ADA, more than 2,300 organizations implore government to allow nonprofits to apply for PPP loans
September 30, 2020
— The ADA, along with more than 2,300 other organizations, is urging the federal government to expand equal eligibility under the Paycheck Protection Program to include 501(c)(6) nonprofit organizations (such as the ADA and state and local dental societies) in any future COVID-19 relief measure.
In the Sept. 28 letter
, addressed to U.S. House Speaker Nancy Pelosi, Sen. Mitch McConnell, Sen. Charles Schumer and U.S. Rep. Kevin McCarthy, the organizations said that since the passage of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act,
501(c)(6)s “have been without this essential relief made available to almost every other sector of the economy. As their reserve funds continue to deplete, any more time without aid puts our community in jeopardy.”
In addition to providing for 501(c)(6) eligibility, the 2,310 organizations urge the government to enact the following Paycheck Protection Program provisions:
• Reauthorize the program until at least March 31, 2021.
• Include 501(c)(6) nonprofits in the proposed “second draw program.” This proposed program allows recipients of Paycheck Protection Program loans to receive a second round of relief if needed.
• Expand the definition for eligible expenses within the proposed second draw program to include in-person event cancellations and lost revenue from certification programs and other education.
• Apply lobbying language as outlined in Section 90001 of the Health and Economic Recovery Omnibus Emergency Solutions Act, or Heroes Act
, and included in the Local Chamber, Tourism, and 501(c)(6) Protection Act of 2020
. This language would prohibit borrowers from including salaries of all federally registered lobbyists on staff in Paycheck Protection Program loan term calculations.
The organizations said in the letter that nonprofit associations and other 501(c)(6) organizations are major employers that provided at least $18.3 billion in wages and salaries in 2019.
“They also lead countless activities that benefit America’s workforce and economy,” the organizations continued. “These include, but are certainly not limited to, post-secondary skills training and career development for workers across industry; standard-setting for everything from children’s toys to building construction; and robust professional certification programming to help ensure consumers have confidence in the experts they consult for their health, financial wellness, legal concerns and other vital needs.”
According to an August survey of 501(c)(6) nonprofit leaders conducted by the American Society of Association Executives Research Foundation, the organizations said, more than 65% reported a current and projected loss of at least a quarter of their total budgets. More than 26% of respondents expect to lose at least half of their budgets, 7% of respondents expect to lose three-quarters or more and 34% of respondents expect to use half or more of their reserve funds to cover current and projected losses.
“Unfortunately, the data demonstrate that many nonprofit associations and other 501(c)(6) organizations have little or no financial cushion to carry them through this devastating time … Extrapolated out to the entire 501(c)(6) community, more than 7,500 employers could cease operations without swift financial aid.”
“For many 501(c)(6)s, prospective access to PPP funds is the singular option to avoid bankruptcy, sustain employee welfare and continue to provide resources, education and support for America’s industries and professions,” the organizations said.
For more information on ADA advocacy, visit ADA.org/COVID19Advocacy