The Coronavirus Aid, Relief, and Economic Security (CARES) Act is expected to be signed into law today, March 27, 2020. This is the largest COVID-19 federal relief package yet and includes new forms of support that can be accessed by arts organizations and self-employed individuals. Forms of federal support that have traditionally been more limited are now expanded to offer opportunities for the nonprofit sector, independent contractors, and "gig economy" workers.
Federal Arts Funding
- $75 million for the National Endowment for the Arts and $75 million for the National Endowment for the Humanities to administer for COVID-19 assistance. Of the total funding for the NEA, 40% of funding will be administered in partnership with state arts agencies, and the remaining resources will be delivered through direct NEA grants. These grants can be used for general operating support, and matching requirements can be waived. The NEA is rapidly developing guidelines to share in the coming weeks.
Small Business Administration Loans and Unemployment Insurance
- $350 billion for Small Business Administration (SBA) backed 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. Loans will be provided by local lending institutions that are authorized by the Small Business Administration (SBA), and applicants can apply to lenders for loan forgiveness if loans are used for these purposes.
- $10 billion for the SBA's Emergency Economic Injury Disaster Loan Program 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. The CARE act adds an expectation of three-day processing of loan applications. The Small Business Administration has informed Chorus America advocacy partner The League of American Orchestras that all states are in the process of being granted eligibility, and that all interested loan applicants should originate an application now. Guidelines should spell out how the SBA-backed loans above will relate to economic injury disaster loans; multiple forms of SBA relief may not be used for the same purpose.
- 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 an individual can claim under a state unemployment program. Details will be worked out in guidelines from the U.S. Department of Labor, and this relief will be administered by states.
New Charitable Giving Incentives
- A new universal charitable deduction, allowing all non-itemizer taxpayers to receive a tax deduction of up to $300 for cash charitable donations to 501(c)(3) nonprofit organizations during calendar year 2020. For taxpayers that itemize returns, the limit on the total percentage of Adjusted Gross Income (AGI) eligible for the charitable deduction has been lifted. The limit on corporate contributions has been lifted to 25%.
Questions about Relief Package Provisions?
Please email them to [email protected]org. While many answers won't be available until government agencies issue detailed guidelines, knowing the questions you have will help inform our advocacy.
Thank You for Your Advocacy
With word of a fourth COVID-19 relief package already in the works, your voice will be needed again soon!