Large nonprofits are endangered by COVID-19

Federal assistance programs exclude some of the organizations that need them the most

By William Rogers and Chuck Collins

The economic impact of today’s global pandemic has been felt across all sectors and has upended all of our lives in ways both big and small. As CEOs of longstanding nonprofit organizations that support underserved community members, we understand this firsthand. The mission of the social impact sector has always been to provide services that uplift and sustain communities. Yet, during unprecedented times like this, the vital services we provide are in need of support.

Nonprofit social enterprises like Goodwill and YMCA operate lines of business that generate most of the revenue necessary to fulfill our missions and operate at a larger scale. Goodwill operates stores and donation sites in order to provide second chances through training and the dignity of work. YMCAs mission is to build community through health, trust, and safety. Thus, membership and program fees help provide vital services for our state’s vulnerable community members.

Today, with shelter-in-place orders in effect, we’ve been forced to drastically curtail the services we regularly offer. While most nonprofits are funded through philanthropy, closing our doors means our organizations are at dire economic risk. This is particularly distressing as this crisis has only increased demand for the very services we provide.

Still, we’ve done all we can to adapt and continue providing crucial services. At YMCA, we began offering childcare services to our frontline healthcare workers and increased access to both our food pantries and Family Resource Centers. At SF Goodwill, we continued paying our employees for as long as was financially viable, transitioned our job training and career services programs to virtual platforms, and began helping folks navigate unemployment benefits.

However, our ability to provide assistance may be short-lived, along with all other critical services that YMCA and Goodwill offer.

Both the newly proposed Coronavirus Relief Bill and the initial CARES Act exclude nonprofit social enterprises like ours. Because both YMCA and Goodwill employ more than 500 people, we’re ineligible for the Paycheck Protection Program (PPP) provision of the Act and unable to offer the financial stability our employees deserve. For perspective, under the current Small Business Loan structure, both strip clubs and gun shops qualify, while YMCAs, Goodwills, Salvation Armies, and Boys and Girls Clubs are excluded.

We need the help of our federal government, and we are urging policymakers to consider these amendments to the CARES Act:

● Define nonprofit social enterprises (SE) as mission-driven organizations that use a market-based business model geared to maximize social impact.

● Permit nonprofit SEs to qualify for the PPP via an expanded site-exemption provision.

● Expressly provide $75B for nonprofit organizations.

● Expand the Universal Charitable Deduction included in the CARES Act.

● Urge the Federal Reserve to include nonprofits and SE’s in its CARES Act “Main Street ” lending facility.

● At the state level, provide relief to nonprofits that opted out of the State Unemployment Tax program and chose instead to self-insure for purposes of unemployment.

On any given day, Goodwill and YMCA collectively serve thousands of people. At YMCA, our employees are prominent role models in the lives of the youth we care for every day. At Goodwill, we hire vulnerable populations and provide them with the opportunity for immediate work with benefits to help break the cycle of generational poverty.

Given the urgency of the situation and the vulnerability of our communities, it is imperative that policymakers be inclusive of nonprofit social enterprises like ours. Excluding vital organizations harms thousands of low-income Americans who rely on our resources, and hinders our economy’s ability to recover from this catastrophic pandemic, as social enterprises are integral components of our market economy.

William Rogers is CEO of Goodwill San Francisco, San Mateo and Marin. Chuck Collins is president and CEO of the YMCA of San Francisco.

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