No one needs to tell non-profit organizations how tough the past year has been. According to the John Hopkins Center for Civil Society Studies, 7.7 percent of non-profit workers — nearly one million people — lost their jobs between February 2020 and January 2021. An even higher percentage of arts and education organizations lost jobs last year. Although the non-profit sector received higher-than-usual donations in 2020, many non-profits that sought COVID-19-related loans were shut out.

So, the new American Rescue Plan Act’s (ARPA) provisions for non-profits are welcome. Here is a selection of the key elements.

Employer Tax Credits
As with 2020’s Coronavirus Aid, Relief, and Economic Security Act, the ARPA helps non-profit employers keep employees on their payrolls. The Employee Retention Credit is a tax credit that has been extended through December 31, 2021 for eligible employers that continue to pay worker wages during COVID-19-related closures or experience reduced revenue.

Tax credits for non-profits granting paid sick and family leave to staffers also are extended to September 30, 2021. The ARPA increases the amount of wages employers can claim from $10,000 to $12,000 per employee. Employers may now include time employees use to obtain vaccinations (and any time needed to recover from vaccination side effects) as paid leave.

Unemployment Insurance
To help self-insuring non-profits, the ARPA extends federal coverage of the unemployment costs of reimbursing non-profits. The current reimbursement rate of 50 percent continues to March 31, 2001. On April 1, it increases to 75 percent and remains at that rate until September 6. The ARPA also continues coverage for self-employed non-profit workers and staff of religious and smaller non-profits.

Expanded Loan & Grant Access
The ARPA allocates a new $7.5 billion to the Paycheck Protection Program (PPP) and expands eligibility to some non-profits with more than 500 employees that operate in more than one location. Currently, eligible non-profits have until March 31, 2021 to apply for PPP loans. Because this gives employers little time to assess their needs and apply for a loan, many non-profit advocates are calling for an extension beyond March 31. Congress is discussing a standalone bill that would extend the deadline.

Performing arts organizations can apply for PPP loans, but they also may want to consider requesting a grant from the new Shuttered Venue Operators Grants (SVOG) program. The Small Business Administration is expected to start accepting applications for this program in April. Note that PPP funds can reduce the size of SVOG grants.

In addition, ARPA state and local funding is expected to benefit non-profits. For example, if your organization lost a government grant due to COVID-19-related declines in revenue, you may be able to obtain new funding.

Do Not Delay
It is possible that Congress will extend the PPP deadline (and other ARPA dates). However, if your organization intends to apply, start the process immediately. Contact us for help and for additional information about ARPA provisions.