Knowing how to best navigate new legislation and tax guidance can be difficult during the best of times. The ongoing pandemic has both triggered a host of new legislative measures that must now be interpreted and acted upon with tight timelines and increased pressure to get the most value for your organization. Global Impact understands the difficulty of this situation, and we are happy to offer guidance from industry veterans to help you and your organization make the very most of the new COVID-19 legislation.

On Wednesday, April 29, Global Impact hosted a webinar titled “Navigating Your Organization through COVID-19 and Beyond.” The webinar featured presentations from Scott Jackson, President & CEO of Global Impact and Ruth Madrigal, Principal at KPMG, as well as from Global Impact Senior Directors Matt Gembecki and Brittany Mattfeld Craig.

During the webinar, Ruth Madrigal shared three tips about navigating COVID-19 legislation as a tax-exempt organization. This recap will give an overview for those that missed it – or a refresher for those able to join. To view Ruth’s presentation or the webinar as a whole, check out our recording.

Tip #1: These provisions were not written for nonprofits, but they still benefit them 
COVID-19 legislation goes beyond the CARES act to encompass a wide range of economic and policy decisions made by the government to help the economy survive this crisis. The overarching theme for almost all legislation has been a focus on businesses and employees, keeping firms afloat and workers on payrolls. Ruth pointed out that nonprofit organizations are in the unique position where their revenue has been impacted by the crisis but demand for their services has actually increased. Luckily, tax-exempt organizations are able to benefit from the majority of COVID-19 business provisions, some of which are displayed below:

COVID-19 business provisions: FFCRA paid leave and credits (EPSL/FMLA+), employee retention credit, payroll tax deferral, SBA paycheck protection program/EIDL, treasury/federal reserve facility, other sector specific programs

These provisions promote cash flow, which is just as important for nonprofits as it is for any traditional business. There is often some translation that needs to occur between for-profit and nonprofit lingo surrounding these policies, but there is a great deal of benefit that nonprofits can enjoy from these provisions. For example, the Payroll Tax Deferral is available to all nonprofits, allowing organizations to defer their employer-side social security tax contributions, providing instant liquidity that does not require the sometimes difficult application process of other loan programs. Make sure to take the time to understand which of these programs best fit your organization, and understand that participation in one program may preclude participation in another. For example, if your organization participates in the Paycheck Protection Program, it is precluded from participation programs such as the Employee Retention Credit. Research, research, research – and listen to the full webinar to learn more!

Tip #2: Communicate with your legislators 
The only constant during this crisis has been change, and with new legislation, guidance and tax policies emerging every week, the best way to keep up is to speak up. Nonprofits and other tax-exempt organizations provide vital services in civil society, health care and human services that are only growing in importance as the crisis deepens. It is crucial that nonprofits receive the support they need to remain open and operational during this downturn so their work can continue to make the key difference it always has.

Ruth reminded us in her presentation that it is vital to communicate with your legislators, alone or with partners, to ensure that the government is aware of the needs of the sector. For example, it is crucial that economic injury calculations take into account charitable contributions as well as typical business profits when calculating lost revenue. The sector has been successful thus far in keeping tax-exempt organizations within the growing conversation, but it is only with persistent effort that we can assure that nonprofits are not left behind in this legislative rush.

Tip #3: Record Keeping and Board Relations are crucial 
The most consistent requirement for the varied relief programs, especially those pertaining to employee wages, is regular and detailed record keeping. Hours worked, percentage of wages maintained and lost hours of productivity are all key factors to track for a variety of programs. The crux of keeping good records is maintaining strong systems, so work closely with your HR and accounting teams to ensure you are keeping records of everything you could need for current programs or future initiatives you may participate in.

Ruth also emphasized the importance of keeping your board in the loop. Not only can your board offer guidance and expertise, it may be necessary to attain board approval to take on debt in the form of new loans or to significantly shift your programming goals. The more up-to-date your board is on your thought process and next steps, the more swiftly they can approve any new measures that are in the best interest of your organization.

Understand available programs - what are the eligibility requirements? How must the funds be used? How do the programs integrate (or not)? Optimize systems - maintain strong internal records to facilitate accurate reporting, set up appropriate systems (e.g. to track wages, defer payroll tax), consider separate bank accounts for PPP/other grant tracking. Communicate with your Board - your Board can offer key guidance on next steps and policy implementations, board approval may be required for operational and financial shifts (e.g. to start a new program, to take on debt), consult your bylaws.

Keep an eye out for more highlights from the “Navigating Your Organization through COVID-19 and Beyond” webinar, and make sure to stay tuned for more exciting webinars in the future. To learn more about how Global Impact is responding and for resources to help your own COVID-19 response, visit our coronavirus information and resources page.