The Foraker Group

There is direct support for both nonprofit cultural organizations and state and local arts and humanities agencies, as well as economic relief provisions for independent contractors, “gig economy” workers and artists, entrepreneurs, and small businesses working in the creative economy.

Federal Arts Funding (Note: This is a supplement to their annual appropriations)

• $75 million for the National Endowment for the Arts (NEA)
  • 60/40 split with 40% distributed to statewide arts councils
  • The 60% will be eligible to organizations funded by the NEA in the past 4 years (69 programs in Alaska are eligible under this criteria)
• $75 million for the National Endowment for the Humanities (NEH)
  • 60/40 split with 40% distributed to statewide forums
• Special note: All these new fast-track grants will be for general operating support with no match.  
• $75 million for the Corporation for Public Broadcasting
• $50 million for the Institute of Library and Museum Sciences
• $25 million for the Kennedy Center
• $7.5 million for the Smithsonian

Alaska Update as of April 22

• NEA – Alaska State Council on the Arts will receive Alaska’s distribution.
  • Expecting $400,000
  • Creating an Arts and Culture Relief Fund for individual artists and organizations
  • Money not likely available until September
  • Alaska Arts and Culture Foundation is posting other funding opportunities available to artists and organizations
  • For more information go to www.akarts.org/covid19
• NEH- Alaska Humanities Forum will receive Alaska’s distribution
  • Expecting $400,000
  • There will be a local granting process and a national granting process
  • Local funding applications are available at akhf.org/grants – deadline is May 1, for more information contact Jann Mylet at jmylet@akhf.org
  • More information on the national granting process: NEH CARES: Cultural Organizations emergency relief grants provide up to $300,000 to cultural nonprofits to support a range of humanities activities across the fields of education, preservation and access, public programming, digital humanities, and scholarly research through December 31, 2020. Funding may be used for short-term activities that emphasize retaining or hiring humanities staff at cultural organizations across the country to maintain or adapt critical programs during the pandemic. The deadline to apply is May 11, 2020. Application guidelines are available on the NEH website. Applicants will be informed of funding decisions by June 2020.
• Corporation for Public Broadcasting
  • $112,000 each for 25 AK public radio stations and $260,000 each for four public television station

Community Development Block Grants, Small Business Administration, and Unemployment Insurance

• $5 billion for Community Development Block Grants to cities and counties. Arts groups should work directly with their mayors and local economic development offices for grant support.
• $350 billion for Small Business Administration (SBA) emergency loans of up to $10 million for small businesses—including nonprofits (with less than 500 employees), sole proprietors, independent contractors, and self-employed individuals (like individual artists)—to cover payroll costs, mortgage/rent costs, utilities, and other operations. These loans can be forgiven if used for those purposes. This new eligibility has been a key element of the CREATE Act we’ve been pursuing;
• $10 billion for Emergency Economic Injury Disaster Loans (EIDL) for loans up to $10,000 for small businesses and nonprofits to be used for providing paid sick leave for employees, maintaining payroll, mortgage/rent payments, and other operating costs;
• Expanded Unemployment Insurance (UI) that includes coverage for furloughed workers, freelancers, and “gig economy” workers. The bill also increases UI payments by $600/week for four months, in addition to what one claims under a state unemployment program.

Charitable Giving Tax Deduction

• An “above-the-line” or universal charitable giving incentive for contributions made in 2020 of up to $300. This provision will now allow all non-itemizer taxpayers (close to 90% of all taxpayers) to deduct charitable contributions from their tax return, an incentive previously unavailable to them. Additionally, the stimulus legislation lifts the existing cap on annual contributions for itemizers from 60 percent of adjusted gross income (AGI) to 100 percent of AGI for contributions made in 2020.

Congress is moving quickly to draft a fourth economic stimulus bill that will expand on the CARES Act that was enacted in late March.

We have been pleased that the original CARES Act included the nonprofit sector – a first in federal relief legislation. However, according to our partner the National Council of Nonprofits, many implementation challenges have arisen with federal agencies and private entities that undermine the intent of the law to provide economic relief for nonprofits.

Negotiations on the new legislation are going on right now. While the Council is working the issue with congressional leaders in Washington D.C., Foraker has been talking with the Alaska delegation about including certain provisions to benefit nonprofits. Those include:

1. Expanding access to credit by designating funding exclusively for nonprofits within the two principal loan programs of the CARES Act – the Paycheck Protection Program (PPP) and the Mid-Size Business Loan Program
2. Strengthening charitable giving incentives to encourage all Americans to help their communities through charitable donations during these challenging times
3. Increasing the reimbursement from 50% to 100% for nonprofits who self-insure their unemployment benefits to be on parity with employers participating in the state unemployment program
4. Increasing emergency funding by appropriating funds for targeted state formula grants and programs that can provide a rapid infusion of cash to nonprofit organizations that are partnering with state and local governments to protect vulnerable families and frontline responders

You can read more about these provisions here.

Although Congress is currently in recess, lawmakers will return in May and take up the new CARES legislation. You can contact our delegation and register your support on their websites.

• Senator Lisa Murkowski’s webpage
• Senator Dan Sullivan’s webpage
• Congressman Don Young’s webpage

We also encourage you to sign-up for bulletins from the National Council of Nonprofits. Council staff in Washington D.C. are on the front line advocating for nonprofits and sharing information as they receive it.

The recently enacted CARES Act – a federal government response to the coronavirus pandemic – includes provisions that encourage cash donations to nonprofit organizations in 2020.

Background

Benefits to taxpayers who do not itemize their taxes

As a result of the CARES Act, individuals who take the standard deduction (rather than itemizing) on their 2020 tax return can claim a brand new “above-the-line” deduction of up to $300 ($600 for a married couple) for cash donations to charitable 501(c)3 nonprofits. Donations to donor advised funds and certain organizations that support charities are not deductible. Normally, one must itemize on Schedule A to request a tax deduction for charitable donations.

Benefits to taxpayers who itemize their taxes

Those who do not take the standard deduction but choose to itemize on Schedule A of their tax return were formerly limited to deducting 60% of their adjusted gross income (AGI) for charitable cash contributions. The CARES Act raises the 60% of AGI limit for cash contributions made in 2020 to 100% of AGI. That means itemizers can deduct more of their charitable cash contributions this year, which will hopefully boost charitable giving. As with the new above-the-line deduction, donations to donor advised funds and supporting organizations are not included in the ruling.

Benefits to corporations that make charitable gifts

Corporations may deduct up to 25% of their taxable income in 2020 for cash contributions, up from the previous limit of 10%. In addition, corporate deductions for donations of food inventory, which formerly could not exceed 15% of the corporation’s income, has been increased to 25%.

Changes in Required Minimum Distributions

Donors aged 72 or older in 2020 who have retirement accounts like IRAs may still make qualified charitable distributions directly from their IRAs in 2020 (and avoid paying income tax on those distributions), although required minimum distributions have been waived until 2021.

Share this information with your donors

Organizations may be interested in providing an update to donors or prospective donors.  Foraker has created some suggested language for this purpose.  The language is not legal advice.  Donors and nonprofits are encouraged to seek final approval for any donation from their tax preparer or the IRS.

Suggested language for nonprofits to share with their individual donors

To encourage more charitable giving in 2020, the recently enacted government COVID-19 relief bill (the “CARES Act”) provides some tax relief for individual donors. If you take the standard deduction on your taxes, you may be able to claim a new ‘above-the-line’ deduction of up to $300 for cash donations to charitable nonprofits in 2020. There are also benefits to donors who itemize their taxes. Please consult your tax advisor for more information.

Suggested language for nonprofits to share with their corporate donors

To encourage more charitable giving in 2020, the recently enacted government COVID-19 relief bill (the “CARES Act”) provides some tax relief for corporate donors. Corporations may deduct up to 25% of taxable income, up from the previous limit of 10%.

We are excited to announce that Northrim Bank is helping us help you! Now more than ever, it is important that our services are accessible and available to all nonprofits, regardless of their current financial situation. We will continue to provide you with the latest information, advocate on behalf of the sector, provide training opportunities that will help you navigate this crisis, and stand beside you as you adapt your programs and services. We are deeply grateful to Northrim Bank for their generous gift. Read more about our partnership here.

Grant applications are being accepted for projects designed to improve rural Alaska health care systems, including emergency preparedness and pandemic response. The application period will close on April 24. Awards will be announced in early May. The program is supported by Premera Blue Cross Blue Shield of Alaska and is being administered by Rasmuson Foundation and The Alaska Community Foundation.