Congress must act quickly to throw a lifeline to nonprofit associations
As part of any new COVID relief package for U.S. businesses, Congress and the Trump administration need to revive the Paycheck Protection Program (PPP) and provide eligibility for the nation’s nonprofit associations, which have been hard hit by the economic downturn but left out of all previous economic rescue measures.
Earlier relief packages this year allowed some nonprofit groups to apply for PPP money, which has been essential for keeping many of them alive during the worst economic downturn in decades. But those measures did not include the nation’s nonprofit associations and other 501(c)(6) organizations, which are commonly recognized as trade associations, professional societies, business leagues, chambers of commerce, boards of trade and similar organizations.
Congress and the administration have several compelling reasons to include these other organizations.
First, Congress has extended assistance to virtually every hard-hit sector — except nonprofit associations and 501(c)(6) organizations. Many nonprofit associations have little or no financial cushion to survive financial losses, and they desperately need access to the PPP now.
These entities are vital. They comprise almost 63,000 nonprofit organizations across the country that employ 1.3 million people and play a critical role in providing education for America’s workforce and in creating product and safety standards for everything from food packaging to building construction. They are organizations that define and advance standards for professional certification and codes of ethics in a wide range of professional fields and organize community assistance programs in times of greatest need, such as after natural disasters or catastrophic events — including the current COVID-19 pandemic.
Second, expanding the PPP to include 501(c)(6) nonprofit associations is bipartisan and holds broad support in Congress. House Democrats support PPP eligibility for all 501(c) entities in their HEROES Act. Over in the Senate, there is support for a proposal offered by Sens. Marco Rubio (R-Fla.) and Susan Collins (R-Maine) that would restart the PPP, create a so-called “second draw” program, reduce paperwork requirements for loan forgiveness and expand eligibility for PPP loans to 501(c)(6) nonprofit organizations.
The Senate proposal still has some issues that need to be worked out such as unfair caps for 501(c)(6) groups relative to other borrowers and overly burdensome restrictions that could discourage or exclude many smaller associations from the PPP. The Senate proposal also could erroneously label small employers as predominantly lobbying organizations. But it is nevertheless a step in the right direction to acknowledge the critical role associations fill in our economy and society.
Third, America’s nonprofit associations are struggling in a big way. The pandemic has virtually wiped out in-person meetings and conferences, sources of industry innovation and collaboration, as well as the largest source of revenue for these groups. Membership dues, also a major source of revenue for these groups, is ailing. While many associations have ramped up their work to serve their members during the pandemic crisis, without the PPP lifeline, the concern is that many could fail.
As Congress and the administration seek to jumpstart negotiations, a progressively bleak future for nonprofit associations — and countless other employers across the country — demands swift action. Consensus to revamp the PPP, among other indispensable provisions, should force both sides to reconsider their entrenched positions before the now dire outlook for our country gets worse.
Robertson is president and CEO of the American Society of Association Executives (ASAE).