Nonprofit Groups Urge Employee Retention Credit for Charities

November 9, 2021

Honorable Ron Wyden
Chair
Senate Committee on Finance
U.S. Senate
Washington, DC 20510

RE: Nonprofit Job Vacancy Crisis and the ERTC

Dear Chair Wyden:

Charitable nonprofits in Oregon and throughout the country are reporting that job vacancies are forcing organizations to curtail services and turn away people in need, while also raising costs and threatening the sustainability of community organizations on which many residents depend for their wellbeing and even survival. The National Council of Nonprofits has sought to quantify the scope of the problems and identify potential solutions by conducting a nationwide Survey on Nonprofit Workforce Shortages. That survey is still in the field.

A surprising data point — and one we want to bring to your attention immediately — is this:

Oregon nonprofits have been relying on the Employee Retention Tax Credit at nearly twice the average of charitable organizations throughout the United States.

According to preliminary results, 26% of Oregon nonprofits reported the ERTC when answering the question “What federal or state relief has your nonprofit utilized?” Nationally, 15% of nonprofits taking the survey reported using the ERTC.

We rush to share this information with you because it rebuts the suggestion made during the infrastructure debate that employers weren't using the ERTC. As a result of that false statement, the Infrastructure Investment and Jobs Act that President Biden is expected to sign this week retroactively repeals the ERTC for the fourth quarter that started on October 1.

The Nonprofit Association of Oregon shared with you in September that the ERTC was indeed allowing nonprofits to retain critical employees in the face of the economic challenges caused by the pandemic. The NAO letter (attached) stressed that the ERTC has become a true lifeline for nonprofit economic viability and that tens of thousands of organizations are counting on Fourth Quarter 2021 access to an ERTC to support the financial decisions they made to bring employees back on the payroll and increase operating capacity to serve their communities.

The new data that we share here demonstrates this very point; that charitable organizations in Oregon are using the ERTC in their efforts to retain staff and that its loss is having or will have the untenable result of causing more layoffs and leaving more Oregonians without access to the services they need.

This last point is underscored by additional preliminary Oregon data from the pending Survey on Nonprofit Workforce Shortages. Among the respondents answering how serious the job vacancies are for their organization, responses ranged from a few open positions to greater than 50%. Multiple nonprofits reported that due to job vacancies, the waiting list for their services has extended to more than a month. One organization reported that as many as 650 people are waiting to receive services. Another estimated that 100 children are on their waiting list. One nonprofit professional wrote that job vacancies have “halved our ability to see mental health clients at a time when more people are in need of the services.”

The reasons nonprofits are confronting these vacancies are not typical of all industries. Unlike for-profit businesses, nonprofits typically cannot simply increase salaries and pass the costs on to consumers. Quite often, nonprofits do not charge for services, particularly in the fields of human services and fundamental supports. Further, nonprofits providing services on behalf of governments normally operate under a grant or contract that provides no room for additional costs; nonprofits are expected to absorb new expenses or fundraise to pay for what governments are refusing to reimburse. And as you know from our leadership on tax incentives to promote charitable giving, the nonprofit sector is not experiencing the growth in donations to cover pre-existing costs, much less the costs that would be needed to compete with the private sector and governments for talented employees.

Senator Wyden, the bottom line from this new information is that nonprofit job vacancies are hurting Oregonians, and an extension and modification of the ERTC for charitable employers is a solution that can have immediate effect. We ask that you do all that you can to include restoration of the ERTC for the fourth quarter and into 2022, with modifications, in the budget reconciliation bill, an end-of-year tax bill, or any other legislation this year that you deem appropriate.

Finally, we want to acknowledge your work on the reconciliation bill. We know that you and your staff have been working well beyond “overtime” to secure the best possible tax and social public policies. The people of Oregon and charitable organizations throughout the United States are taking notice. Thank you.

We stand ready to provide additional information to support your efforts.

Sincerely,

Jim White
President and CEO
Nonprofit Association of Oregon
jwhite@nonprofitoregon.org

David L. Thompson
Vice President of Public Policy
National Council of Nonprofits
dthompson@councilofnonprofits.org

Attachment

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September 8, 2021

Honorable Ron Wyden
Chair
Senate Committee on Finance
U.S. Senate
Washington, DC 20510

RE: Employee Retention Tax Credit and Charitable Nonprofits

Dear Chairman Wyden:

The nonprofit sector faces unprecedented challenges as we assist you and the American people in providing pandemic relief and economic recovery. Prior to the pandemic, charitable nonprofits employed more than 12 million people, making us the third largest employer in the country — larger than the construction, financial services, and manufacturing industries. As of July 2021, over 600,000 nonprofit jobs were lost due to the pandemic and still haven't returned. Now, more than ever, nonprofits and the communities we serve need your support.

Congress enacted several support programs for businesses and nonprofits over the course of the pandemic, but as acknowledged by many, relief for charitable organizations has fallen short. While we recognize there are many competing priorities that could be included in the budget reconciliation bill, we believe Congress must do more to ensure that the needs of charitable nonprofits are highlighted during this once-in-a-generation moment. We urge you to prioritize support for the Employee Retention Tax Credit (ERTC) during the Finance Committee September markups of that legislation.

Congress created the ERTC as part of the CARES Act to encourage businesses and nonprofits to keep employees on their payroll through 2020. Last December, Congress extended the ERTC through the middle of 2021 and expanded the program to allow an applicant who had previously received a Paycheck Protection Program loan to also be eligible for an ERTC. Finally, in March of 2021 in the American Rescue Plan Act, Congress extended the ERTC through the end of 2021. Unfortunately, access to the ERTC for the fourth quarter of 2021 would be taken away upon passage of the bipartisan Infrastructure Investment and Jobs Act.

The ERTC is a refundable payroll tax credit for nonprofits and businesses that was designed to provide a financial incentive for employers to keep employees on their payrolls and continue to deliver important services during the pandemic and in its immediate aftermath. The ERTC was helping to do exactly what its name required: allowing nonprofits and businesses to retain critical employees in the face of the economic challenges caused by the pandemic. Since its creation last year, the ERTC has become a true lifeline for nonprofit economic viability. Tens of thousands of organizations are now counting on Fourth Quarter 2021 access to an ERTC to support the financial decisions they made to bring employees back on the payroll and increase operating capacity to serve their communities.

Specifically, we ask you to prioritize continued and robust support for the ERTC during consideration of the Finance Committee's portion of the budget reconciliation bill by:

• Allowing charitable nonprofits to access the ERTC during the Fourth Quarter of 2021;

• Extending nonprofit eligibility for the ERTC through 2022 to help ensure a strong economic recovery from the pandemic; and

• Amending the definition of nonprofit “gross receipts” for the ERTC program to better reflect revenue available to support the work of nonprofits amid the pandemic.

Nonprofits are doing everything we can to serve communities across America during the pandemic. As the nation recovers, our sector will play a critical role in rebuilding the economy, restoring livelihoods, and strengthening communities. The undersigned national and Oregon charitable nonprofit organizations seek your support for urgent relief through retention and improvement of the ERTC in budget reconciliation that will enable charitable organizations to contribute to our nation's relief, recovery, and rebuilding.

Sincerely,

Oregon Nonprofits

2D4D
Beaverton

A Greater Applegate
Ruch

Addictions Recovery Center, Inc.
Medford

Adelante Mujeres
Forest Grove

AGE+
Clackamas

American Cider Association
Portland

Ballet Fantastique
Eugene

Beaverton Downtown Association
Beaverton

Beaverton Symphony Orchestra
Beaverton

Bloom Anew
Portland

Broadway Rose Theatre Company
Tigard

BURMESE AMERICAN BUDDHIST CORP.
Damascus

Cedar Mill Community Library Association
Portland

Central City Concern
Portland

Children's Cancer Association
Portland

Children's Center of Clackamas County
Portland

CHILOQUIN VISIONS IN PROGRESS
Chiloquin

Columbia Center for the Arts
Hood River

Cottage Theatre
Cottage Grove

Council on Aging of Central Oregon
Bend

DanceAbility International
Eugene

Diversability Inc.
Bend

EcoDistricts
Portland

Elkton Community Education Center
Elkton,

Eugene Ballet
Eugene

Eugene/Springfield NAACP
Eugene

Fifth Corner Academy
McMinnville

Five Oaks Museum
Portland

Friendly House
Portland

Friends of Outdoor School
Portland

Friends of the Breitenbush Cascades
Gates

Friends of the Cascade Locks Historical Museum
Cascade Locks

Frontline Services PDX
Portland

Geos Institute
Ashland

Girl Scouts of Oregon & Southwest Washington
Portland

GLSEN Oregon
Portland

Grande Ronde Symphony Association
La Grande

Grants Pass Museum of Art
Grants Pass

Gresham Historical Society
Gresham

Habitat for Humanity of La Pine Sunriver
Sunriver

Habitat for Humanity of Lincoln County
Newport

Hand Up Project Inc.
Portland

Healing Reins Therapeutic Riding Center
Bend

Health Care for All Oregon
Portland

Heartland Humane Society
Corvallis

Hillsboro Downtown Partnership
Hillsboro

Hillsboro Soccer Club Hillsboro

Humane Society of Central Oregon
Bend

Impact NW
Portland

IN A LANDSCAPE
Portland

Institute for Applied Ecology
Corvallis

Jackson Street Youth Services
Corvallis

Jessie F. Richardson Foundation
Clackamas

Lane County Historical Society
Eugene

Little Engineers Education Foundation
Portland

Living Yoga
Portland

Maji Development Coalition
Portland

MetroEast Community Media
Gresham

Milton-Freewater Downtown Alliance
Milton-Freewater

Neurotherapeutic Pediatric Therapies, Inc.
Canby

New Freedom Lane County
Dorena

Nonprofit Association of Oregon
Portland

North Clackamas Watersheds Council
Milwaukie

NTEN
Portland

NW Dance Project
Portland

Oceanaire Partners
Seaside

Old Mill Center for Children and Families Inc.
Corvallis

OnTrack Rogue Valley
Medford

Open Adoption & Family Services
Portland

Options Counseling and Family Services
Eugene

Oregon Adult Soccer Association, Inc.
Portland

Oregon Alliance of YMCAs
Roseburg

Oregon Association of Parliamentarians
Statewide

Oregon Aviation Historical Society
Cottage Grove

Oregon Coast Community Action
Coos Bay

Oregon Crime Victims Law Center
Portland

Oregon Music Hall of Fame
Portland

Oregon Referee Committee
Beaverton

Oregon Shakespeare Festival
Ashland

Oregon Wildlife Foundation
Portland

OregonASK
Wilsonville

Pacific Youth Choir
Portland

Parrott Creek Child & Family Services
Oregon City

Pathway Enterprises, Inc.
Medford

Pearl Buck Center
Eugene

PERIOD, Inc
Portland

PHOENIX Rising Transitions
Gresham

Portland Art Museum
Portland

Portland Christian Schools
Portland

Portland Folklore Society
Portland

dbaPortland FolkMusic Society

Portland Fruit Tree Project
Portland

Portland Revels
Portland

Portland'5 Centers for the Arts Foundation
Portland

Post Growth Institute
Ashland

Project Access NOW
Portland

Rahab's Sisters
Portland

Restore Oregon
Portland

rimrock recycling
Burns

Rogue Food Unites
Ashland

Rogue Valley Family YMCA
Medford

Self Enhancement, Inc.
Portland

Somali American Council Of Oregon
Portland

South Lane Mental Health
Cottage Grove

SquareOne Villages
Eugene

Stayton Public Library Foundation
Stayton

Stumptown Events Inc.
Portland

Teras Interventions and Counseling Inc.
Portland

The Big-Little School
Eugene

The Blueprint Foundation
Portland

The Circus Project
Portland

The Family Nurturing Center
Medford

The Little French School
Eugene

The Pathfinder Network
Portland

The Portland Ballet
Portland

The Shadow Project
Portland

Tualatin Valley Creates
Beaverton

United Way of Central Oregon
Bend

United Way of Lane County
Eugene/Springfield

United Way of Linn, Benton & Lincoln Counties
Albany

United Way of the Columbia-Willamette
Portland

Waldorf Association of Portland, Inc.
Milwaukie

We Can Do Better
Eugene

WomenFirst Transition & Referral Center
Gresham

Yamhill-Carlton Together Cares
Carlton

Youth Empowerment Shelter
The Dalles

National Nonprofits

Agudath Israel of America

American Alliance of Museums

Americans for the Arts

Association of Art Museum Directors

Boys & Girls Clubs of America

Cancer Support Community

Catholic Charities USA

CERF+ The Artists Safety Net

Council on Foundations

Dance/USA

ETS

Girl Scouts of the USA

Girls Inc.

Goodwill Industries International, Inc.

Habitat for Humanity International

Independent Sector

JCC Association of North America

Jewish Federations of North America

KABOOM!

League of American Orchestras

Meals on Wheels America

Mental Health America

National Art Education Association (NAEA)

National Council of Nonprofits

NECHAMA — Jewish Response to Disaster

Network of Jewish Human Service Agencies

OPERA America

The Nonprofit Alliance

Theatre Communications Group

Union for Reform Judaism

United Philanthropy Forum

United Way Worldwide

Volunteers of America

YMCA of the USA

YWCA USA