The Coronavirus pandemic is causing significant hardships for many non-profits. Events and fundraisers have been canceled or postponed. It’s difficult to rally volunteers due to social distancing restrictions, and because unemployment has been climbing drastically, donors may have significantly less to give. All of these issues contribute to a funding deficit, making it very difficult to continue day-to-day operations for many organizations.

On March 27th, Congress passed the Coronavirus Aid, Relief, and Economic Securities (CARES) Act. At $2 trillion, this marks the largest relief act in history and it, provides significant financial relief for non-profits. While there are several loan provisions helping make it possible to keep operations running, it’s also important to be familiar with the benefits the act provides to donors. Below are highlights of the bill that may be useful to your organization:

Non-profit relief

The CARES Act provides several loan options that are available to non-profits of different sizes.

Emergency Small Business Loan
Organizations that have fewer than 500 employees (part-time and full-time combined), can apply for an Emergency Small Business Loan. This loan can be 2.5 times monthly payroll costs (up to $10 million) to cover payroll, health insurance, facilities costs, and debt. This loan is forgivable if all staff is kept employed for 8 weeks after the origin of the loan or if all employees that were laid off between 2/15- 4/26 are rehired. Non-profits can apply for this loan until June 30.

Industry Stabilization Fund
Organizations with 500-10,000 employees who retain at least 90% of their employees can apply for a loan through the Industry Stabilization Fund. This loan cannot be forgiven, but it is interest free for the first six months with the interest rate is capped at 2%. This loan is available until 12/31/2020.

Economic Industry Disaster Loan
Another option geared towards private non-profits is the Economic Industry Disaster Loan. Applicants are eligible for a loan of up to $2 million. Unlike the other two options, this loan is based on credit score and waives a personal guarantee of up to $200,000. An emergency advance will get the organization a $10,000 loan in three days.

Payroll Tax Extension
The payroll tax extension can help non-profits with employee costs. Employers can stretch out payments of their share of the Social Security payroll tax owed, half by the end of 2021 and the other half by the end of 2022.

Education Dollars
For non-profits who are in the education arena, the CARES act is providing $30 billion in emergency education funding or colleges and universities, states and school districts.

Donor Benefits

The CARES Act also allows for provisions that incentivize donors to make charitable contributions that can help non-profits during this crisis.

• Donors can make an above-the-line deduction for contributions of up to $300 that are made to certain qualifying charities.
• All taxpayers are eligible for this deduction, including those who use the standard deduction. For the small percentage of those who itemize, the act suspends the normal limit on contributions for 2020, which is 50% adjusted gross income (AGI) for individuals.
• For corporations, AGI is increased from 10% to 25%. Corporations can also deduct 25% of food donations.

Ways you can engage your donors now

By making donors aware of the benefits the CARES Act provides, you can make a stronger appeal and continue to forge ahead during this difficult time. Below are some ways to engage with your donor base in this uncertain time:

Keep your event, if you can
Most organizations rely on the funding generated from an event to use in the immediate future, so canceling or postponing an event will stop or delay that expected revenue. If possible, turn your live event into a virtual event. If you are planning a 5K, turn it into a virtual 5K. If you were planning a live auction, go digital with it. Most of your donors are home and have time to participate, so why not provide the means!

Be a "social" butterfly
Now is the perfect time to ramp up your social media presence. You donors are home and likely have a significant amount of screen time. Use various platforms (e.g.; Facebook, Instagram, Twitter, LinkedIn, YouTube) to show donors how the pandemic is affecting your organization, what your needs are, and how you are continuing your mission. Use this opportunity to try something different, like making an appeal through a personal video. Donors are social distancing, so making a personal connection will have an even greater impact.

Show donors how they can be part of the solution
It’s no secret that philanthropy is a crucially important asset to this country, especially during times of crisis. From wars, to health emergencies, to terrorist attacks, when the going gets tough, Americans have a deep desire to help one another.

Non-profits are a tool that private citizens can use to accomplish this, but it’s up to your organization to explain how. The pitch for healthcare and social services is easier in this regard, but you don’t need to be on the front lines of this pandemic to be part of the solution.

Because this crisis has affected nearly every facet of our society, all non-profits can play a role in leading relief and recovery efforts. People will be seeking ways to contribute. Show your supporters how they can join in your mission and become part of a wellspring of support lifting our country.

The information in this paper is not intended as legal or tax advice. Consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation.