Non-Profit, Religious, and Charitable Organizations

FAQ

Do non-profits qualify for any assistance during the downturn?

Yes. 501(c)(3) non-profits can qualify for small business loans and loan guarantees by the SBA to help them meet payroll, operating expenses, and mortgage/leasing costs. Check with your bank to find out what loans availability, qualifications, and conditions.

How will churches qualify if they have not been informed of any tax-exempt status by the IRS?

The current guidance is to reach out to the IRS and apply for 501(c)3 status. If you are not a certified 501(c)(3), you cannot utilize these programs.

I run an incorporated religious denomination with an IRC declaration - do we qualify for SBA loans?

Churches, integrated auxiliaries of churches, and conventions or associations of churches qualify for the PPP and EIDL loan programs, as long as they meet the requirements of Section 501(c)(3) of the Internal Revenue Code, as well as the other PPP and EIDL program requirements. Such organizations are not required to apply to the IRS to receive tax-exempt status.
More generally, according to the SBA, faith-based organizations, “including houses of worship,” i.e., churches are eligible to receive the Paycheck Protection Program Loan (PPP) and the Economic Injury Disaster Loan (EIDL). These loan programs are available to churches, as well as any “faith-based” organization, regardless of whether it provides secular social services.

Are there any limitations on how faith-based organizations can use the PPP or EIDL loan money they receive?

Only the same limitations that apply to all other recipients of these loans, including the criteria for obtaining loan forgiveness.

Will my organization be sacrificing its autonomy or its First Amendment or statutory rights if it requests and receives a loan?

No. Receipt of a loan through any SBA program does not (1) limit the authority of religious organizations to define standards, responsibilities, and duties of membership; (2) limit the freedom of religious organizations to select individuals to perform work connected to the organization’s religious exercise; and (3) constitute waiver of any rights under federal law, including religious autonomy and exercise under the Religious Freedom Restoration Act of 1993 (RFRA).

How will churches qualify if they have not been informed of any tax-exempt status by the IRS?

The current guidance is to reach out to the IRS and apply for 501(c)3 status. If you are not a certified 501(c)(3), you cannot utilize these programs.

I run an IRC 501(c)(6) fraternal organization – does my non-profit qualify for SBA assistance?

Non-profit organizations who may qualify to participate in the Paycheck Protection Program (PPP) include 501(c)(3) organizations, 501(c)(19) veterans organizations, and tribal business concerns. Non-profit organizations that are not tax-exempt under IRC sections 501(c)(3) or 501(c)(19), such as trade associations, advocacy organizations, unions, and social clubs, are not eligible to participate in the PPP program. Check with your local lender to see if you qualify.
Non-profit organizations who may qualify to participate in the Economic Injury Disaster Loans (EIDL) program include tax-exempt organizations under 501(c) (including 501(c)(6)s, 501(d)s, and 501(e)s of the Internal Revenue Code and non-profits under state law. Check with your local lender to see if you qualify.

My non-profit relies on federal grants for its operation. Is there a way to extend the grant reporting period for these grants?

Preliminary research appears to show No, though it may depend on the federal agency or department, such as NIH, NSF, etc. We are looking into this further and will update shortly with a confirmed answer. Please also feel free to reach out to my office with specifics of your unique situation.

Do any IRS deadline extensions apply to a required Form 990?

For Form 990-T filers who have the deadline of April 15, 2020, the deadline has been extended to July 15, 2020. For taxpayers who have the deadline of May 15, 2020, the due date has not changed or postponed and remains May 15, 2020.

Small Business Administration Resources and FAQ regarding faith-based organizations here.
Here is the SBA’s Interim Final Rule (IFR), clarifying that the Religious Freedom Restoration Act (RFRA) prevents the application of the affiliation rules to faith-based organizations for whom affiliation is a part of religious exercise (so they don’t have to aggregate their employee numbers).