The passage of the latest COVID-19 relief package in Congress will provide welcome Paycheck Protection Program (PPP) relief for 501(c)(6) nonprofit organizations such as CVBs/DMOs and associations.
The more than 5,500-page bill includes $900 billion in relief for businesses and organizations and a $1.4 trillion spending agreement. The passage in both houses of Congress was widely considered to be a major compromise on both sides of the aisle after months of gridlock.
The $2.3 trillion deal still leaves much to be desired for those in the meetings and events industry.
“I don’t think anyone thinks this went far enough, but in some respects that’s good,” said Roger Rickard, founder and president of Voices in Advocacy, shortly after the deal was announced. “I think the devil is going to be in the details here, and I think there are some details we just don’t know about well at this time. So I would caution everyone not to overact to what they see and don’t see in the bill.”
ASAE, which represents U.S. associations, applauded the news of the package but maintained that the eligibility criteria for PPP funding was too strict for associations that have major lobbying operations.
“ASAE recognizes that this legislation came together only as a result of bipartisan compromise and congressional leaders were forced to accept a deal both parties described as imperfect to produce emergency relief measures for a nation in acute crisis,” said ASAE President and CEO Susan Robertson in a press release.
“We’re thankful Congress has recognized that associations are deserving of access to federal relief programs like the PPP,” she continued. “This year-end relief package qualifies as progress. However, there are many deserving associations that will find themselves still unable to qualify for PPP loans as a result of the conditions set in this bill. No legitimate, well-purposed association should be left in the cold simply because they exercise their First Amendment rights to advocate on behalf of the industries or professions they represent.”
According to ASAE, eligibility criteria under the PPP includes the following:
- The organization does not receive more than 15% of receipts from lobbying (up from 10% from previous proposals).
- The lobbying activities do not comprise more than 15% of total activities (up from 10%).
- The cost of lobbying activities of the organization did not exceed $1 million during the most recent tax year that ended prior to February 15, 2020.
- The organization has 300 or fewer employees (up from 150).
Under the bill, the second round of PPP stimulus will be calculated at 3.5 times payroll, with loan expenses tax-deductible.
ASAE said it will continue to push for further legislative solutions in the next Congress, and issued a press release shortly after the agreement was announced.
Relief for CVBs/DMOs
Rickard said that the package in general represented a win for the meetings and events industry, and especially for CVBs/DMOs and other 501(c)(6) nonprofit organizations, which were excluded from previous relief programs.
“The great thing is it includes the 501(c)(6)s, because people in the meetings industry rely a whole lot on those people to hold their meetings, and them being stable,” Rickard said. “If they’re not stable, that’s a whole other layer that crumbles down in the whole face-to-face industry.”
Another aspect of the bill, which covers business entertainment expenses, will also provide much needed relief for a beleaguered hospitality industry.
“I think we are constantly paying attention to the hotels and the airlines, yet we have forgotten so many other small businesses that have been totally devastated in this process,” Richard said. “There are thousands of different vendors that get a piece of the pie when a meeting or convention comes to town, and those people have been hit the hardest. And while this next phases of relief is a welcome sign for the country in general, we still have a long way to go.
The bill also includes $68 billion to purchase and distribute COVID-19 vaccines and aid states in testing efforts.
“The important thing is getting the money that’s going to go out to fight the virus and pay for the vaccines and other details,” Rickard said. “That has to happen because the faster we get the vaccine, the faster we get back together.”
More Details
The bill also includes the following relief for the travel industry:
- $15 billion grant program under the Save Our Stages Act portion of the bill for live venues, theaters and museum operators that have lost at least 25% of their revenues.
- $15 billion in new payroll assistance for airlines.
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