Finding financial relief and support (for individuals and institutions)
The museum sector is just beginning to assess the impact of closures, travel bans, cancellations of major events, and the implementation of physical distancing related to COVID-19 on both institutions and individual museum workers. AAM is monitoring emerging sources of assistance and documenting potential strategies for navigating the emerging financial crisis.
This section includes resources that may be useful in developing short-term and long-term fiscal strategies for supporting organizations, as well as information for museum workers who need their own financial plans for riding out the pandemic.
Directory of resources
- Equity considerations for crafting financial strategies
- Legislation related to COVID-19 and museums (updated 2/5/2021)
- Financial resources for nonprofits
- Examples of museum adaptations
- Long-term financial strategies
- Financial relief and resources for museum workers
- Additional Financial Resources
Equity considerations for crafting financial strategies
It is important to note that when crises arise, they make underlying structural inequities more visible. Museum leaders must understand both the historical context that might have led to the crisis, as well as differences in potential financial outcomes that specific communities, particularly the most vulnerable (the elderly, the chronically ill, People of Color, the uninsured) might face. Every museum professional and institution will be affected by COVID-19, but understanding which individuals and museums will be the most impacted—and how—will be critical for financial decision-making and moving the field forward. For more, please visit our resource page on centering diversity, equity, accessibility, and inclusion in a time of crisis.
Legislation related to COVID-19 and museums
On December 27, President Trump signed into law a $900 billion COVID-19 aid package in addition to $1.4 trillion fiscal year (FY) 2021 appropriations (Omnibus Appropriations and Emergency Coronavirus Relief Act, P.L. 116-260) that include major victories for museums.
The new law includes more than $284 billion for first and second Paycheck Protection Program (PPP) forgivable loans targeting small non-profits, including museums, with significant economic loss. And in a major win for museums, the small business provisions include $15 billion in dedicated funding for Grants for Shuttered Venue Operators, including museums, formerly known as “Save Our Stages.”
You can find the following information and resources below about upcoming webinars, eligibility and application processes. We are continuing to review the new law and expect many federal guidelines to come out in the following weeks that will provide clarification and answers to remaining questions. We focus below on the Paycheck Protection Program, Shuttered Venue Operator Grants, omnibus appropriations, and other issues of interest to museums as nonprofits.
The Alliance would like to express its profound gratitude to Senator Chuck Schumer (D-NY) who championed the effort to include museums in the Shuttered Venue Operators Grants. We worked closely with his staff and other champions on Capitol Hill on this effort to include museums in COVID-19 relief legislation for the past several months and around the clock especially in the last few weeks of 2020. We also are grateful for you–our museum advocates–who leapt into action at critical points and compelled your legislators to support museum funding. (Learn more about the package, including how to thank your legislators, in the latest Alliance Advocacy Alert.)
Paycheck Protection Program
Are you looking for more information to navigate evolving Federal and state guidelines and relief legislation on operations for your museum? Join a free webinar that was recorded on February 2, AAM in partnership with Raffa – Marcum’s Nonprofit & Social Sector Group, to learn from Marcum’s nonprofit experts about updates to COVID-19 relief legislation, PPP second draw, Shuttered Venue Operators Grants, eligibility, forgiveness, which opportunities to pursue, and more. Recording and slides available here. (Note that if you did not register for the event you will need to complete a form to view the recording and slides.)
With such great interest in this topic, Marcum created a Q&A document to help address the webinar attendees’ inquiries and answered with information available at present.
Recent Marcum Webinar, COVID Relief IV: A Deeper Dive, January 7, 2021 recording available here.
The reforms to the Paycheck Protection Program are more restrictive than the CARES Act. Notably, the new law authorizes a Second Draw of PPP loans for qualified employers. Charitable nonprofits (as well as for-profit businesses) may qualify for a Second Draw loan of up to $2 million only if they a) employ 300 or fewer employees and b) experience a decline in gross receipts of 25% in one of the four quarters in 2020 compared to the same quarter in 2019. NOTE: The deadline to submit applications for second draw (or the first draw for those who never received a PPP loan) round is March 31, 2021.
In the area of PPP loan forgiveness, the legislation expands the types of expenses eligible for forgiveness to include the costs of personal protective equipment and workplace modifications. It also authorizes a short-form approval of forgiveness for loans of $150,000 or less. The law also reverses Small Business Administration policy by repealing retroactively a requirement that Economic Injury Disaster Loan Grants recipients must pay back $10,000 emergency grants even when PPP loans were forgiven.
New SBA Guidance:
The Small Business Administration on January 6, 2020 released the following guidance that will enable eligible nonprofits, including museums, to take advantage of the new law.
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act (January 6)
- Interim Final Rule on Second Draw Loans (January 6)
- Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide, Small Business Administration, January 19, 2021.
Key PPP updates include:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
- The PPP provides greater flexibility for seasonal employees;
- Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
- Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
- Has no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
New SBA Announcement:
The SBA on January 8, 2020 in consultation with the Treasury Department, announced that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.
On January 15, 2021, the U.S. Small Business Administration, in consultation with the U.S. Treasury Department, re-opened the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications. The portal will fully open on Tuesday, January 19, 2021 to all participating PPP lenders to submit First and Second Draw loan applications to SBA.
Shuttered Venue Operator Grants
**NEW – SBA Issues Shuttered Venues FAQ: On Jan. 27 (and subsequent updates), the U.S. Small Business Administration issued much anticipated information about the Shuttered Venue Operators Grant (SVOG) program, Section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) signed into law on Dec. 27, 2020, which includes answers to frequently asked questions about the program relevant for museums. The SBA noted that the FAQ will be updated as new information comes available and additional program details are finalized. The FAQ includes information about eligibility, definitions, forthcoming application, use of funds, business size/employees, revenue and other issues.
**NEW – In addition to the FAQ, the SBA posted this helpful matrix on Feb 5: Cross Program Eligibility on SBA Coronavirus Relief Options: A summary of criteria that must be met when considering different funding options, that compares the different relief options between PPP applicants vs. SVOG applicants vs. EIDL applicants.
Did you miss the SBA’s Shuttered Venue Operators Grant webinar on January 14, 2021? It’s been recorded and is currently available on SBA’s YouTube channel. Watch this archived webinar for a preliminary overview of the Shuttered Venue Operators Grant program. Watch now
Following are several highlights:
- The application process is still being designed and has not opened, so stay tuned for more updates by checking www.sba.gov/coronavirus. A specific SVOG page is here: Shuttered Venue Operators Grant (sba.gov)
- As the SBA continues to work on full guidance, it will soon post online a top-level matrix comparing PPP to Shuttered Venue Operators Grants.
- Once the grant window opens, grants will be processed “in order of priority.” (Full details still to come.)
- In advance of opening the grant-making process, SBA will host future webinars, including a pre-application information session.
In the meantime, SBA advises interested applicants:
- Begin assembling basic information about prior monthly revenue information and list of potential uses of Shuttered Venue Operator grant funds.
- Keep in mind that, once the grantmaking process opens, local SBA offices may be a helpful resource in preparing applications.
- Send questions to SVOgrant@sba.gov
As SBA moves forward, you can stay up to date on the Shuttered Venue Operators Grants by following the SBA on Twitter, subscribing to SBA’s e-newsletter, and visiting www.SBA.gov. More specifically, the best source of accurate information for all economic aid programs administered by the SBA is / will be at www.SBA.gov/coronavirusrelief. The Alliance is working closely with the SBA, and communicating the concerns and questions of the museum field, as they roll out this grant program.
IMPORTANT NEXT STEPS:
In the meantime, the SBA recommends that potential applicants, including museums, take some preparatory actions to be positioned to move quickly when the process opens although no timeline has been indicated. These include registration in the System for Award Management (SAM) at www.sam.gov. You can find instructions for grantees here. The SBA also is recommending they start organizing their financial statements, tax documents, and other governing documents (e.g. articles of incorporation) to be responsive to any data required to support the application.
The new law provides $15 billion nationally for independent live venue operators, independent movie theaters, and cultural institutions such as live performing arts organizations and museums that have been significantly impacted by the economic effects of the pandemic. The legislation will provide temporary relief not only to the venues, but also to the employees and businesses that support them.
Specifically, the COVID relief package will create a new Small Business Administration (SBA) grant program which independent live venue operators, promoters, producers, talent representatives, independent movie theaters, and museums are eligible for. To be eligible, an entity must have experienced at least 25% lost revenue due to COVID-19. The SBA grants are designed to provide 6 months of financial support that could be used to keep employees paid and museums that are open stay open for business.
Specifically, the new program includes the following components:
- Create a new grant program at the Small Business Administration to provide assistance to independent live venue operators, promoters, producers, talent representatives, independent movie theaters, and museums.
- Permit recipients to use grants for various costs, including those associated with COVID-19:
- Rent, utilities, mortgage obligations, payments to contractors, regular maintenance, administrative costs, taxes, operating leases; and
- PPE procurement, capital expenditures related to meeting state, local, or federal social distancing guidelines.
- Grants are narrowly targeted and appropriately calculated to provide 6 months of operating assistance for small and independent live venue operators and their industry partners.
- Grants are equal to the lesser of 45% of gross revenue during 2019; or $10 million.
- To ensure the hardest hit of eligible applicants receive assistance, there are two priority application periods. The first 14 days, only eligible entities that have lost more than 90% of gross revenue can apply. The next 14 days, only eligible entities that have lost more than 70% can apply. A reserve of 20% of overall appropriated funds, $3 billion out of the $15 billion provided, will remain available for all other eligible entities to apply for after 28 days.
- There is a $2 billion set-aside of funds for eligible entities with 50 or fewer employees to ensure smaller applicants are not left out.
- An entity is still eligible for a grant if they have received a PPP loan prior to implementation of the program, but the entity may not receive a PPP loan and a grant after implementation of the program.
Shuttered Venue Operator Grants (Section 324)
Summary of Selected Provisions for Additional Detail from Omnibus Appropriations and Emergency Coronavirus Relief Act, P.L. 116-260 (pages 201- 230 of law [p. 2124-2153 of PDF]
Eligibility and Definitions:
The term ‘‘eligible person or entity’’ includes museums that meet the following requirements:
- It was fully operational on February 29, 2020 and has gross earned revenue during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrates not less than a 25 percent reduction from the gross earned revenue during the same quarter in 2019.
- As of the date of the grant the museum is open or intends to reopen.
- The museum has the following characteristics:
- Serving as a museum as its principal business activity.
- Indoor exhibition spaces that have been subjected to pandemic-related occupancy restrictions.
- At least 1 auditorium, theater, or performance or lecture hall with fixed audience seating and regular programming.
- The museum does not have, or is not majority owned or controlled by an entity with, any of the following characteristics:
- Being an issuer, the securities of which are listed on a national securities exchange.
- Receiving more than 10 percent of gross revenue from Federal funding during 2019, excluding disaster assistance.
- The museum is not majority owned or controlled by an entity with more than 2 of the following characteristics:
- Owning or operating museums in more than 1 country.
- Owning or operating museums in more than 10 States.
- Employing more than 500 employees as of February 29, 2020.
- The museum did not receive a PPP loan on or after the date of enactment of this Act.
- The term ‘‘museum’’— has the meaning given the term ‘‘museum’’ by the Museum and Library Services Act (i.e., the legislation authorizing IMLS, Sec. 9172) and shall not include any entity that is organized as a for-profit entity.
(Sec. 9172. The term “museum” means a public, tribal, or private nonprofit agency or institution organized on a permanent basis for essentially educational, cultural heritage, or aesthetic purposes, that utilizes a professional staff, owns or utilizes tangible objects, cares for the tangible objects, and exhibits the tangible objects to the public on a regular basis. Such term includes museums that have tangible and digital collections and includes aquariums, arboretums, botanical gardens, art museums, children’s museums, general museums, historic houses and sites, history museums, nature centers, natural history and anthropology museums, planetariums, science and technology centers, specialized museums, and zoological parks.)
- An initial grant shall be in the amount equal to the lesser of the amount equal to 45 percent of the gross earned revenue of the eligible person or entity during 2019 or $10,000,000. A supplemental grant shall be in the amount equal to 50 percent of the initial grant.
- First Priority in Awarding Grants.—During the initial 14-day period the SBA shall only award grants to an eligible person or entity with revenue, during the period beginning on April 1, 2020 and ending on December 31, 2020, that is not more than 10 percent of the revenue of the eligible person or entity during the same period in 2019, due to the COVID–19 pandemic.
- Second Priority in Awarding Grants.—During the 14-day period immediately following the 14-day period described in clause (i), the SBA shall only award grants to an eligible person or entity with revenue that is not more than 30 percent of the revenue of the eligible person or entity during the same period in 2019, due to the COVID–19 pandemic.
- Grants After Priority Periods.— After the end of the initial 28-day period during which the Administrator awards grants under this paragraph, the SBA may award an initial grant to any eligible person or entity.
- Supplemental Grants. – The SBA may make a supplemental grant to an eligible person or entity that receives a grant if, as of April 1, 2021, the revenues of the eligible person or entity for the most recent calendar quarter are not more than 30 percent of the revenues of the eligible person or entity for the corresponding calendar quarter during 2019 due to the COVID-19 pandemic. However, the SBA may not award a supplemental until it has completed processing each application for an initial grant that is submitted by an eligible person or entity on or before the date that is 60 days after the date on which the SBA begins accepting such applications.
- Determination of Revenue.— any amounts received under the CARES Act shall not be counted as revenue; the SBA shall use an accrual method of accounting for determining revenue.
- Use of Funds.— Amounts received may be used for costs incurred during the period beginning on March 1, 2020, and ending on December 31, 2021.
An eligible person or entity may use amounts received for—
- Payroll costs;
- Payments on any covered rent obligation;
- Any covered utility payment;
- Scheduled payments of interest or principal on any covered mortgage obligation (which shall not include any prepayment of principal on a covered mortgage obligation);
- Scheduled payments of interest or principal on any indebtedness or debt instrument (which shall not include any prepayment of principal) incurred in the ordinary course of business that is a liability of the eligible person or entity and was incurred prior to February 15, 2020;
- Covered worker protection expenditures;
- Payments made to independent contractors, as reported on Form–1099 MISC, not to exceed a total of $100,000 in annual compensation for any individual employee of an independent contractor; and
- Other ordinary and necessary business expenses, including maintenance expenses; administrative costs, including fees and licensing costs; State and local taxes and fees; operating leases in effect as of February 15, 2020; payments required for insurance on any insurance policy; and advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production, concert, exhibition, or comedy show, except that a grant under this section may not be used primarily for such expenditures.
Other Issues of Interest to Museums: Omnibus Appropriations
Along with the COVID-19 economic relief is a $1.4 trillion FY 2021 appropriations package that includes a $2 million increase for a total of $40.5 million for the Office of Museum Services at IMLS, and $5.25 million increases for a total of $167.5 million each for the National Endowment for the Arts and the National Endowment for the Humanities.
Other Issues of Interest to Museums as Nonprofits
What’s in the New COVID Relief Law for Nonprofits? Nonprofit Town Hall briefing hosted by the National Council of Nonprofits on Wednesday, January 13 at 3:00 pm Eastern. Recording and PDF slides here.
Nonprofit Provisions in COVID Relief Legislation – Summary chart with link to the new law and cites to sections and page numbers, including issues on Unemployment Insurance & Self-Insured Employers, Charitable Giving Incentives, Employee Retention Tax Credit (ERTC), PPP Loan Forgiveness, Economic Injury Disaster Loan (EIDL) and more.
(Updated January 19, 2021)
Congress has now completed three rounds of major legislation to address the COVID-19 pandemic and resulting health and economic crises. Below are brief summaries highlighting information relevant to museums and museum professionals. Note that this information represents current understanding and is not intended as legal or financial advice. Additional details may become apparent through further analysis and as federal guidance is released and updated. We will continue to add information here as appropriate.
Access the recording and slides from the April 3 webinar on “Crisis Management in Museums” here.
Updated on 6/8/2020.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 748), passed March 27
This massive COVID-19 economic relief bill—an estimated $2.2 trillion package—includes important support for museums, thanks to the outstanding and tireless work of museum advocates. The Coronavirus Aid, Relief, and Economic Security (CARES) Act included $500 billion in economic stabilization funds, $274 billion in emergency appropriations, and other measures aimed at combating the COVID-19 health care and economic crisis. It also included significant expansions in small business lending, unemployment insurance, tax relief to individuals and employers, and health care measures.
The Institute of Museum and Library Services (IMLS), the National Endowment for the Humanities (NEH) and the National Endowment for the Arts (NEA) received $200 million collectively ($50 million for IMLS and $75 million for each endowment). All three agencies are authorized to provide direct grants to support museum operations, and matching requirements are waived.
- IMLS Authorizes New Grant Flexibilities for Museums with Open Grants
- IMLS: Federal Government Invests $50M in Museums, Libraries to Address Digital Divide During COVID-19
- $15 Million in IMLS CARES Act Grants Now Available for Museum and Library Services
- Recordings are available on-demand on the IMLS website.
- NEH Receives $75 Million to Distribute to Cultural Institutions Affected by Coronavirus
- NEH Offers Emergency Relief Funding to Cultural Institutions Affected by Coronavirus (Application Deadline was May 11)
- National Endowment for the Arts to Distribute $75 million in Relief Aid to Arts Organizations in Need
- National Endowment for the Arts Announces CARES Act Funding to Support Arts Jobs and Help Sustain Arts Organizations (Application Deadline was April 22)
AAM collaborated with others in the nonprofit sector to make sure nonprofit organizations, including museums, are eligible for small business loans (with forgiveness provisions) and that the legislation include charitable giving incentives. This article from the National Council of Nonprofits summarizes the key provisions relevant to the nonprofit sector, as did their March 31 program on “Federal Coronavirus Relief Bills: What Do They Mean for Nonprofits?” (webinar recording and slides). Their April 7 program (recording) and additional regularly-updated resources are now available.
The CARES Act includes three different loan programs designed to help organizations keep their workforce employed during the Coronavirus (COVID-19) crisis:
- Paycheck Protection Program (also known as Small Business Administration 7(a) Loans) provides loans up to $10 million for eligible nonprofits with 500 or fewer employees, permitting them to cover costs of payroll, operations, and debt service, and provides that the loans be forgiven in whole or in part under certain circumstances. For more information, including eligibility, how to apply, loan details, forgiveness, and other assistance visit the Small Business Administration’s Paycheck Protection Program page. The U.S. Department of the Treasury has posted additional information, including an overview and a sample application for borrowers. On April 15, 2020, SBA issued an interim final rule: Business Loan Program Temporary Changes; Paycheck Protection Program outlining the key provisions of SBA’s implementation of the program in formal guidance and requests for public comment due May 15. AAM’s comments here. (On April 24, a $484 billion coronavirus relief bill to recapitalize SBA loan programs, as well as provide funding for expanded COVID-19 testing and support for hospitals, was signed into law, including an additional $310 billion for small business relief through the SBA’s Paycheck Protection Program. $60 billion of these new funds will be reserved for smaller lending institutions, such as credit unions, community banks, Community Development Financial Institutions and Minority Depository Institutions. The Small Business Administration resumed accepting PPP loan applications on Monday, April 27 at 10:30AM EDT.)
- Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program.
- Safe Harbor: In mid-May the Treasury Department announced a new safe harbor for loans of $2 million and under where they are automatically deemed to have made the required certification in good faith. Please see this frequently updated Treasury FAQ Question 46: “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?” In short, anything below $2 million will be deemed to have made the required certification in good faith. Over $2 million: If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness.
- Loan Forgiveness: Treasury and the Small Business Administration have released long-awaited guidance on loan forgiveness under the Paycheck Protection Program. The Interim Final Rule on loan forgiveness attempts to clarify numerous questions borrowers have and complements the loan forgiveness application and instructions announced by SBA on May 15. The National Council of Nonprofits prepared an Analysis of the Loan Forgiveness Interim Final Rule. Public comments were due on or about June 25. Fiscal Strength for Nonprofits (FMA) produced a Paycheck Protection Program Toolbox designed to support nonprofit organizations as they navigate the Paycheck Protection Program. The FMA also has the PPP Forgiveness Racial Equity Initiative (PPP FREI) to provide customized advisory support around navigating the PPP forgiveness process to nonprofit organizations led by people who self-identify as Black, Indigenous and/or People of Color (in the ED/CEO role), and nonprofit organizations in which the staff person managing the PPP forgiveness process self-identifies as Black, Indigenous, and/or a Person of Color.
- Paycheck Protection Flexibility Act: On June 5, 2020, the president signed into law the Paycheck Protection Flexibility Act (H.R. 7010). The new legislation modifies some of the terms related to Paycheck Protection Program (PPP) Loan Forgiveness. The main provision is a tripling of the time allotted for PPP loan recipients to spend funds and qualify for forgiveness. This article is an update to Marcum’s previous summary about the Loan Forgiveness Application and includes the previous rules along with the changes in the proposed new law.
- Economic Injury Disaster Loans (EIDL) and Loan Advances (SBA 7(b) loans): Eliminates creditworthiness requirements and appropriates an additional $10 billion to the EIDL program so that eligible nonprofits with 500 or fewer employees, as well as self-employed workers, can get loan advances of up to $10,000 within three days of a successful application. The loan advance provides economic relief to organizations that are currently experiencing a temporary loss of revenue. The loan advance is treated as a grant and will not have to be repaid.
The SBA’s regular EIDL program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans are not forgivable (except for the $10,000 advance); the interest rate for nonprofits is 2.75%. Start your application here.
- Main Street Business Lending Program/Mid-size Business Loan Program: On April 9, the U.S. Treasury has released information on the CARES Act Main Street Business Lending Program. (Midsize Loans: Nonprofits employing more than 500 employees have not received forgivable loan support since the beginning of the pandemic. The House-passed HEROES Act on May 15 that includes a loan program with narrow forgiveness opportunities, but the bill was declared dead on arrival in the Senate. A separate bill, the Help Charities Help Communities Act, introduced by Representative Beatty (D-OH), would create a forgivable loan program for nonprofits with between 500 to 10,000 employers. The bill has been endorsed by numerous national nonprofits, including AAM, with affiliates that currently are not eligible for the Paycheck Protection Program.)
Note that organizations with 500 or fewer employees can apply for both the Paycheck Protection Program and an Economic Injury Disaster Loan but cannot receive two loans for the same expenses. The 500-employee limit is calculated using SBA guidance (the average number of people employed for each pay period over the business’s latest 12 calendar months; any person on the payroll must be included as one employee regardless of hours worked or temporary status).
The Senate Small Business & Entrepreneurship Committee offers this guide on the SBA provisions here. Also see the National Council on Nonprofit’s helpful chart for an overview of the loans available for nonprofits.
Other relevant provisions in the CARES Act include:
- Charitable Giving Incentives: Includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers who do not itemize) for total charitable contributions of up to $300. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the bill raises the annual limit from 10 percent to 25 percent. (Section 2205)
- Employee Retention Payroll Tax Credit: For organizations that do not qualify for or receive a loan through the Paycheck Protection Program, this creates a refundable payroll tax credit of up to $5,000 for each employee per quarter on the payroll when certain conditions are met (e.g., operations were fully or partially suspended due to a governmental order that limited commerce, travel, or group meetings due to COVID-19; gross receipts declined by more than 50% when compared to the same quarter in a prior year). Learn more here.
To learn more about applying for relief funds—for individuals, small nonprofits, and large nonprofits—made available through the CARES Act, visit this helpful guide from Independent Sector. You can also access the full presentations and recordings of the April Independent Sector webinars Navigating the CARES Act and What’s Next for COVID-19 Relief for Nonprofits? online.
Families First Coronavirus Response Act (H.R. 6201), passed March 18
The Families First Coronavirus Response Act (H.R. 6201), with an estimated cost of $104 billion, goes into effect April 1, 2020. This act responds to the growing health and economic crises with policies addressing unemployment insurance, tax credits for affected employers, paid sick and family leave for certain employees, free COVID-19 testing, nutrition assistance programs.
This article from the National Council on Nonprofits summarizes employment-related and other major provisions, including:
- Two Weeks of Emergency Paid Sick Leave: Requires employers with fewer than 500 employees, including nonprofits, to provide employees two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay (up to $511/day and $5,110 over the two-week period) if the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms. Also requires two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular pay (up to $200/day and $2,000 over the two-week period) if an employee is unable to work because of a bona fide need to care for an individual subject to quarantine or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19.
- Additional Ten Weeks of Emergency Family and Medical Leave: Requires employers with fewer than 500 employees, including nonprofits, to provide up to an additional ten weeks of emergency family and medical leave (following the initial two weeks of emergency paid sick leave) at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
The U.S. Department of Labor has shared fact sheets on employee rights and employer requirements, as well as initial guidance on the act—addressing questions such as how to determine if an employer has fewer than 500 employees, how to calculate leave hours and pay rate, small business exemptions, much more. The DOL continues to update and revise this guidance. For the latest from the DOL, visit their page on COVID-19 and the American Workplace.
- Refundable Payroll Tax Credits: Employers paying for the mandated paid leave are entitled to claim a refundable tax credit.
The U.S. Treasury Department, Internal Revenue Service (IRS), and U.S. Department of Labor (Labor) have announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits provided under the Families First Coronavirus Response Act designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing coronavirus-related leave to their employees. More information on this relief to employees and small and midsize businesses (including nonprofits) is available here.
- Emergency Unemployment Insurance Stabilization and Access Act: Establishes a new act to provide $1 billion for emergency grants to states for processing and paying unemployment insurance benefits.
Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074), passed March 6
Other relief funds
Giving Compass and the National Center for Family Philanthropy (NCFP) have compiled a vetted list of COVID-19 relief funds. As of March 24, 2020, this list includes more than 90 funds established to address immediate and long-term needs related to COVID-19. Also, monitor this spreadsheet of relief funds being compiled by the Council on Foundations.
A large number of foundations recently created and signed a pledge to provide their grantees with “the flexibility and grace to respond quickly and confidently in this critical moment.” These foundations have also expressed a willingness to provide funding for organizations they do not currently fund. The commitments of those foundations signing the pledge include:
- Loosening or eliminating restrictions on current grants. (This can include converting project-based grants to unrestricted support; accelerating payment schedules; and not holding grantees responsible if conferences, events, and other project deliverables must be postponed or canceled.)
- Making new grants as unrestricted as possible, so nonprofit partners have maximum flexibility to respond to this crisis. They will also support organizations created and led by the communities most affected that they may not fund currently.
- Reducing what they ask of nonprofit partners such as postponing reporting requirements, site visits, and other demands on their time during this challenging period.
Financial resources for nonprofits
The DeVos Institute for Arts Management at the University of Maryland has created a list of some practical steps during a time of uncertainty, including actions to take with funders, vendors, ticket holders, creditors, and lenders.
Considerations on marketing during COVID-19 closures, from Colleen Dilenschneider of IMPACTS research.
The Chronicle of Philanthropy has published Help for Nonprofits During the Coronavirus and Uncertain Economic Times, a free selection of articles from its archives. This collection includes essays on teleworking, engaging major donors, helping the vulnerable, and coverage of how foundations are responding to the need for COVID relief.
The Innovation in Nonprofit Finance Blog provides helpful information in this Financial Leadership in the Face of Impossible Choices post.
Examples of museum adaptations
Some museums are converting upcoming fundraising galas into digital events:
The Hermann-Grima + Gallier Historic Houses in New Orleans is moving their annual Wine Fête online, complete with silent auction, and encouraging attendees to participate from home (with a glass of wine, of course).
The Tenement Museum’s virtual gala, held the evening of April 28, offered attendees a short, informal digital program and the option of receiving “a Lower East Side box dinner when things return to normal.”
The Japanese American National Museum’s virtual gala included a Livestream program during which they will announced the winner of their raffle (the prize is a 2020 Lexus RX 450h!), held an online auction, and solicited donations for their education programs.
Long-term financial strategies
This year’s edition of the Center for the Future of Museum’s annual forecasting report investigates the trends destabilizing traditional income streams, documents how museums are optimizing existing revenue, and highlights emerging forms of support. Museums can use the report to educate stakeholders on the challenges of funding a nonprofit museum, as a framework for assessing existing income streams and identifying areas for improvement, and as a springboard to building diverse forms of income to support their work.
Financial relief and resources for museum workers
This collection of resources is designed for museum workers who need their own financial plans for riding out the pandemic, whether they are working but faced with the need to take care of themselves or family members, or currently unemployed.
AAM is a proud partner of MuseumExpert.org which helps pair out-of-work museum staff with prospective employers.
Museum workers who are still employed should familiarize themselves with the provisions of the Families First Coronavirus Response Act: Employee Paid Leave Rights. Generally, the act stipulates how employees of covered employers are eligible for paid sick leave and paid expanded family and medical leave. (Covered employers are companies with up to five hundred employees, though businesses with fewer than fifty employees can apply for exemption for some of the provisions of the act.) This short video from volunteer Lawyers for the Arts of Massachusetts provides an overview of unemployment and developments under the CARES Act.
The Department of Labor provides an overview to Applying for Unemployment Insurance Benefits. CNN has created its own Guide to Filing for Unemployment Benefits that is written in plain English and addresses some practical considerations about accessing benefits during the crush of applications resulting from the current spike in unemployment. Museum Workers Speak has also created a Museum Workers Relief Fund to help those adversely affected by the pandemic.
A free tool called Hello Landlord, from legal experts, helps tenants quickly draft a letter to their landlord to explain why they haven’t paid—and outline their right to avoid evictions under the CARES Act.
Many museum workers are working artists as well. This article from Artnet summarizes Emergency Grants, Medical Funds, and Other Resources to Help Artists in Need of Aid. Fractured Atlas is also maintaining a list of Emergency Resources for Artists in the Wake of COVID-19.
Fast Company’s “9 Steps to Take Right Now If You’ve Been Laid Off” covers some financial actions, but also things to do to maintain your psychological health, and prepare to begin a job search, if that becomes necessary.
In this stressful time, self-care is more important than ever. The Anxiety and Depression Association of America is offering Helpful Expert Tips and Resources for Coronavirus Anxiety. Shine has compiled a toolkit on how to Care for Your Coronavirus Anxiety. This might also be a good time to download a copy of Seema Rao’s Objective Lessons: Self-care for Museum Workers (which is free on Kindle Unlimited). The Alliance blog recently posted Seeking Self-Care Solutions, for COVID-19 and Beyond.
Additional financial resources
- AAM’s Center for the Future of Museums recently published:
- ArcheoAnalytics posted to Medium a list of ways to produce revenue using digital revenue models.
- Check out the Alliance’s compiled resources and tip sheets on:
- The COVID-19 Toolkit from 20 Degrees is a suite of materials that a nonprofit leader needs in the next 60 days to plan, pivot and manage through the COVID-19 crisis
- Americans for the Arts has created a dashboard on the impact of COVID-19 on the arts and culture sector.
- Arts Administrators of Color has Arts Leaders of Color Emergency Fund with lots of useful information and resources.
- Campbell & Company provide insights on Using Digital Engagement to Reach Donors During the COVID-19 Outbreak.
- Candid, a Foundation Center and GuideStar company, created a useful resource of funding stats during this time of uncertainty.
- The Chronicle of Philanthropy provides useful articles on a number of issues related to COVID-19:
- The DeVos Institute offers Practical Steps During a Time of Uncertainty with tips to help remain financially stable.
- DEXIBIT presented COVID-19 Response resources for visitor attractions, to discuss impacts, approaches, and strategies for managing visitor attractions through the pandemic.
- FEMA has created the Pandemic Influenza Continuity of Operations Annex Template to help institutions prepare for continuing operations during the pandemic.
- Fidelity Charitable wrote an article about COVID-19 and philanthropy: How donor behaviors are shifting amid pandemic.
- Free Management Library offers the Basic Overview of U.S. Nonprofit Financial Management which discusses the processes and key terms.
- The Gaylord and Dorothy Donnelley Foundation have established a Collections Emergency Relief Fund to provide immediate support to smaller collections organizations in both Chicago and the Lowcountry.
- Giving Compass has a list of Coronavirus and COVID-19 Response and Relief Funds.
- GivingTuesday is offering microgrants to “innovative approaches to catalyzing generosity, empathy, equity and justice” under its Starling Collective project.
- Harvard Business Review (HBR) looks at the legal obligations companies face around coronavirus. And the eight critical questions employers should be asking as they prepare for or respond to the spread of the virus.
- Huntington T. Block Insurance offers this resource on Managing a Black Swan Event.
- The League of American Orchestras developed a set of resources for its members including a link to some potential funding resources to help should the need arise.
- McKinsey & Company’s article on COVID-19: Implications for business provides insights on the next “normal”.
- The National Endowment for the Arts has a list of COVID-19 Resources for Artists and Arts Organizations.
- The Nonprofit Finance Fund has developed COVID-19 Tools and Resources for Nonprofits including a cash flow tool, scenario template, and other resources.
- Nonprofit Quarterly published this article on A Year of Budget Revisions Lies ahead for Many Nonprofits which discusses the way nonprofits will need to pivot on budgeting following the COVID-19 pandemic.
- Propel Nonprofits has a useful list of resources for nonprofits with finance-related links, including a cash flow template.
- The Society for Human Resource Management (SHRM) provides resources and advice on dealing with communicable diseases in the workplace, including Coronavirus.
- Legal advice firm Venable conducted a webinar on COVID 19 – What Your Nonprofit Needs to Know: Legal Issues Arising from the Novel Coronavirus, which discusses insurance-related issues nonprofits might face as well as a workflow to determine whether or not to cancel events.
Disclaimer: Please note that the information provided here is for informational purposes only and not for the purpose of providing legal advice. For information specific to your institution or situation, you should seek legal advice from counsel in your relevant jurisdiction.