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10 Considerations for Nonprofits Regarding COVID-19

COVID-19 has created an evolving situation with varied impacts. Many nonprofit organizations across the country are faced with difficult challenges. Below are 10 considerations for your nonprofit:

1) Nonprofits are eligible for the Payroll Protection Program and other Small Business Association loans through provisions in the CARES Act. Nonprofits need to make sound business decisions regarding whether to apply and then if they decide to apply for these lending programs, they should do so ASAP because funds will run out.

2) Get creative with funding options. For example, nonprofits can consider tapping into endowments, filing petitions to release restricted funds, utilizing existing lines of credit, and utilizing insurance coverage if available for large organizations. For contracts and other services, see if you can receive funds now but provide services later in the year.

3) Create a work from home policy. For instance, nonprofits may run into work from home issues with hourly employees. If an hourly employee suddenly works 60 hours from home one week, now there may be overtime compensation issues. Communicating clear expectations is imperative.

4) Consider creating other policies. Examples include infectious disease policies, data-privacy policies, screening policies for physically operational workplaces, and due diligence documents explaining why you are an essential business if physically operational.

5) Don’t hide from any obligations. Communicate your needs with any contracting partners. This will help place you in a better position in the long run.

6) Continue following corporate formalities. Email meetings and approvals are probably not sufficient. Have a telephone or video conference instead.

7) Check your insurance coverage. When operations change, coverage needs may change. Communicate with your insurance provider to ensure any operational changes are covered.

8) Boards of Directors need to be actively engaged right now. Don’t wait until the next scheduled meeting to address COVID-19. Nonprofits need to be able to react immediately with long term views in mind.

9) IRS 990 Forms are still due May 15th. Even though the deadline for individual and business tax returns has been extended, IRS 990 forms that tax-exempt organizations must file with the IRS each year are still due May 15th, 2020.

10) Lastly, reach out to your attorney, CPA, or check your local bar association for resources. The Cleveland Metropolitan Bar Association has compiled a lengthy list of resources and funding options here: https://www.clemetrobar.org/cmba_prod/CMBA/Pro_Bono___Community_Programs_overview/Reach_Out/Reach_Out_Overview.aspx.

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