SEE ALSO >>> Nonprofit Organizations
Recipients of COVID Relief Could Run into Surprise Audits
The Paycheck Protection Program (PPP), which has offered 100% forgivable loans to eligible organizations, has provided critical support during the pandemic. But Accounting Today warns that nonprofit borrowers could unexpectedly find themselves undergoing “single audits” of their compliance with the federal program’s requirements. So could organizations that receive assistance under the recent American Rescue Plan Act (ARPA).
The Small Business Administration (SBA), which administers the PPP, has stated that PPP loans won’t count toward the $750,000 threshold. However, many PPP borrowers also received SBA COVID-19 Economic Injury Disaster Loans, and those are subject to single audit requirements.
Also, the SBA has said it plans to audit any PPP loan greater than $2 million as if the SBA were a federal funding program — suggesting it will apply single audit standards. And the federal Office of Management and Budget, which gives auditors guidance on how to conduct single audits, has directed federal agencies to analyze ARPA-related programs to determine if their risk level requires single audit oversight.
How Long Will it Take the Nonprofit Job Market to Recover?
The Center for Civil Society Studies (CCSS) at Johns Hopkins University predicts it could take nearly two years for the nonprofit industry to recover pandemic-related job losses. As of January 2021, the nonprofit workforce was down almost 960,000 jobs compared to February 2020 — a 7.7% decline.
Initial job losses (March through May 2020) are estimated at 1.64 million. Based on nonprofit job growth since then, CCSS estimates it will take the sector another 23.6 months to recover the estimated 957,731 job losses remaining as of the end of January. Nonprofit arts and entertainment organizations have seen the greatest job cuts, losing 36.3% of their workers.
Hate Groups Received Millions from Charities, Foundations
The Chronicle of Philanthropy has discovered that nonprofits designated as hate groups by the Southern Poverty Law Center (SPLC) have received millions of dollars in grants from donor organizations. As reported on the Chronicle’s website (philanthropy.com) on February 3, 2021, at least 351 donor organizations have made grants over the past seven years to such groups.
The majority of the donations were made by a small number of donor-advised funds (DAFs) managed by community foundations or commercially affiliated nonprofits, such as Fidelity Charitable. But 280 private foundations also donated to hate groups, a review of IRS records found.
In total, the Chronicle reports, the organizations directed $52.8 million to SPLC-designated hate groups through 2018, the most recent year for which the IRS data is available. DAF sponsors were among the most generous donors, contributing a collective $34 million.