The Importance of Supporting Nonprofit Sector in Relief Efforts

March 23, 2020

We are gathering information about the needs of Rhode Island nonprofits in this difficult time. United Way and Rhode Island Foundation have done an initial short survey, identifying supply needs (mostly food for distribution, sanitation supplies, and technology for remote work), client financial needs (rental assistance, utility assistance, food, unemployment, etc.) and their organizational financial losses resulting from their compliance with public health restrictions.

At the same time that many nonprofits are providing critical services to the most vulnerable in our communities, virtually all of Rhode Island’s nonprofits have lost some or all of the revenue they depend on. In order to protect public health, they have cancelled fundraising events and arts performances, and are not able to continue programming for which they have fee for service contracts. In addition, moving forward many of their donors are themselves facing job losses and financial hardships and will not be able to contribute support.

Charitable nonprofits are not currently eligible for Small Business Administration emergency loans so there are currently no resources to help community-based organizations, service providers, and arts organizations survive this crisis and the resulting economic downturn, which John Macintosh of SeaLevel Partners is calling an “extinction level event” for nonprofits.

United Philanthropy Forum, as well as countless other nonprofits, have called for Congress to specifically include the charitable sector in COVID-19 relief legislation.

If members are interested in connecting with members of Congress in Rhode Island or other districts in which you have operations, the Forum, Independent Sector and the National Council of Nonprofits recommend that the relief package:

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.
Clarify that charitable nonprofits of all sizes 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.
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 afterwards through 2021.