Letter – Nonprofits Must Be Included in Economic Stimulus Package

Two days ago 29 major nonprofits, such as Council on Foundations and United Way, wrote to Congress demanding that they be a part of any relief and economic stimulus package that arises amidst the CoronaVirus crisis.

“Nonprofits employ 12.3 million people (the third largest workforce – tied with manufacturing), with
payrolls exceeding those of most other U.S. industries, including construction, transportation, and
finance. A substantial portion of the nearly $2 trillion nonprofits spend annually is the more than
$826 billion they spend on salaries, benefits, and payroll taxes every year.ii Yet, in multiple disaster
relief laws in the past, Congress has ignored this core economic fact and approved employment related tax credits that left nonprofit employers and employees out of the provisions.”

“Most nonprofits are relatively small: 97 percent of nonprofits have budgets of less than $5 million
annually, 92 percent operate with less than $1 million a year, and 88 percent spend less than
$500,000 annually for their work. Thus, the “typical” nonprofit is community-based, serving local
needs. Also, relatively few nonprofits have an endowment and most have limited reserves — about
50 percent have less than one month of cash reserves.”

“No one doubts that hospitals, community health centers, and senior living communities will continue
to be hit hard by the coronavirus. Most of those organizations are charitable nonprofits. And many
other nonprofits are responding to the outbreak, such as local Meals on Wheels which are serving
their normal community of elderly people and a growing number of individuals under quarantine. The
list goes on to include nonprofit food banks, shelters, domestic violence services, houses of worship,
early care and education centers, after-school facilities, and more that are being called on to feed,
house, and care for people whose lives have been disrupted by closures, job loss, and sickness.”

Philip Hackney