501C6 Community PPP Letter
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September 28, 2020 The Honorable Nancy Pelosi, Speaker The Honorable Mitch McConnell, Leader United States House of Representatives United States Senate The Honorable Charles Schumer, Leader The Honorable Kevin McCarthy, Leader United States Senate United States House of Representatives RE: Pass Further COVID-19 Relief Legislation and Support 501(c)(6) Nonprofit Organizations Dear Speaker Pelosi, Leader McConnell, Leader Schumer and Leader McCarthy: The undersigned 2,310 organizations, which represent dozens of industries and millions of workers across the economy, implore you to expand equal eligibility under the Paycheck Protection Program (PPP) to include 501(c)(6) nonprofit organizations, such as trade associations, professional societies, chambers of commerce, business leagues and others, in any prospective COVID-19 relief measure. Since passage of the CARES Act (P.L. 116-136), 501(c)(6)s have been without this essential relief made available to almost every other sector of the economy. As their reserve funds continue to deplete, any more time without aid puts our community in jeopardy. We are grateful the House-passed HEROES Act includes a provision to expand PPP access to all 501(c) nonprofits and that Senate Republicans introduced the HEALS Act and subsequent legislation, which would expand the Program to certain 501(c)(6) organizations. The Senate language, however, includes inequitable employee caps and vague lobbying restrictions for 501(c)(6) organizations relative to all other borrowers. In addition to providing for 501(c)(6) eligibility, we urge you to enact the following PPP provisions: 1. Reauthorize until at least March 31, 2021; 2. Include 501(c)(6) nonprofits in the so-called “second draw” program; 3. Expand the definition for eligible “receipts” within the “second draw” program to include in-person event cancellations and lost revenue from certification programs and other education; and 4. Apply lobbying language as outlined in Section 90001 of the HEROES Act and included in the broadly bipartisan Local Chamber, Tourism, and 501(c)(6) Protection Act of 2020 (H.R. 6697).1 We wrote you in April and July to advocate critically needed support that our community needs. For many 501(c)(6)s, prospective access to PPP funds is the singular option to avoid bankruptcy, sustain employee welfare and continue to provide resources, education and support for America’s industries and professions. Nonprofit associations and other 501(c)(6) organizations are major employers that provided at least $18.3 billion in wages and salaries2 in 2019. They also lead countless activities that benefit America’s workforce and economy. These include, but are certainly not limited to, post-secondary skills training and career development for workers across industry; standard-setting for everything from children’s toys to building construction; and robust professional certification programming to help ensure consumers have confidence in the experts they consult for their health, financial wellness, legal concerns and other vital needs. Impact Snapshot: COVID-19 and the 501(c)(6) Nonprofit Community According to an August 2020 survey of 501(c)(6) nonprofit leaders by the American Society of Association Executives (ASAE) Research Foundation, more than 65 percent of respondents report a current and 1 H.R. 6697. Local Chamber, Tourism, and 501(c)(6) Protection Act of 2020. Section 2(1)(A)(iii). 116th Congress. 2 Bureau of Labor Statistics. 2018 Annual Averages. Quarterly Census of Employment and Wages (QCEW). projected loss of at least a quarter of their total budgets. More than 26 percent of respondents expect to lose at least half of their budgets, while seven percent of respondents expect to lose three-quarters or more. Unfortunately, the data demonstrate that many nonprofit associations and other 501(c)(6) organizations have little or no financial cushion to carry them through this devastating time. Thirty-four percent of respondents expect to use half or more of reserve funds to cover current and projected losses. More than 12 percent report insufficient reserves.3 Extrapolated out to the entire 501(c)(6) community, more than 7,500 employers could cease operations without swift financial aid.4 The survey also includes testimonials from 501(c)(6) nonprofits across America that detail staff and financial devastation from event cancellations, sharp membership revenue declines and other damages: • National Ground Water Association – Westerville, OH “Most of our education cannot be done virtually, [as it’s] scientific field work. As a result, we have suffered tremendous financial losses and the members of our association have lost education along the way. With a 40-percent drop in revenue, all aspects of the association have been cut: staff, education events, youth education programs, member support services, etc.” • California Association of School Psychologists – Sacramento, CA “We are a professional association of school psychologists who provide mental health services and special education assessments to school children. Approximately half of our budget is derived from annual educational events for school psychologists. All staff were furloughed at least 20% for the summer. One staff person was laid off in July. Further furloughs / cuts may be necessary.” • The Institute of Internal Auditors – Lake Mary, FL “Our certification testing venues were shuttered for several months, which effectively shut off our cash flow and hindered our ability to serve our members and the public.” • Electronic Security Association – Dallas, TX “[Cancelling] our trade show had a significant negative impact on revenue. Other areas negatively impacted are membership renewals, training and certifications. Established in 1948, ESA is the largest association in the U.S. representing the electronic life safety and security industry.” • Home Builders & Remodelers of Central New York – Syracuse, NY “Since large events have been shut down, we are left with almost no income this year. Something that needs to be made clear is that trade associations work to provide our elected officials with industry information to try to ensure the laws that are passed do not have unintended consequences. That should not be considered lobbying, that should be good governance.” These and thousands more nonprofit associations and 501(c)(6) organizations need your full support. Thank you for your consideration and continued service to our country during this challenging time. If you have questions regarding the 501(c)(6) nonprofit community, please contact Mary Kate Cunningham, CAE, vice president of public policy for ASAE ([email protected]; 202-626-2787). CC: The Honorable Marco Rubio The Honorable Nydia Velázquez The Honorable Ben Cardin The Honorable Steven Chabot 3 ASAE Research Foundation Financial Impact Study. August 2020. 4 IRS Data Book 2019. North American Industry Classification System (NAICS). U.S. Census Bureau. NATIONAL & INTERNATIONAL ORGANIZATIONS 340B Health, DC American Association of Professional Landmen, TX AASA, The School Superintendents Association, VA American Association of Radon Scientists and ABRET Neurodiagnostic Credentialing & Accreditation, IL Technologists, NC ABSA International, IL American Association of Social Media Professionals, VA Academy for Eating Disorders, VA American Association of Swine Veterinarians, IA Academy of General Dentistry, IL American Association of Teachers of Spanish and Academy of Managed Care Pharmacy, VA Portuguese, AL ACPA-College Student Educators International, DC American Board of Family Medicine, Inc., KY AICC, The Independent Packaging Association, VA American Board of Oral Implantology/Implant Dentistry, IL Air Movement and Control Association International, IL American Bus Association, DC Airborne Public Safety Association, MD American Cleft Palate-Craniofacial Association, NC Air-Conditioning, Refrigeration, and Heating Institute, VA American Coatings Association, DC Airports Council International-North America, DC American College of Clinical Pharmacy, DC Alliance for Pharmacy Compounding, VA American College of Emergency Physicians, DC Alpha Omega Dental Society, MD American College of Medical Genetics and Genomics, MD Ambulatory Surgery Center Association, VA American College of Nurse-Midwives, MD AMDA - The Society for Post-Acute and Long-Term American College of Osteopathic Family Physicians, IL Care Medicine, MD American College of Osteopathic Surgeons, VA America Outdoors Association, WY American College of Rheumatology, GA American Academy of Anesthesiologist Assistants, WI American Composites Manufacturers Association, VA American Academy of Dental Group Practice, IL American Council of Academic Physical Therapy, Inc., VA American Academy of Dermatology Association, DC American Council of Engineering Companies, DC American Academy of Family Physicians, KY American Council of Independent Laboratories, DC American Academy of Ophthalmology, DC American Council on the Teaching of Foreign American Academy of Oral and Maxillofacial Pathology, IL Languages, VA American Academy of Oral and Maxillofacial Radiology, IL American Counseling Association, VA American Academy of Orthotists and Prosthetists, MD American Craft Spirits Association, KY American Academy of Otolaryngology - Head and Neck American Dental Association, DC Surgery, VA American Foundry Society, IL American Academy of PAs, VA American Gear Manufacturers Association, VA American Academy of Pediatric Dentistry, IL American Gem Society, NV American