Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

On Friday, March 27th, the US House of Representatives passed, and President Trump signed into law, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), an unprecedented and historic $2 Trillion pandemic relief package with many provisions that will help arts nonprofits who are struggling as well as artists and arts workers who are unemployed as a result of COVID-19.

This law will provide forgivable Small Business Administration loans for struggling non-profit arts organizations and independent artists, as well as $75 million of emergency funding available through the National Endowment for the Arts. A massive expansion of unemployment benefits that would put up to $1050 per week into the pockets of many Californians (including self-employed and contract workers such as independent artists is now called Pandemic Unemployment Assistance) and increases the period that someone can receive benefits from 26 weeks to 39 weeks.

For additional information about provisions in the CARES Act that effect nonprofits click here.

In addition, in California, on (Friday) March 27, Assemblymember Luz Rivas sent a letter to the Governor and legislative leaders – based on a CalNonprofits letter – seeking actions supporting nonprofits with government contracts, nonprofit employers and employees, and new funding. Twenty-eight members of the Assembly have signed onto this letter.

Pandemic Relief for the Arts

in California from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

This information was last updated on March 29, 2020

National Endowments for the Arts Pandemic Relief Funding

• National Endowments for the Arts will receive $75 million to be distributed for pandemic relief
• NEA will allocate 40% of funds to State Arts Agencies (Approximately $600,000 to CAC)
• The other 60% will be for direct grants to organizations and may be used for General operations
• There is no requirement to find matching dollars for these funds

Small Business Administration Loans

Paycheck Protection Program

Click here to download the 3-page small business loan guide

Eligible entities include: small businesses (under 500 employees), 501(c)3 nonprofits, and “sole-proprietors, independent contractors, and other self-employed individuals”

PLEASE NOTE: SBA Paycheck Protection Program Loans will be administered through qualified SBA lenders. CFTA encourages those interested in applying for these loans to contact your bank to see if they are a qualified lender, and to seek further consultation from your bank or a qualified lender.

• Must have been active with employees on payroll (or paid independent contractors) as of February 15, 2020
• Proof of repayment ability is not required, but must make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19 — “limited to companies that have seen their business dry up or stop completely due to COVID-19”

Organizations are eligible for loans equal to 2.5 times the amount of an average monthly payroll, up to $10 million, at 4% interest for any amount of the loan that does not qualify for forgiveness. The related expenses may be incurred between February 15 and June 30, 2020, and maximum maturity of the loan is 10 years.

These loans (either the full principal or part of the principal) can be forgiven under the following conditions:
• If the loan is used for payroll (including salaried employees, contractors, and earnings from self-employment), paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments;
• If those eligible expenses are paid during the 8-week period after origination of the loan;
• If the small business does not significantly reduce its workforce during the forgiveness window. “The amount forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year and reduced by the reduction in pay of any employee beyond 25 percent of their prior year compensation… borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period. “
• Eligible payroll costs do not include compensation above $100,000 in wages.
• Much of the SBA’s usual paperwork will be waived in order to speed loan disbursement. Documentation of covered expenses will only be required after the fact, upon request for loan forgiveness.

Additionally, organization applying for a loan may be eligible to also apply for up to a $10,000 Economic Injury Disaster Loan (EIDL) that would be issued within three days of the application being received, which could be subtracted from the forgiven loan amount.

Apply for an SBA loan

Unemployment Insurance Provisions

Relief for Workers Affected by Coronavirus Act

PLEASE NOTE: If you are unemployed as a result of the COVID-19 pandemic, you can find more information and apply for benefits from the EDD at https://edd.ca.gov/Unemployment/UI_Online.htm

Pandemic Unemployment Assistance – available for self-employed, independent contractors, those with limited work history, and others. Available through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits who are unable to work as a direct result of the coronavirus public health emergency.

This is a Federal program administered by the State. More information is available on the EDD website: https://www.edd.ca.gov/about_edd/coronavirus-2019.htm CFTA recommends you file for UI on their website now to get into the system. According to EDD’s website, it takes at least three weeks to process a claim for unemployment benefits and issue payment to most eligible workers.

Emergency Increase in Unemployment Compensation Benefits
Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months. In California, the maximum weekly benefit is $450 per week, meaning that unemployed CA workers would receive up to $1050 in weekly benefits

Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week
Provides funding to pay the cost of the first week of unemployment benefits through December 31, 2020 for states that choose to pay recipients as soon as they become unemployed instead of waiting one week before the individual is eligible to receive benefits. CA has waived the one week waiting period.

Pandemic Emergency Unemployment Compensation
Provides an additional 13 weeks of unemployment benefits through December 31, 2020 to help those who remain unemployed after weeks of state unemployment benefits are no longer available. In California, you can collect benefits for a maximum of 26 weeks, meaning that unemployed CA workers would now receive up to 39 weeks of benefits.

Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations
Provides payment to states to reimburse nonprofits, government agencies, and Indian tribes for half of the costs they incur through December 31, 2020 to pay unemployment benefits.

Emergency State Staffing Flexibility
Provides states with temporary, limited flexibility to hire temporary staff, rehire former staff, or take other steps to quickly process unemployment claims.

(Limited) Universal Charitable Deduction

• Temporary, above-the-line deduction for total charitable contributions, which would be capped at $300.
• Incentive applies to contributions made in 2020 and would be claimed on tax forms next year.
• Will encourage charitable contributions through the economic challenges in the coming months

Other Arts-Centric Pandemic Relief Funding

• $75 million for National Endowment for the Humanities (NEH)
• $50 million for Institute for Museum and Library Services (IMLS)
• $25 million for Kennedy Center for the Performing Arts
• $7.5 million for Smithsonian Institute
• $75 million for Corporation for Public Broadcasting (PBS)
• About $5 billion for Community Development Block Grants (CDBG)

While this historic $2 trillion stimulus package provides more options for the arts sector, there are still many challenges ahead. Please take or re-take the Americans for the Arts COVID-19 Arts & Culture Financial Impact Survey and enter estimated financial impact THIS WEEK. We will accurate data to make a real case for the arts.