Nonprofits

As the COVID-19 pandemic persists, Atlanta individuals, families, and businesses are feeling the impact of restrictive government orders and health mandates in schools, at work, and other public places. While the arrival of the vaccine has helped to curb the number of new infections, there is still much work to be done as Georgia has only distributed 67% of received doses. Over the coming weeks, many will line up to receive either the first or second inoculation and manage with the side effects.

For businesses substantially affected by COVID-19, the employee retention credit (ERC) has been one of the more valuable incentives to keep workers on the payroll. Since its inception in March 2020, the ERC has undergone several modifications and extensions which has increased the credit’s value. There was an initial extension for the first half of the year in the Consolidated Appropriations Act, 2021, (CAA) and then another through the end of the year in the American Rescue Plan Act. The changes are meant to provide additional relief to businesses challenged by the pandemic.

In a time when businesses are struggling financially from the persistent COVID-19 pandemic, many continue to find new paths to profitability when managing government orders. For some this has meant a transition to a remote work environment while others have had to make more significant changes to operating hours, location layout, and employee/customer safety practices. Although the impact varies, it is no secret that the pandemic is exacting a toll on many companies.

When the Small Business Administration (SBA) announced in late October that it will introduce a new Loan Necessity Questionnaire it created concerns about loan forgiveness eligibility. Borrowers with loans of $2M or greater are required to complete either SBA Form 3509 or 3510 depending on whether the borrower is a for-profit business or a nonprofit organization. The purpose is to help the SBA determine, for loan forgiveness purposes, whether the good faith certification about economic necessity made the loan necessary to support ongoing operations. Unfortunately, there were no comments or guidance issued when the announcement was originally made leaving the 42,000 impacted borrowers with more questions than answers.

In late September, the Financial Accounting Standards Board (FASB) published Accounting Standards Update (ASU 2020-07), Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.  The purpose of the new standard is to provide clear guidance on how nonprofits are to report donated nonfinancial contributions, non-cash contributions, on the financial statement.

The COVID-19 pandemic has created a bevy of operational issues and financial challenges for Atlanta nonprofits. The combination of forced closures and stay at home orders left many organizations unable to stay connected to the community, deliver needed services, or hold traditional fundraising events. Almost immediately, nonprofits had to make difficult financial decisions about which programs could be continued, but also whether staff could be retained. Over the months since the pandemic arrived, many have focused on building up the organization’s financial position by moving traditional fundraising events online and leveraging various loan and grant programs.

If there is one word that best describes 2020 it would have to be instability. The COVID-19 pandemic has created new challenges for individuals, businesses, and organizations. Efforts designed to flatten the curve while important to public health have created dire economic conditions. Businesses were hit sharply when forced business closures and modified operation regulations were implemented leaving many without the ability to generate income.

The COVID-19 pandemic has significantly impacted both individuals and businesses. The various regulations designed to curb the spread of the coronavirus has impacted nonprofits in ways that were impossible to predict. Over the past few months, statewide restrictions on large gatherings combined with stay at home orders have left many cut off from essential fundraising activities.

The impact of COVID-19 protection measures including the stay at home orders, forced business closures, and general uncertainty about prevention, left many businesses and nonprofits in a compromised position.

The comprehensive nature of the Act has left many confused and wondering how their situation will be impacted. Specifically, many Atlanta nonprofits have been seeking clarification on which programs and incentives apply to them.