COVID-19 and the Nonprofit Sector
This page features a collection of resources to mitigate the immediate impact of COVID-19, including direct support, loans, and grants, as well as resources from both the nonprofit sector and government.
The effects of the COVID-19 pandemic have only begun to impact the nonprofit sector. Kerredyn is committed to helping the nonprofit sector find solutions and develop strategies to sustain operations through the crisis, and to rebuild when it subsides.
Table of Contents
- Financial Assistance
- Direct Support
- Funds for NEA, NEH, and IMLS
- Grants Roundup
- Paycheck Protection Program
- Economic Injury Disaster Loan
- Direct Support
- Sector Resources
- Government Resources
- PPP and EIDL
- Fundraising Appeals
- Capital Campaigns
- Paid Sick Leave
- Event-Based Organizations
- Volunteer-Run Organizations
- Family Foundation Grants
- Board Development
- Employee Management
This document last updated April 6, 2020
- added FAQs - 04/06/20
Funds for NEA, NEH, and IMLS
The CARES Act includes $75 million for NEA and NEH, $50 million for IMLS, and $25 million for the Kennedy Center. For NEA and NEH, 40% of the funding will go to state arts agencies and the other 60% will be for direct grants.
For NEA, funds are intended to help save jobs in the arts sector and keep the doors open to the thousands of organizations that add value to America’s economy and the creative life of our communities.
- Apply on grants.gov by April 22. https://www.arts.gov/grants-organizations/CARES/grant-program-description
Chronicle of Philanthropy Grants roundup
More U.S. Companies and Foundations Mobilize for Covid-19 Relief Efforts (Coronavirus Grants Roundup)
U.S. Grant Makers Step Up for Global Covid-19 Efforts (Grants Roundup)
Interactive Map of COVID-19 Response and Recovery Funds
Deductions for Charitable Contributions
Previously, only people who itemized deductions on their taxes (primarily high-income earners) could write off charitable contributions. The Tax Act in 2017 significantly reduced the number of people who itemize. In the CARES Act, anyone can write off charitable contributions up to $300. Itemizers can give up to 100% of adjusted gross income. And corporations can give up to 25% (up from 10%) of taxable income.
Paycheck Protection Program (SBA-backed loans, forgivable)
Small business loans will be made available to nonprofit organizations that employ less than 500 people for payroll and other specified expenses from February 15 to June 30.
The loans will be made by banks, credit unions, and other lenders and are backed by the SBA. Creditworthiness is waived. Loan amounts are determined by multiplying monthly payroll, mortgage/rent, and debt obligations (not relating to COVID disaster relief) by 2.5 or $10,000,000, (whichever is smaller).
The loan can be used for payroll, mortgage/rent, utilities, and debt obligations (not relating to COVID disaster relief). Terms are the same as other SBA loans, but will not require personal guarantees. Some loans are eligible for forgiveness. Payment on loans is deferred six months to one year TBD.
- Find information about the PPP here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
SBA Economic Injury Disaster Loan
This SBA-backed loan is available for private non-profits of any size. The rate is generally 2.75% and the term is up to 30 years. Additional criteria apply.
Deadline to File Extended
The federal government has announced that it has moved the tax deadline to July 15. As IRS website. More information to come. The State of California has adopted this new timeline as well. See CA’s new deadlines here: https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/extensions-to-file-pay.html
Refundable Payroll Tax Provisions
The bill creates a refundable payroll tax credit of up to 50% on wages paid up to $10,000 during the crisis. To be eligible, a nonprofit must have experienced a drop in revenue of at least 50 percent in the first quarter of 2020 compared with the first quarter of 2019.
The credit is available each quarter until the nonprofit’s revenue exceeds 80 percent of the same quarter in 2019. Nonprofits receiving emergency SBA loans are not eligible for these credits.
CA EDD Resources for Employers
Work Sharing Program
Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions force them to cut hours by up to 60%.
CA EDD Resources for Employees
Quarantine / Illness
Employees who have been quarantined due to exposure or illness can file a Disability Insurance claim. The Governor’s Executive Order waives the one-week waiting period so employees can file immediately. Processing claims usually takes a few weeks.
If an employee is unable to work because they are caring for an ill or quarantined family member with COVID-19 (certified by a medical professional), they are eligible to file a Paid Family Leave claim.
The EDD may provide Unemployment Insurance Benefits if an employee is unable to work because they have to take care of a child/children as the result of school closures.
Reduced Work Hours
An employee may file an Unemployment Insurance claim as the result of reduced work hours, whether or not an employer has filed for the Work Sharing program.
COVID-19 Resource List: #NPCOVID19
A curated resource Google doc by Beth Kanter, et all.
COVID-19 Freelance Artist Resource
This is a regularly updated list of resources for artists. It includes everything from “Best Practices for Online Teaching” to “Temporary/Remote Job Opportunities.”
National Coalition for Arts’ Preparedness & Emergency Response - Building Resiliency in the Arts Sector
Learn how to prepare from experts in the field.
COVID-19 Resources for Undocumented Californians
Undocumented individuals and families are especially vulnerable to health threats. The California Immigrant Youth Justice Alliance is maintaining an ongoing list of resources for undocumented people.
Events - A Comprehensive List of Tips, Tools, and Examples, for EventOrganizers During the Coronavirus Outbreak
NEA - Resources to Help Ensure Accessibility of Your Virtual Events for People with Disabilities
Bloomerang - Webinars
Scroll down to the section Webinars On-Demand and Upcoming Live Webinars.
Grantspace COVID-19 Resources
Candid Coronavirus Resources
California Department of Labor and Workforce Coronavirus Resources website
Office of the Small Business Advocate
OSBA has a network of small business centers throughout the state to offer consulting, training and access to capital. Los Angeles centers are listed on pages 3-5 in this guide: https://static.business.ca.gov/wp-content/uploads/2019/12/2019-TA-Providers-Guide.pdf
OSBA also put together a helpful FAQ document: https://static.business.ca.gov/wp-content/uploads/2020/03/CA-Small-Business-FAQ.pdf
U.S. Small Business Administration
As mentioned above, small businesses and nonprofits can apply for SBA disaster assistance programs via the SBA’s website: https://www.sba.gov/funding-programs/disaster-assistance
CA Infrastructure and Economic Development Bank (IBANK)
IBANK offers small business, including nonprofit, loan guarantees, direct loans, and lines of credit via participating Financial Development Corporations (FDCs). See the list of FDCs here: https://www.ibank.ca.gov/publications/fdc/. IBANK also offers the Jump Start Loan Program that provides microloans for low-wealth entrepreneurs. To see if your organization is eligible, visit https://www.ibank.ca.gov/small-business-finance-center/ and scroll down to the section on Jump Start.
California Capital Access Program (CalCAP)
This is another loan program. Small businesses who are enrolled in the CalCAP program may be covered on losses as a result of loan defaults, making lenders more likely to underwrite a small business loan. To find a participating lender: https://www.treasurer.ca.gov/cpcfa/calcap/sb/institutions.pdf
State of CA Franchise Tax Board
The tax file and pay deadlines have been moved to July 15, 2020. See new deadlines here: https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/extensions-to-file-pay.html
Answers by Katie Adams Farrell as a follow-up to her April 3 webinar via the Sanford Institute of Philanthropy.
Can you apply for both the PPP and EIDL loans?
Borrowers can apply for both an SBA EIDL and the PPP loan. However, the PPP loan funds and the EIDL funds cannot be used for the same purpose (i.e. they cannot both be used to cover payroll). A minimum of 75% of the funds received via the Paycheck Protection Program loan must be used for payroll for it to be eligible for a forgivable loan. Please consult your lender or local SBDC for further clarification.
“Provides a limitation on a borrower from receiving this assistance and an economic injury disaster loan through SBA for the same purpose. However, it allows a borrower who has an EIDL loan unrelated to COVID-19 to apply for a PPP loan, with an option to refinance that loan into the PPP loan. The emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven under the Paycheck Protection Program.”
Is the EIDL the same as the COVID19 response one that is also on the SBA website?
There are multiple loan programs through the SBA. The Paycheck Protection Program is the new program made accessible to nonprofits and small businesses via the CARES Act. The EIDL was made more accessible via the Families First Coronavirus Response Act. The SBA’s website details more about the different loan options here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
In the Sanford webinar, you stated that for the PPP Loan the forgiveness is on the "principle", does that mean you pay the interest?
That is my understanding. Please review with your bank or make an appointment with an SBDC Advisor to confirm. The Council of Nonprofits has a great resource comparing the different types of relief loans available: https://www.councilofnonprofits.org/trends-policy-issues/loans-available-nonprofits-the-cares-act-public-law-116-132
For those of us on the front lines, do you think it is negative to do a mass fundraising appeal? I've heard mixed messages about this recently. People are definitely overwhelmed and fearful, we don't want to negatively impact them. However we are still functioning - homeless shelters, food distribution, etc. - and need to continue to raise funds.
I do not think it is negative for nonprofits on the front lines to do a mass fundraising appeal if it is focused on impact, solutions, and uplifting stories. In fact, a lot of people are feeling confused as to what they can do to help. This is a safe way for people to make a difference in the fight against this virus from the safety of their homes. Remember that your appeal is only as strong as your mailing list - if you have consistently messaged your list, they will be more inclined to support your campaign. If you haven’t, it’s not likely that your campaign will generate significant revenue.
I understand shying away from mass appeals, but what do you suggest with direct mail during this time? How about subject lines? What about mass check-ins with donors when you can't individually contact all? Thanks!
Direct mail is a mass appeal. So … delivering something that your donors, supporters, friends, etc. will find uplifting may be a good thing! It’s worth considering, however, that mailings are expensive - and most savvy donors know this. Funds might be better used elsewhere like salaries, direct program expenses, etc. Of course, if your organization is weathering this crisis without reducing wages or programs, cheers! Proceed, with sensitivity! The same advice goes for subject lines - keep it positive. As for mass check-ins, I would do your best to personalize as much as possible so it doesn’t feel trite, superficial, or opportunistic. Perhaps you could segment your list and ask volunteers or other staff for support in reaching out. There are also a lot of people out of jobs, so perhaps you can find someone to help with handwritten cards for a reasonable fee.
Should our messaging to donors include the financial gaps we will have based on the economy?
It is great to have specific fundraising goals, whether that be a funding gap resulting from closures related to COVID-19 or a goal for a specific campaign. I would refrain from using negative messaging like “we have lost $600,000 in earned income and we need your help to keep our doors open” in appeals. That messaging may work for a specific donor who is analytical and numbers-driven. For most people, however, it could feel overwhelming and scary. Most people do not make the decision to give based on what scares them the most - they give based on what makes them feel good. If you want to include a dollar amount in a campaign, make sure it’s something actionable so you and your donors can all celebrate together (perhaps virtually) when you reach it.
How many eblasts are too many? I don't want to lose our subscribers, but also want to keep us on their map and update supporters about our programs that continue to change as the pandemic changes.
Daily is too many. Beyond that, it really depends on how often you were emailing your list before the crisis and how many people were engaging with your emails. If you were emailing infrequently, then moving suddenly to emails every other day may feel opportunistic, even if sent with the best of intentions. Also, be mindful that we’re all on information overload. If you have great content that will enrich people’s lives, send it. If you don’t, perhaps take the time to develop some great content and build a schedule that moves your organization gradually toward more consistent digital communications.
We are an intermediary that provides education and advocacy. We support direct services organizations. Do you think we should not do mass fundraising appeals?
I think you should do what feels right for your organization and your supporters. Consider asking your board, advisors, and loyal donors.
How would you handle a capital campaign right now? It seems a bit frivolous right now --do we postpone?
If your capital campaign is critical to your organization’s future, then no - not frivolous. Stay the course. However, you will likely need a new capital campaign plan (both in terms of fundraising and project management). Give yourself time to re-imagine your campaign’s main messages.
As far as timeline, I would balance your organization’s ability to fundraise, (which includes external factors like a pandemic) with costs of construction. It’s hard to predict how inflation will affect the cost of construction in months and years from now. You may want to consider collaborating with your leadership team on a SWOT Analysis or Axes of Uncertainty exercise to help you make the decision that’s right for your organization now and long-term. Bottom line, don’t give up on the dream because today is hard.
Is the $300 charitable deduction in addition to taking the standard deduction?
Yes. This additional deduction is a provision of the CARES Act. It is a universal deduction that applies to all taxpayers, not just itemizers, for total charitable contributions of up to $300. The CARES Act also increased the cap on annual contributions for itemizers for individuals and corporations.
Paid Sick Leave
I've seen some conflicting info on the paid sick leave... is $511 and $200/day max payments or the required minimum payment from a company (and they may pay more but are not required to above that level)? I've seen it presented as both the cap and the required amount.
The Family First Coronavirus Act lowered the amounts that employers must pay for sick and family leave to the amounts covered by the refundable payroll tax credit - $511 per day for employee sick leave or $200 per day for family leave. Those are two different types of leave. Individual states may have additional provisions for employers and employees. Check your state’s EDD.
What unusual, creative event ideas you all might know of that have been successful with other organizations that you could walk us through -- theme, what was done, and outcomes. Thx.
A few pointers:
- Consider the experience from the participants viewpoint. Would you think it was fun if you were a participant?
- Plan for technology issues. Everyone is using WiFi - bandwidth is limited. Make sure you have some remarks prepared (or, even better, some jokes) in case something goes awry.
- Make it experiential. Watching a dance production on my iPad is fine. Learning new dance moves from my iPad while in costume and drinking a themed beverage (that you gave me a recipe for) is better!
- If you solicit interaction from your audiences, make sure you have a very solid plan for facilitating that interaction. Nothing is more frustrating than a Zoom meeting with people talking over each other - or worse, silence.
Check out this list of resources: https://cmxhub.com/a-comprehensive-list-of-tips-tools-and-examples-for-event-organizers-during-the-coronavirus-outbreak/
Also, don’t forget to make sure that your online events are accessible to people with disabilities: http://www.arts.ca.gov/resources/files/NEA_VirtualAccessibility.pdf
Sponsors and donors for fundraising activities that had to be rescheduled have not asked for $ back....do you think it is important to reach out and express gratitude and let them know the event will continue when pandemic passes BUT NOT ask if they would like a refund?
I think it’s important to proactively address the situation with as much transparency as possible. Perhaps your situation is like mine with my Hamilton tickets (sigh) - the Pantages emailed me to let me know that the performance will be rescheduled and that my tickets will be automatically transferred to the new date. I would, however, make sure that your contact information is easy to see and access in the event they questions.
We are a sports youth development non-profit focused on Golf for the underserved communities we operate in. What suggestions would you have for us to help connect with parents, and donors
How can you help kids stay connected to the sport when they’re stuck at home? A series of videos? Exercises they can do from home? Interviews? Places to watch the greatest rounds of golf of all time? I think a lot of people find watching professional golf to be a soothing experience - perhaps there’s a way for you to lean in there - and even solicit feedback via Facebook or another group share platform about why that particular performance was so epic. Also, parents need help occupying their children! Entertain their kids and parents will thank you! Just don’t make it feel like homework.
I am on the board of a volunteer-run arts organization - no staff. 75% of the board is still working right now and we're feeling really overwhelmed. Any recommendations on what we should focus on first?
First, cut non-essential expenses. Then, eliminate (or pause) all programs that are not High Impact. Break down tasks into small chunks so your board members feel involved, but not overwhelmed. You might consider sending out a quick survey via Google Forms - three-or-four questions - to your board members to ask them what they feel are the most important activities and how much time and energy they are able to devote to the cause.
Family Foundation Grants
Family foundations have decreased their giving and a lot have gone to not accepting unsolicited proposals. Will you please address how to approach them given these factors?
If a family foundation has decided to pause grantmaking right now, it should be respected. The foundation has likely made this decision because it is too difficult to operate given the current circumstances or because the board is concerned about market volatility. Please remember that a family or individual creates a foundation because they want to do good; therefore, it’s quite likely that their decision to pause grantmaking was not an easy one. Focus on stewarding the relationship in a sensitive way and you will be at the top of the list when they’re able to resume grantmaking. If this family foundation is one that you have a personal, strong, or long-term relationship with, you may consider inquiring about their grantmaking process. It would be wise to demonstrate impact from their previous support.
[You said] focus on mission. Do you have check lists and sample questions ... to follow and ask the tough questions to our board?
I like the Matrix Map. Check out this article from the Nonprofit Quarterly that explains how to create one.
You may also consider bringing in a consultant to ask these tough questions - depending on the personalities on your board - especially if you are preparing to operate and engage with your constituencies in a new, more focused way.
In your webinar, you spoke about donor/funding retention. How about employee retention? Example: Is micromanagement of development staff really the best long term strategy?
I’m pretty sure we can all agree that micromanaging is not a good strategy, for the manager or the employee. I’m going out on a limb and assuming you are the employee that’s feeling micromanaged (since most managers don’t fancy themselves micro). Feeling micromanaged, needled, controlled is indeed yucky - so I’m going to invite you to consider that perhaps your manager is feeling scared and uncertain. It’s natural for humans to try to control things when we’re feeling out of control. While I wouldn’t recommend psychoanalyzing your boss, you might find that an open transparent conversation might help. Never threaten to leave (unless you’re really willing to walk out that door), but perhaps consider asking your boss for a meeting where you express your feelings in a direct and curious way and bring a solution. For example, you might recommend that you devote some time to mining in your donor database or perhaps you’d like to brainstorm a new plan for stewardship communications. If I’m totally off and you are the micromanager, then it seems like you’re already pretty self-aware and you probably know what to do.