Majority of Nonprofit PPP Applications Were Approved

Majority of Nonprofit PPP Applications Were Approved

More than half of nonprofits that submitted applications for the initial round of Paycheck Protection Program loans were accepted, a survey conducted by the Alliance for Strong Families and Communities and The NonProfit Times finds. However, almost a quarter (24 percent) of the organizations whose applications were denied have begun to lay off or furlough staff.

Drawn from nearly two hundred responses, the findings indicate that of the hundred and seventy-three nonprofits that applied for the Small Business Administration's PPP loans, 59 percent were accepted. Most of them will receive their loan from a community (34 percent) or regional (31 percent) bank, while 29 percent will receive their loan from a national bank. Of the nonprofits accepted, 77 percent have begun to access funds, while among the organizations that were denied or whose applications were delayed, 93 percent indicated they would reapply to the recently expanded program.

"The responses are generally negative on polling of this nature," said NPT editor in chief Paul Clolery. "Nonprofit managers need to be very careful because other regulations not immediately tied to the loan can be extremely damaging to nonprofits. An example is the U.S. Department of Labor instructing states to bill certain tax-exempt employers immediately for 100 percent of the costs of unemployment benefits paid to employees laid off as a result of the COVID-19 pandemic. [According to the National Council of Nonprofits], DOL guidance applies to a category of tax-exempt entities known as 'reimbursing employers', those that are permitted by Congress to self-insure claims for unemployment benefits by paying back the state unemployment trust fund for unemployment benefits paid to their former employees."

"The SBA Paycheck Protection Program has helped stabilize many nonprofit organizations with critical funding that enables them to retain and compensate their workers, many of whom are providing essential services during this public health crisis," said Alliance for Strong Families and Communities president and CEO Susan N. Dreyfus. "However, there are still a significant number of eligible smaller nonprofits who have not been able to access the loans, and we are increasingly seeing the strains placed on larger nonprofits (those of five hundred employees or more) who are not eligible for PPP loans. Organizations of all sizes need clarity on funding, forgivable loans, and a dedicated funding stream so they aren’t competing with for-profit entities for the funding that enables them to run homeless shelters, residential centers for foster youth, emergency child care centers, homes for seniors and individuals with disabilities, food banks, and more in this time of crisis."

"Survey on Nonprofit Access to Paycheck Protection Program (PPP) Loans Shows 59 Percent Accessed First Round of Funds." Alliance for Strong Families and Communities Press Release 04/29/2020.