Nonprofit CARES Act – Federal Funding for Charities records the answers I’ve provided 159 nonprofit executives who have questions about the Federal Nonprofit CARES Act.
Nonprofit CARES Act – Federal Funding for Charities
Here’s ten queries and answers I’ve supplied these past 48 hours:
Kim Banach ASKS:
March 29, 2020 at 1:56 PM
Can you explain the Charitable Giving Incentive Below? I am confused by the total of $300 and the lifting the existing cap on annual contributions?
Charitable Giving Incentive: Includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. Section 2204. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap.
Jimmy LaRose SAYS:
March 29, 2020 at 2:33 PM
Kim,
You may remember the Tax Cuts & Jobs Act of 2018 when the standard deduction amount was raised so significantly that millions of taxpayers opted to take the non-itemizer standard deduction (thereby not reporting their charitable contributions [because they didn’t itemize]). Our understanding of the CARES Act Charitable Giving Incentive is that in 2020 even if you take the standard deduction taxpayers will be able to itemize their charitable contributions up to $300. As to the second part of your questions. When a person or itemizes and reports their charitable giving they do not receive a dollar-for-dollar write off e.g. if you itemize $1000 in charitable gifts your actual write off is only $600. From what we can tell the CARES Act will allow a %100 write off. If you give $1000 you will receive a $1000 write off. Regarding corporations, at present corporations can only write-off 10% of their net profits. It looks like the CARES Act will allow them to write-off 25% of their net profits. They are also being provided a cap raise on food donations as well (think of your grocery markets, etc.)
Please watch your inbox for more updates. We’re working with the Small Business Administration to prepare you for next steps.
Steve Pontious ASKS:
March 29, 2020 at 11:30 AM
I’m the President of a 501c3 non-profit (a small town Historical Society) who has rental property we own free and clear which we lease out to some small businesses as well as residents at minimal rent to cover our operating costs. My tenants are wanting us to forgive 2-3 months of rent. Do we, as this type of organization, have any way to re-coupe this rent via the stimulus package should we grant rent forgiveness?
Jimmy LaRose SAYS:
March 29, 2020 at 11:58 AM
Steve, as we understand the bill, you will be able to receive a loan to pay the bills you would normally rely on rental income to pay. HERE’S A POSSIBLE OPTION. Don’t forgive the rent. Keep a running tab on what they owe. They need to apply (whether or not they are for-profit or non-profit businesses) for the emergency funding. As we understand it even for-profit businesses will be “forgiven” any monies they spend on salaries, rent or utilities. When they receive their loan/grant they need to pay you their arrears.
Your thoughts Steve?
Donald Lauer ASKS:
March 29, 2020 at 9:51 AM
Trying to find out if this would cover volunteer ambulance companies with no paid personnel, 100% volunteer for a $10,000.00 loan to cover costs associated with the COVID19 virus?
Jimmy LaRose SAYS:
March 29, 2020 at 9:59 AM
Donald, according to our understanding of the bill, GRANTS will be made available for utilities, rents and salaries. LOANS will be made available to for all other reasonable expenses needed to keep your doors open. Loans will have reasonable interest rates and need to be paid back within seven years.
Gwendolyn Jones ASKS:
March 29, 2020 at 11:12 AM
Will nonprofits who have no paid employees yet have utilities and rent receive funding…
Jimmy LaRose SAYS:
March 29, 2020 at 11:16 AM
Gwendolyn, it is our understanding that the answer to your question is yes. You will be able to receive funding for utilities and rent ultimately as a grant. Initially, you will apply for a loan. However, if you demonstrate that you spent loan monies on utilities or rent those loan monies will be “forgiven” and will not require repayment.
Steve ASKS:
March 28, 2020 at 6:29 PM
For the Paycheck Protection Program Loans (emergency SBA 7(a) loans), I’ve read different interpretations re: exclusion of employees earning $100,000: does it mean the entire employees’ earnings are disqualified; or does the first $100k apply and just the portion above $100k not apply?
Jimmy LaRose SAYS:
March 28, 2020 at 6:58 PM
Steve we’re working with payroll consultants next week to figure out an accurate answer to your question.
Elizabeth Alonzo-Villarreal ASKS:
March 28, 2020 at 7:27 PM
My organization is a 501c3 non profit Homeownership Center specializing in Homebuyer Education, Homeownership Counseling, Foreclosure Mitigation Counseling, Credit Coaching education and counseling. All of these services are free. We also offer below market rental units (no subsidized but we accept Section 8 vouchers), this is the majority of how we sustain the organization. We are a staff of 9. We also have a note with the bank for a 33 unit apartment complex that we constructed. Would we qualify for this type of loan that will qualify for a grant? If so, where do we apply? Thank you.
Jimmy LaRose SAYS:
March 28, 2020 at 7:32 PM
Elizabeth, according to our experts nonprofits will use the Small Business Administrations Website (https://SBA.gov) to apply for their grants and/or loans. At first glance your charity will be eligible for both grants and loans. We’re working with experts and will have more accurate answers for you next week. KEEP THE FAITH.
Lisa ASKS:
March 29, 2020 at 1:16 PM
My organization is a 501c3 Community Visual Arts Center – an art gallery, classes and workshops including several for underserved populations. We have a staff of 6 part-timers. We have kept everyone employed but with less hours because we are closed. Would we qualify for this type of loan that will qualify for a grant so we can keep paying our rent and our staff?
Jimmy LaRose SAYS:
March 29, 2020 at 1:51 PM
Lisa, every indication is that you will be able to apply for a loan that will then be “forgiven” if you spend the loan dollars on salaries, rent and utilities. Our understanding is that your LOAN will be turned into a GRANT once you report your expenses. Please watch your inbox for more updates. We’re working with the Small Business Administration to prepare you for next steps.
Kim ASKS:
March 29, 2020 at 3:01 PM
What am I missing on how a non-profit school could qualify for an SBA 7 loan? Everything on the SBA website says to qualify for an SBA loan you must be for profit. I am not seeing any programs through the SBA for non-profits. Any assistance would be great.
Jimmy LaRose SAYS:
March 29, 2020 at 3:10 PM
Hey Kim,
Sometimes SBA language can be confusing because it often uses the term “owners.” Here’s the good news, SBA considers NONPROFITS to be a business. Why? Because nonprofits are businesses. If you take a deeper look there are all sorts of references to nonprofits on the SBA site e.g.
“The SBA will work directly with state Governors to provide targeted, low-interest loans to small businesses and non-profits that have been severely impacted by the Coronavirus (COVID-19). The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.”
PLEASE NOTE: Earlier this month two bills were signed into law that PRECEDED the CARES Act. The Small Business Association HAS NOT updated their site with new information or applications regarding the CARES Act.
Please watch your inbox for more updates. We’re working with the Small Business Administration to prepare you for next steps.
Meg Gill ASKS:
March 29, 2020 at 3:15 PM
Everything i read says it will take longer to hear about the Paycheck Protection progam so small non-profits should consider filing application for SBA $10k grant and the EIDL loan. If both of those are approved and then the organization is approved for Paycheck protection, do we roll the EIDL and SBA grant into that to have it all be “forgiven” or do they offset the forgiveness?
Jimmy LaRose SAYS:
March 29, 2020 at 3:49 PM
Meg,
We’re working with Wegner CPAs who has over 800 nonprofit clients to uncover accurate answers to important questions just like yours. Your inquiry is a great one and we hope to have an answer for you by end-of-business on Monday.
Randy Chesnut ASKS:
March 29, 2020 at 5:36 PM
I am a director of a Christian camp.
Will you all cluster information (501c3’s) together in what we should do, where to apply, etc?
What I mean by cluster is,
Information for
1. Churches
2. Camps
3. Etc
Jimmy LaRose SAYS:
March 29, 2020 at 6:34 PM
Randy,
Clustering will not be complicated. Yes, we will post ASAP the article directing all nonprofits, ministries and churches to the correct website as soon as it’s online.
The Federal Government will use the Small Business Administration to distribute GRANTS & LOANS to the following charitable businesses:
NONPROFITS that file an annual FORM 990
CHARITIES that file an annual FORM 990
CHURCHES that file an annual FORM 990
MINISTRIES that file a FORM 990.
THEY ARE ALL BUSINESSES AND ARE ELIGIBLE FOR GRANTS & LOANS UNDER DETERMINED CONDITIONS.
Nonprofit CARES Act – Federal Funding for Charities was first posted at JimmyLaRose.com
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