The Foraker Group

We know many of you are facing financial uncertainty right now. Our finance team is available to help guide you if you need help scenario planning or walking through a loan application. We also are adapting our fundraising services to your needs. We can work together to help focus your energy and get your organization on better footing. We are offering immediate, short-term fund development consultations and mentoring to help your organization during the COVID-19 crisis.

Our team of fundraising experts are ready to help you:

• Look at your donor data and help you prioritize the donors that you may want to reach out to now
• Develop ways to build a relationship with your donors, even if you don’t know them
• Maintain connections with your corporate donors and sponsors
• Re-imagine your events in this era of physical distancing
• Craft messaging appropriate to the times, including asks
• Identify ways your board can lead effectively during this crisis
• Prioritize your fund development work and help you decide what you should be doing right now

The first 30 minutes of consultation is free. After that, the fee is $165/hour or $110/hour for Foraker Partners. If you have questions or would like to set an appointment with a fund development consultant, get in touch with us here.

The Alaska Community Foundation has created the Alaska COVID-19 Response Fund — Rapid Response Grants that provide critical services to communities, families, and individuals throughout Alaska who are struggling with health and economic issues related to COVID-19 pandemic, and those that are essential for the quality of life in Alaska communities. The application deadline is April 10. For a list of other local funders who have created response funds, see our COVID-19 Response Resources page.

Foraker is teaming up with The Alaska Small Business Development Center for a daily webinar briefing to ensure you are getting information you need about emerging federal relief programs. SBDC business advisors and Foraker staff will be available to answer your questions. The briefings will take place weekdays at 2:00 pm. Register once and attend as frequently as you need. Sessions will cover the SBA Paycheck Protection Program, SBA Economic Injury Disaster Loans, Emergency Bridge Loan/Economic Injury Disaster Advance Loan, and more. There is no fee to attend these webinars.

Much will be written one day about this time in our lives. We are already starting to hear how this generation might be called the Covidials or the Coronials since the world as they know it (and we know it) will forever be altered. Social media is spreading expressions of hope that we don’t “go back” to whatever it was we thought was normal, because right here, right now, people are bringing the best of themselves to their communities.

And through it all, our nonprofit community is figuring out how to navigate this new landscape in dramatically different ways – quickly shifting delivery methods, some temporarily closing to the public, and many choosing paths somewhere in between. I salute you. We are seeing acts of heroism from our healthcare workers on the front lines, our human service professionals who are tending to our most vulnerable, and our teachers who have dropped into a new universe of engagement – each with little time to prepare. These are likely the most challenging times we will endure in our careers as we make incredibly hard decisions about how to adapt, how to stay open or closed, how to retain or let staff teams go, how to do what we need to do with fewer or no volunteers and fewer or limited funds. All with a very unknown future. I am with you in this. We simply do not know.

And herein lies one of the greatest challenges we must face from one call to the next, from one request to the next – that’s the struggle of needing to know.

Some of us have a high tolerance for ambiguity, while others do not. Regardless, the desire to know is real for each of us as humans – in our own way. That need to know has equated into days that feel endless and is compounded by also not knowing how long we will need to endure the vastness of it. This past week someone reminded me what day it was. I was both grateful and aghast. I really didn’t know. I figured out pretty fast that this was a common experience and it became a reason to share an anxious laugh. If this is just the first few weeks for us in Alaska, what will it feel like four weeks from now or four months from now? My need to know and your need to know will have to give way to something else. What other tools can we use instead – when knowing is not possible?

We all have these tools in our leadership toolbox. Let’s remember them and use them to get through this together.

1. Use core values – Our values are our compass. Our guide. Not just for good times when it is convenient, but when it isn’t convenient, and urgency and pressure are high. This is exactly the time to hold steadfast to core values. In a time with little clarity – your values shine through with the utmost certainty. Your budget, your plans, your staffing options, the relief options all present choices. How you choose to implement them with the humans in your world (staff, board, volunteers, clients, partners, peers) is all about values. Start your most difficult conversations from this place, and lead from there.
2. Make prudent decisions – The Alaska statute governing nonprofit board service is succinct. In essence it says that the board’s job is to “make a prudent decision that an ordinary person would make under similar circumstance.” Note it does not ask board members to know the unknowable. It asks the board – as a whole, with one voice – to make the best decision they can given all the information they have. Of course, it also says “similar circumstance,” which we can all agree in this case does not help us much. So, board members, your executive is about to ask you to help make hard decisions. And if you don’t have staff, then I hope you as board officers are leading this conversation. This is your job – not to predict the future of this epidemic, but to make the best possible decisions you can with the information you have or can get. This is still hard. It will take effort to get the information. There are resources, but in the end, it will be the best decision you can make. Let’s all be okay with that and offer each other some gratitude and peace in the process.
3. Know mission is bigger than one institution – In so many ways, this time is an opportunity to once again see in as many ways as you can that mission was always bigger than your institution. We have always been in this together. When we serve children, or the homeless, or our seniors, or those in need, it was and is about many groups, and people, and boards, and funders, and leaders. It simply can’t be about only one of anything right now. It never was, and it should never be. So, with all your might, let this moment be about a bigger conversation in your board room, in your fundraising plan and implementation, and in your personal leadership. Some institutions may be unable to keep going as this virus passes through our state but know that the goal is about preserving missions not institutions. There are options and it will take us all to implement them.
4. Seek normalcy – In uncertain times, what can bring comfort is something we remember as being normal. A regularly scheduled meeting, a routine that can still be honored, a connection that feels grounding. As a leader, what kind of normalcy can you put in place? Staff check-ins, board connection, walking breaks, coffee breaks, heck, even putting on work clothes. Each day we are grappling with time and its new meaning. Every hour and every day requires us to consider what success and productivity look like. We are understanding time differently or wrestling to understand it. Seeking normalcy helps us understand time. I realized this myself recently. After I had taught a regularly scheduled online class (which is normal for us at Foraker), I felt more grounded. I committed in that moment to keeping at least one work call a day on my calendar that would not be none COVID-related and to focus on the issues and plans that put that meeting on my calendar in the first place – before this all began. Each of us has elements in our life that ground us and remind us of healthy habits that worked for a reason. While you are in the midst of this great unknown, find at least one past healthy habit and stick with it for the sake of grounding again to your normal.
5. Balance patience and action – Nothing has generated more questions and fear of the unknown for our team than how nonprofits can access federal and state relief – so many questions. On the one hand the questions are terrific because they tell us you are paying attention, you are watching out for mission and your crew, and you know that you are not alone to get the answers. On the other hand, there are simply not all the answers you want right away. Literally the “relief car” is being built as we are all driving it. And it is being built on an infrastructure that was never meant to be accessed at the same time by so many. My hat’s off to the SBA and to all the financial institutions that are scrambling and working hard to meet intense deadlines and expectations, and I know they are inundated. For the first time in our nation’s history, c3 and c19 nonprofits are recognized in these relief packages, and we find ourselves standing in line with our counterparts in small business. But we are different, too. The rules are not made for us and even the first question on the application about ownership is tricky. As we help you navigate and as you navigate on your own, let’s share what we know. Where are your roadblocks? Where is your success? We have lots of resources for you to understand your choices, and we are learning more each day about some lesser known opportunities and obstacles inside the 880-page CARES act. As you move forward to seek relief through the PPP and CARES act options, let’s all remember those who are working on the other side of the table and are doing their best in this great unknown. Be patient. Be kind.
6. Leave a leadership footprint – Leadership is often defined not by what you did when things were good, but rather by how you acted when it got hard. These are hard times full of ambiguity. When we get to look back at this time, what will be your leadership footprint? What do you want to know you did – or didn’t do? How did you give to and get support from your team, your friends, your community, the wider world? How did you express your creativity and flexibility? How did you extend your privilege to someone else or upend the divide that is growing wider and wider in this pandemic? On this last point, let’s all remember that privilege shows up differently in many ways every day depending on many factors. Consider some of the larger problems we were already wrestling with in our state – no or low access to safe water in many parts of Alaska, low or no access to food on shelves in communities with no ferry service, and now no plane service, the highest rates of domestic violence and child abuse and suicide in the nation, overcrowding and lack of enough housing and childcare facilities across our state. These were issues before the pandemic – before the shut down – before the hunker down orders – before thousands of people lost their jobs – before there was no school to educate and feed our kids. Alaska ranked first in the nation in bad things for as long as we have been counting, and yet – here we are – that was our normal. No wonder there is a plea not to go back to that world. Imagine if we could use this moment in our lives, this moment in time, to create a path forward to lasting change. I know it is a lot to get through just today – but what if…? These words might be yours or mine, or all of our moments to put our privilege of having a job, or being an advocate, or being a leader in our community, or being a change agent to the best and highest use. Let’s not let our desire to know now get in the way of solving the longer-term problems we have all been working so hard to change.

These are just a few of the tools in our toolbox. They have always been there. We can remember them, and know them, and use them. Now is the time. We can do hard things. We can live without knowing the path of this virus and its impact. Our missions in many ways were built for this. We were built to do the hardest of things in the name of greater good. We were built to do what others thought couldn’t be done. We were built to engage even when we didn’t know the outcome, but we did it anyway. I believe in the role of our sector. I believe in you.

Let’s agree that what we know right now is that we can count on each other.

Last night the Small Business Administration issued an interim final rule explaining details about the Paycheck Protection Program that starts today, Friday, April 3. The regulations address timely and recurring questions, which are highlighted below.

Interest rate

Contrary to earlier announcements from SBA, the interest rate for PPP loans has now been set at 1.0 percent, up from the 0.5 percent reported earlier this week.

Application

Borrowers must complete the SBA Form 2483 (Paycheck Protection Program Application Form) and provide payroll documentation.

Alaska lenders

We recommend that you work with your preferred financial institution. Currently, not all of them are set up to provide these loans, but they are working fast to make sure they can do that soon. You’ll find a list here of Alaska lenders that was current as of April 1, 2020.

Payroll costs defined

As defined by SBA: “Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.”

Exclusions from payroll costs include compensation for employees based outside the U.S, compensation in excess of $100,000 (prorated), federal payroll taxes, qualified paid leave under the Families First Coronavirus Response Act.

Calculating payroll costs

The rule lays out a five-step process for calculating payroll costs for purposes of PPP loans:

1. Aggregate payroll costs (see above) for last 12-months;
2. Subtract pay from each employee in excess of $100,000;
3. Divide step 2 total by 12 months to get the monthly average;
4. Multiply step 3 total by 2.5; and then
5. Add any outstanding amount from an EIDL loan received between 1/31/2020 and 4/3/2020, “less the amount of any ‘advance’ under an EIDL COVID-19 loan (because it doesn’t have to be repaid).

Lender scrutiny

The interim final rule states: “The lender does not need to conduct any verification if the borrower submits documentation supporting its request for loan forgiveness and attests that it has accurately verified the payments for eligible costs. The Administrator will hold harmless any lender that relies on such borrower documents and attestation from a borrower.”

75%-25% rule for forgiveness

SBA will limit how much of a loan can be forgiven based on how the borrower spends the money. Loan forgiveness requires at least 75 percent of the loan amount be spent on payroll and no more than 25 percent on other eligible expenses (rent/mortgage, utilities). This restriction isn’t in the statute but SBA says it is imposing the restriction to promote employment.

Additional new rules for the CARES act

On April 1st, the Labor Department and the IRS put out new guidance to clarify the paid leave mandates and refundable payroll tax credits under the Families First Coronavirus Response Act.

Labor advice on paid leave

The Labor Department’s Wage and Hour Division (WHD) posted a temporary rule, effective April 1. One important detail is that WHD announced it will treat government orders for all or most residents to shelter-in-place or stay at home as triggers for paid sick or family leave. Employees not able to work because of a government shutdown order will likely be eligible for expanded unemployment benefits.

Additionally, the temporary rules expand the definition of “son or daughter” beyond what’s written in the Act to include children age 18 and older who are unable to care for themselves due to physical or mental disability. And, for parents working at home and caring for children, clocking in and out throughout the day is now acceptable vs. working a consistent eight hours at a time. Read more.

Tax advice on refundable payroll tax credits

The IRS posted an explanation of the refundable tax credits available to small and midsize businesses that are required to provide paid leave. The explanations, arranged in a helpful Q&A format, clarify common areas of confusion. View FAQ.

CARES ACT RESOURCES

The Small Business Owner’s Guide to the CARES Act – produced by the Senate Small Business Committee Staff of Ranking Member, Ben Cardin (D-MD)

Paycheck Protection FAQ’s for Small Businesses – produced but the Senate Committee on Small Business

CARES Act Loan Chart – produced by the National Council of Nonprofits eligible nonprofits choices for securing cash needed to maintain staff and operations.