments, it is completely forgiven, effectively making it a grant.
The application for borrowers can be found at this link.
CARES includes an additional $500 billion in immediate tax relief, some of which nonprofits can access despite being exempt from income tax, including provisions such as payroll tax deferral and an employee retention tax credit.
This employee retention credit gives businesses of all sizes, including nonprofits, a payroll tax credit for wages paid during a suspension of their business operations or periods where they have experienced significant revenue losses.
These provisions allow Ohio nonprofits to prioritize keeping employees on payroll and thus minimize painful layoffs.
The provisions also provide immediate cash flows to help nonprofits, and in particular small nonprofits without cash reserves, stay afloat during the months ahead.
CARES also creates a $450 billion fund to provide low-interest loans to distressed nonprofits that have been affected by the crisis
These loan funds are designed for nonprofits to retain their employees and keep jobs in the United States during this crisis.
In addition to this loan fund, the Treasury Department also set $17 billion in lending capacity to help businesses, and in particular manufacturing businesses, that are critical to our national security
CARES provides funding for states to reimburse nonprofits for half of their costs associated with paying unemployment benefits, through the end of the year.
CARES relaxes the limits on charitable contributions to allow individuals and corporations to donate more deductible funds to nonprofits whose revenues have been affected by the coronavirus pandemic.