Non-profits urge Congress to pass charity coronavirus relief package

charity coronavirus relief package

The coronavirus pandemic is taking a toll on almost everyone, including corporate, individuals, and government organizations. One more segment heavily impacted by the pandemic is non-profits, that is now urging Congress pass a coronavirus relief package or Emergency Charity Stimulus Package, for them.

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Need for charity coronavirus relief package

Even though Congress authorized trillions for stimulus funds, millions of Americans still rely on local nonprofits such as food banks and human services. However, these non-profits across the country are finding it difficult to meet their basic needs, raising questions on the business model, notes a report from WCBS 880.

“Our big fear is the next two years, the charitable giving will go off a cliff and non-profit groups are going to lose local government support,” said Chuck Collins of the Institute for Policy Studies.

To help non-profits survive, Collins wants lawmakers to make it mandatory for the private foundations to double their annual payouts from 5% to 10%. Collins notes that such a measure is needed because states and localities have slashed their funding.

Increasing the payout from 5% to 10% could help save jobs and needed services. It is believed that doing this could provide about $200 billion to the non-profits.

Calls for a coronavirus relief package or the Emergency Charity Stimulus Package for non-profits are not new. An Ipsos poll in June found that 72% of Americans favor an emergency charity stimulus package. However, it is not clear if lawmakers intend to come up with such a package or not.

Emergency charity stimulus package: what do nonprofits want?

America’s 86,000 foundations hold over $1 trillion in assets. These foundations by law are mandated to pay out 5% of their assets every year. This 5%, however, is not the maximum limit, but these foundations treat it as a ceiling. Moreover, this 5% also includes the money spent to pay overhead expenses and investments.

Requests are being made to double the annual required payout for three years from 5% to 10%. Every one percent increase in payout is expected to increase the inflow to charities from $11 billion to $12.6 billion annually.

A point to note is that these donations are subsidized by ordinary taxpayers. For the wealthiest donors, the funds they donate reduce their tax liability considerably. For every dollar these wealthy investors put in their foundation or DAF, reduces their tax liability by about 74 cents.

Some foundations have signed a pledge to support the non-profits with more urgency. Moreover, emergency response systems have been set up by community foundation sectors in all 50 states to push funds to the coronavirus response efforts. However, the need is to mandate such efforts to ensure more funds are available to the non-profits.

With the CARES Act, the lawmakers increased incentives for charitable giving. Now, non-profits are urging Congress to come up with a Charity coronavirus relief package as part of the next stimulus bill.


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