Last week, Congress passed a $2 trillion package to try to support American citizens and the American economy in the midst of the coronavirus crisis. This was Washington’s third effort on this front and it was focused on stabilizing the economy by providing unprecedented financial support to small and large businesses.
Unfortunately, the “CARES Act” fell short in supporting one critical sector — America’s charities.
While a broad coalition of nonprofit charitable organizations – including the Orthodox Union, Catholic Charities, Red Cross, Goodwill, YMCA, Jewish federations, American Cancer Society and more — succeeded in our advocacy to have nonprofits eligible to participate in the financial support programs being offered, Congress failed to adopt our boldest proposals in this otherwise ambitious legislation.
In the Jewish community in particular, many synagogues and day schools will indeed qualify or some federal support — and it will be a financial lifeline for them in this crisis. But some restrictions may leave others (our “larger” schools, federations and social service agencies) with little, if any support.
Nonprofit charities — including synagogues and day schools — are eligible for the core programs offered in the CARES Act. These include forgivable loans from the Small Business Administration of up to $10 million, the deferral of paying payroll taxes and a refundable tax credit against those payroll taxes if employees are retained on staff, and more. But the legislation fell short in providing the level of support for which we advocated.
Thus, even as we work with the Trump administration to make sure the CARES Act programs are implemented via policies that are inclusive of and sensitive to the needs of our synagogues, day schools and other entities, we are already in discussions with members of Congress about what more relief they should legislate as soon as possible.
The largest costs for most of America’s charitable organizations are personnel costs. In an environment in which Washington is trying to mitigate unemployment, there must be more support for nonprofits — small and midsized — keeping their staff on board.
At the same time, demands for our services are high. Our schools are still teaching our children, albeit remotely. And our social welfare agencies are facing record demands. The CEO of one Jewish community poverty charity told me that it spent $1 million over budget in a single week in March to serve those in need.
To address this unprecedented crisis, we have proposed a $60 billion support package — exclusively for America’s charities. The basis for this bold proposal is the simple fact that, based on data from the 2008 recession, we expect charitable giving in the U.S. to decrease by $40 billion over the next two years and strained state and local governments to slow or stop payments on $20 billion worth of contracts and grants to nonprofits.
Congress can — and must — infuse cash into the charitable sector not only through its direct grants but also by supporting the generosity of our fellow Americans. The CARES Act thankfully included an “above the line” tax deduction so that those who don’t file itemized tax returns can deduct their donations — but only at a very modest $300 per person. Together with a bipartisan group of Senators led by James Lankford (R-Okla.) and Chris Coons (D-Del.), we propose boosting this incentive to $4,000 per person ($8,000 per married couple). It should also be retroactive to Americans’ 2019 taxes (which needn’t be filed until July) and prospective to at least 2021. This will help generate much needed — and community binding — charitable giving in the midst of the pandemic.
Without dramatic and immediate financial and programmatic assistance, America’s charities will not be able to continue to serve as frontline responders to those who have turned to us in the past and to the many who, for the first time, will need our help in 2020.
Will our charities be there to help? Our answer now and always must be: “Yes.” But Congress and the president must help us so that we may continue to serve our fellow citizens.
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Nathan J. Diament is the executive director for the Orthodox Union Advocacy Center.
