Can Nonprofits Survive Coronavirus?

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The coronavirus outbreak has left many nonprofits in the USA holding on for dear life, with mass layoffs, closures and many left destitute following lockdown measures. The biggest question on everybody’s lips right now is, “What happens next?” Can nonprofits survive coronavirus?

At this juncture, it seems that most effective way for nonprofits to transcend the effects of the crisis is to pull in aid wherever possible and work on short-term survival strategies to help get them back on their feet.

Coronavirus

What happened to nonprofit coronavirus relief from Congress?

In March 2020, the US Senate passed a $2 trillion relief bill to mitigate the effects of coronavirus on the economy. The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was aimed at providing businesses, artists, and nonprofits with much-needed support during this time.

Initially, $350 billion from the fund was allocated to nonprofits. The funds provide Paycheck Protection Program (PPP) loans to help cover mortgages, payroll, rent and other essential expenses. As of Apri 17th, though, the Nonprofit PPP Loan Program has reached its cap and it remains to be seen whether more aid will be forthcoming.

Nonprofits need to stay proactive

The outside world may appear to have come to a halt, but within the confines of our homes or remote workplaces, it’s more important than ever to keep reporting up to date, to stay active, and to dream up as many contingency plans as possible to emerge successfully from the crisis.

Financial assistance is still available at national, state and community level if you seek it out. But the national backlog does suggest that starting small is the best strategy at this point. Smaller organizations are far more likely to receive the aid they need by proactively reaching out to their communities and local governments.

Creative thinking is the best thing anyone can do in times of crisis. And opportunity presents itself when you look for it. Google is your greatest ally when it comes to finding new sources of funding, but there are also more targeted approaches your organization can take.

The Government Benefits Center is a site that is worth checking on a regular basis. It provides an up to date newsroom and links to federal aid programs that could help your organization weather the coronavirus storm.

Big business is also stepping up to the plate and is likely to be far more receptive to pleas for help from legitimate nonprofits now than they traditionally would be, provided their financial situation allows it. Reaching out now can’t hurt, even if it’s just in the interest of finding support post-crisis.

Candid has compiled a comprehensive list of coronavirus relief funds that are helping charitable organizations out of the doldrums. These include several locally-based funds like the Greater Manhattan COVID-19 Relief Fund (GMCF) and Oklahoma’s 2020 Disaster Relief Fund, among many others. 

Help is out there. And it’s important to stay hopeful and proactive as you navigate the rough seas that the pandemic has created.

Let the crisis bring us together

A quote from author and hospice counselor, Kate McGahan is great food for thought as we see the world change before our eyes every day; “Deep within every crisis is an opportunity for something beautiful.”

Even in this extremely challenging period, opportunity does exist. There is potential to come out of the COVID-19 pandemic stronger and more prepared than we have ever been. And now, more than ever, nonprofits need to stay focused and summon every possible resource available to stay afloat. Can nonprofits survive coronavirus? I say yes.

About the Charity CFO

The Charity CFO is an accounting service and resource provider that is specifically focused on the nonprofit sector in the USA. Get in touch to discuss sound financial and accounting strategies to maximize your financial resources when you need them most.

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Nonprofits Eligible for Forgivable Loans – CARES Act

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Nonprofits are eligible to apply for forgivable loans to help cover payroll and rent. Loan amounts up to 2.5x your monthly payroll. Here is more information on the CARES Act.

The passing of the CARES Act has now provided funding relief for small business and nonprofits. Here is a brief summary:

  • Nonprofits that have fewer than 500 employees an in operation on 2/15/2020 are eligible to apply.
  • Loan amounts is the lesser of $10M or 2.5x average monthly payroll expenses for the preceding 12 months.
  • Funds must be used for within the next 8 weeks: payroll, group health costs, interest payments on debt, rent, and utilities
  • Loan terms are 4% with 10 year maximum
  • NO COLLATARAL
  • NO PERSONAL GUARANTY
  • No payments are due for at least 6 months
  • Loans will be eligible for forgiveness.

How do I know if I’m eligible for forgivable loans?

What’s the catch? You must spend the money on eligible expenses. You must protect paychecks (keep your staff employed). You cannot get full forgiveness if you reduce FTEs or reduce compensation by 25% or more between now and June 30th.

How do I apply for the forgivable loans?

These loans will be processed through your local bank. If you have a banking relationship already, start there. Contacts we have had with the bank have said they expect the loans to be available around April 7th.

If you do not have your accounting in order or need help preparing the needed financial documents, let us know and we can help! You must be able to have a means to calculate payroll and other eligible expenses. You will also need a means to track these costs when you receive them in order to determine eligibility.

How much can I apply for?

Loan amounts is the lesser of $10M or 2.5x average monthly payroll expenses for the preceding 12 months. You should run a calculation on your preceding 12 months payroll to compute an average monthly payroll. You can request essentially 2.5 months of payroll expenses. If you are a seasonable employer, you should compute average monthly payroll for March, April, May and June of 2019.

 

In addition to nonprofits eligible for forgivable loans, the nonprofit industry is seeking additional support and resources through philanthropy partners. Some nonprofits will be affected more than others. Here is another great article to consider your response to the challenges you are facing.

COVID-19 Resources for Nonprofits

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In the throes of the global COVID-19 pandemic, organizations everywhere are feeling the effects of the economic devastation wrought by isolation measures, business shutdowns, travel bans, and markets crashing.  To assist their leaders, we have worked on pulling COVID-19 resources for nonprofits.

Nonprofits have been among the worst affected. In fact, the Nonprofit Times reported on 18 March 2020 that a coalition of the United States’ largest charities requested $60 billion in COVID-19 relief from Congress, in order for them to maintain operations. 

Amid the crisis, donations have diminished, and charities are finding that they are loose ends for support during this difficult time. But sadly, all there is to do at this stage is mitigate, given the current circumstances. To help, The Charity CFO has curated a few useful links and resources that may be of assistance.  COVID-19 resources for nonprofits include some of the following:

CDC

There is a lot of fake news out there. This being the information age, there is also a lot of misinformation around. But for legitimate and up to date facts on COVID-19; how to prevent it, how it spreads and everything else you need to stay informed, the Centers for Disease Control and Prevention (CDC) on cdc.gov is about as reliable a source as you are likely to get. 

WHO

Another reliable and educated source of information for all things COVID-19-related, is the World Health Organization (WHO). The WHO curates information from a global network of healthcare professionals via their web portal on who.int. 

The Nonprofit Risk Management Center

The Nonprofit Risk Management Center offers a variety of services to nonprofits, including workplace safety services, fiscal oversight and fraud protection, and governance assistance. Visit their website on nonprofitrisk.org.

Bridgespan

Bridgespan has set up a page for nonprofits as an easy reference guide to helpful resources such as various regional non-profit councils, educational resources, funder responses, and social distancing guidelines, to help ease the burden. 

Center for Disaster Philanthropy

The Center for Disaster Philanthropy is a nonprofit organization that was established specifically to help donors maximize the effectiveness of their funds in the event of a disaster – which COVID-19 certainly is. 

And while this may not necessarily be relevant to other nonprofits, their website is a valuable resource for reading material and case studies that could provide helpful insight on navigating the current crisis. 

Harvard Business Review

The HBR is a great source for articles like this one and more that are helpful for employers seeking to manage the coronavirus pandemic in the workplace. In the wake of the pandemic, HBR has set up an Coronavirus Insight Center, which collects informative articles and thought leadership about the situation. 

The Occupational Health and Safety Administration

The Occupational Health and Safety Administration (OSHA), an arm of the United States Department of Labor, offers regularly updated information for employers and staff about the ever-changing state of COVID-19. The site also includes resources that guide on preventative measures that can be implemented in the workplace. Visit their site on osha.org. 

The National Council of Nonprofits

The Council of Nonprofits remains an invaluable hub for information on updated policies, trends and highly relevant material relating to the COVID-19 outbreak. Visit their site for advocacy resources and useful material like this, to stay informed about the ever-changing nonprofit landscape.  

“This too shall pass”

Times may be tough. But as the old Persian adage suggests, it is temporary. And through understanding, cooperation and responsibility, organizations can and will bounce back. 

The Charity CFO provides specialized accounting services and resources to nonprofits, particularly in times like the present where responsible financial management is of extremely high importance.  If you need help with your accounting or applying for COVID-19 SBA funding, please connect with us here.

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