Thank you for all you are doing to sustain our communities through the COVID-19 pandemic. We understand Congress is actively working on an economic stimulus bill to mitigate the recession COVID-19 has created. Chicago’s nonprofits face an unprecedented threat to be able to serve our communities. Our sector is committed to ending COVID-19, but we must remain in existence to do our part.
The impact of COVID-19 on our sector has been severe. Organizations face near impossible choices when our communities need us most. Staff furloughs or layoffs; suspend services this week or next. Some have one to two weeks of cash left. Even our largest institutions are suffering significant deficits and layoffs. Gig artists are out of work. Part-time workers laid off. Underpaid health and human service workers are asked to shift and work more, in high-risk positions.
The latest draft of the stimulus, from Senate Majority Leader McConnell (R-KY), provides minimal support for charitable organizations, but certainly not enough to help nonprofits succeed and survive. And certainly not as much as business interests. We are particularly concerned that the small business loans (Section 7(a)) exclude nonprofits with more than 500 employees and organizations that bill for Medicaid. We commend the federal student loan payment suspensions, which is a major burden on our workforce.
We are calling on our Congressional leaders to:
- Clarify that charitable nonprofits of all sizes, including more than 500, are able to participate in the emergency Small Business Loan Program by using the tax-law definition of charitable organizations (Sec. 501(c)(3) public charities) and removing the language that excludes nonprofits that are eligible to receive Medicaid reimbursements.
- Expressly include charitable nonprofits in the $200 billion loan fund for businesses. The charitable sector needs an immediate infusion of $60 billion and the loan program is a fast way to get cash in the hands of organizations serving immediate needs in communities, yet facing lost and declining revenue due to the pandemic.
- Improve the above-the-line charitable deduction by raising the cap to $2,000 and allowing all taxpayers to immediately claim the deduction on their 2019 taxes (due on July 15), and afterward through 2021.