Internal Procedures During COVID-19

 

Internal Procedures During COVID-19

Table of Contents:

Human Resources & Meeting Employee Needs

Administration, Finance & Legal

Board Governance

Fundraising

 

Human Resources & Meeting Employee Needs

What basic procedures should we consider putting in place for employee expectations while they work at home during this crisis? 

Foundations should review their remote worker policy if it already exists; it may be contained within a broader employee handbook or related HR policy. Foundations who don’t yet have such a policy, the National Council of Nonprofits has a wealth of resources around this topic.  

In general, the following are examples of employee expectations to help ensure stakeholders can access employees, and employees and supervisors remain connected.  
 
Staff must:  

-Be reachable by phone, as well as be available for video call when needed, and active on email during regular business hours. 
-Update their calendar to indicate remote status and include the number at which they can be reached.  
-Forward their office phone to their remote number during business hours.  
-Discuss with their supervisor any additional job-related expectations relating to working remotely.  
-Be able to demonstrate progress on work being performed remotely. 

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How can foundations help each other and their employees throughout the COVID-19 crisis?

Phil Buchanan, president of the Center for Effective Philanthropy, shared a blog post in which he shared a list of suggestions for leading through the COVID-19 crisis.  His list offers insight for how foundation leadership can better serve their staff, grantees, and fellow foundation colleagues. Some of his recommendations include: 

  • Check in on a one-on-one basis with your staff. 
  • Empower creativity across your organization. 
  • Recognize and support your staff who are also full-time parents during this crisis. 
  • Keep your board updated on emerging plans and ways to be involved. 
  • Recognize that members of your staff will be affected by COVID-19, either directly or through those they know. 
  • Make plans for contingencies and redundancies that will need to be put into place for staff directly impacted by COVID-19. 
  • Learn from peers leading other organizations and collaborate whenever possible. 
  • Take time for yourself and find ways to gain perspective. 
  • Acknowledge that mistakes will happen.
  • Know we will get through this. 
  • Question usual operating assumptions. 
  • Know that you’re doing your best. 

Jonse Young, co-chair of CMF’s Michigan Forum for African Americans in Philanthropy (MFAAP) Affinity Group and director of philanthropic services at Grand Rapids Community Foundation, shared with CMF members, “We know African Americans are disproportionately affected by this pandemic, representing 40% of the COVID-19 related deaths in the state. Philanthropy has an opportunity to respond both externally and internally to the inequities that have been further exacerbated by this crisis. Through conversations with my fellow MFAAP colleagues we recognized the need to lift up best practices for organizations to engage with and support employees of color who are grappling with this crisis. We invite you to read our guide featuring different policies and practices to support African American staff sourced directly from CMF members.” The MFAAP-developed guide is available here
 
If you have additional examples to share or questions about best practices, please connect with Olivia Henry Harris, CMF learning services coordinator.  

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How do we share the required Department of Labor poster regarding COVID-19 when working remotely?

Under the Families First Coronavirus Response Act (FFCRA), employers are required to post this poster with information about employee rights to paid sick leave and expanded family and medical leave.  Employers with fewer than 500 employees are required to place this poster in a conspicuous location on the work premises.

When employees are working remotely, the employer can satisfy this requirement by emailing or directly mailing this notice.  Employers may also post this information on an internal or external website that is accessible to employees. Once employees begin to return to the workplace, this poster must be posted in a conspicuous location, through December 31, 2020. 

For more information on how FFCRA impacts foundations and their employees, Robin Ferriby, senior counsel at Clark Hill, PLC, provided guidance. Clark Hill provided information on updated Department of Labor guidance addressing questions about FFCRA and employers’ PTO policies.

Specifically, all nonprofit and for-profit employers that employ fewer than 500 employees are required to provide benefits under the Act once it goes into effect (no later than April 2). Certain employers - those with fewer than 50 employees - may be exempt from providing benefits under the Act if they can prove that providing such benefits would jeopardize the viability of the business as an ongoing concern.    

New benefits required under the Act include: 

-Two weeks of paid sick leave for both full and part-time employees regardless of the length of service of the employee.    

-Twelve weeks (the first two of which may be unpaid) of family leave for full and part-time employees who have at least 30 days of employment with the employer. This particular benefit is limited to those employees caring for children under the age of 18 with a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. 

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What other resources are available for our foundation as employers?

The AAIM Employers’ Association has provided access to a recorded webinar addressing the points shared below. Please note that while it is free, sign-in is required for access. 

-Can proof of a negative coronavirus result be required before allowing an employee in self-quarantine to return to work? 
-How should employers handle an employee who may have been exposed to the virus? 
-If an employee contracts the virus at work, should it be treated as workers' compensation? 
-What options are there when an employee refuses to self-quarantine after returning from a personal trip to a level three country?

The Management Center has written an article "5 Tips for Managing Remotely During COVID-19."

The New Horizons Computer Center has a slate of free webinars for work from home training.

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How can employees access healthcare coverage if they are released or experience a drop in income? 

Michiganders who lose a job, resulting in a loss of their healthcare coverage or a change in income, may have low or no-cost healthcare options available through the Affordable Care Act (ACA) Marketplace, Medicaid or the Children’s Health Insurance Program (CHIP). Consumers in these situations are not required to wait for the yearly open enrollment period and can act immediately to obtain coverage.  
 
To determine eligibility, consumers should visit www.healthcare.gov. Depending on income and their situation, consumers may qualify for cost sharing reductions, premium tax credits, coverage for their children (CHIP) or Medicaid. Consumers should contact DIFS toll free at 877-999-6442 if they need assistance. 
 
Information in this response was provided by the Michigan Nonprofit Association. 

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How can the foundation plan for employees returning to work safely? 

The Small Business Association of Michigan has released a Tips and Resources webpage dedicated to helping Michigan organizations create preparedness and response plans for returning to work safely.   

Some highlights of SBAM’s recommendations include: 

  • Encouraging employees to stay home if they feel sick. 
  • Practicing proper hand hygiene.
  • Display the required Department of Labor poster regarding COVID-19. (See our FAQ “How do we share the required Department of Labor poster regarding COVID-19 when working remotely?” for more information.)
  • Provide personal protection supplies where appropriate. 
  • Frequently clean commonly touched surfaces within the workplace.
  • Provide clear instructions for social distancing and queueing within the workplace, including breakrooms, restrooms and other locations where people may gather.

SBAM also released its “Small Business Owner’s Guide to Getting Back to Work Safely” booklet, available on its webpage

OSHA has also released a poster, “Ten Steps All Workplaces Can Take to Reduce Risk of Exposure to Coronavirus” that can be displayed at all workplaces. Their recommended steps include: 

  • Encourage workers to stay home if sick.
  • Encourage respiratory etiquette, including covering coughs and sneezes.
  • Provide a place to wash hands or make available alcohol-based hand rubs containing at least 60% alcohol.
  • Limit worksite access to only essential workers, if possible.
  • Establish flexible worksites (e.g., telecommuting) and flexible hours (e.g., staggered shifts), if feasible.
  • Discourage workers from using other workers’ phones, desks, tools and equipment.
  • Regularly clean and disinfect surfaces, equipment and other elements of the work environment.
  • Use Environmental Protection Agency (EPA)-approved cleaning chemicals with label claims against the coronavirus.
  • Follow the manufacturer’s instructions for use of all cleaning and disinfection products.
  • Encourage workers to report any safety and health concerns.

OSHA also has a “Guidance on Preparing Workplaces for COVID-19" booklet available.  

Legal counsel from Bodman shared a template “COVID-19 Preparedness and Response Plan” that meets the requirements of Executive Order 2020-97. 

The CDC has also released documents that can be shared with employees to help keep them safe during the COVID-19 pandemic. “How to Protect Yourself and Others” outlines ways that individuals can prevent the illness from spreading, including washing hands, avoiding close contact, wearing a mask, covering coughs and cleaning surfaces. “How to Safely Wear and Take Off a Cloth Face Covering” presents simple steps to wear and remove face coverings correctly, as well as best practices for everyday health habits during the pandemic. 

The Michigan Department of Labor and Economic Opportunity also launched its MI Symptoms Web Application, which allows employers a free system to implement COVID-19 symptoms screening for employees. MI Symptoms provides employees an objective tool to inform their employer that they should not be coming to work, without having to share symptom-specific information. An FAQ for the MI Symptoms program is available, as well as a press release announcing its launch. 

If your foundation has a policy in place and can share it for peer learning purposes, please contact CMF

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How can foundations find PPE for their on-site staff? 

Employers are now required to provide on-site employees with proper safety equipment as part of their re-opening plans. The Michigan Chamber of Commerce has created a website that puts organizations in contact with vendors and manufacturers of personal protective equipment (PPE).   

The CDC recommends wearing cloth face coverings in public settings, including the use of homemade cloth masks. Instructions for wearing and making homemade facemasks are available from the CDC.  

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Should foundations consider moving forward with performance reviews during the COVID-19 crisis? 

Performance reviews should be a regular part of the foundation’s human resources activity.  However, COVID-19 and its broader impact may significantly affect whether or not performance reviews are a reasonable option in the near term. 

Many foundations conduct performance reviews for staff, oftentimes with the CEO or an HR professional conducting the reviews for most staff, and the board evaluating the performance of the CEO. (For information about how to conduct performance reviews for staff and executives, please visit CMF’s Sample Documents Hub.) 

These reviews can be valuable learning tools for organizational staff and can potentially impact compensation decisions. However, they can also be time consuming. For example, BoardSource’s recommended process for a board evaluating a CEO can take up to eight weeks and includes ten distinct steps to fully assess the CEO’s annual performance. Within a crisis situation, the foundation’s “standard” performance review process may need to be adapted to meet the current limitations facing staff and board members. 

article published by SHRM outlined a number of scenarios currently facing employers that resulted in significant changes to their performance review processes. Inspired by these examples, there are a number of ways that foundations may be able to adapt their current performance review processes to still achieve necessary staffing and organizational goals. 

  • Be Flexible: The current crisis environment means that the existing performance review process may need to be adjusted. The timing, structure or format may be adapted to fit the organization and staff members’ needs. For example, some aspects of the process could be delayed or certain questions could be discarded. 

  • Be Consistent: With many staff members working on a different set of projects during the COVID-19 pandemic, leadership and HR staff will need to determine what changes to make to the performance review process and then be consistent with those changes across the staff. If one person is evaluated against their ability to do their job under standard conditions and another is evaluated against work not found in their job description, the overall effectiveness and fairness of the process can be called into question.   

  • Clearly Define Productivity: In an office that may now be almost entirely remote, staff productivity may look different and may be more challenging for some leaders to identify. Consider what components of the performance evaluation fit with staff activity in a virtual setting and determine if any aspects of the review may be worth changing. 

  • Consider Frequency: In some cases, the current environment requires more frequent communication between staff and leadership, rather than depending on an annual review. For example, the standard performance review may need to be folded into a series of conversations or monthly/quarterly meetings to evaluate staff members’ emerging needs and areas for improvement, while also identifying potential opportunities as the crisis evolves. 

  • Use a Template: To save staff time, performance evaluations should use a review template that can guide staff and leadership through a series of questions or categories. This results in a focused discussion, especially when both parties have access to the evaluation metrics in advance. CMF’s Sample Documents Hub includes a number of performance evaluation templates, appropriate for nonprofit and foundation organizations.   

  • Determine the Purpose of Reviews: Within the current economic environment, some organizations may be considering whether they can afford staff raises or bonuses.  Organizational leadership should determine, in advance, the purpose of this year’s performance reviews. If these meetings are solely designed to influence compensation, some organizations may determine that the review process is not a worthwhile use of staff time. Alternatively, organizations may determine that performance reviews are exceptionally worthwhile, as they can be used to evaluate, motivate and set goals for staff for the upcoming year, independent of compensation.  

The organization should clearly communicate with staff about the goals of its performance review process, as well as expectations and anticipated or potential outcomes. 

Ultimately, each organization must determine whether performance reviews are an appropriate process to pursue during the crisis. Depending on staff availability, project load and the appropriateness of the performance review process to the current situation, each foundation faces different challenges and should manage their human resource response accordingly. 

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Administration, Finance & Legal

Can staff travel to the foundation’s building to conduct essential business?

Update: As of June 1, 2020, Governor Whitmer released Executive Order 2020-110, which means that “Michiganders are no longer required to stay home.” However, certain businesses and activities are still restricted and “any work that is capable of being performed remotely must be performed remotely.” 

Current guidance indicates that organizations can have employees on site to “conduct minimum basic operations” for the purpose of maintaining the value of inventory; maintaining the value of equipment; for security; to process transactions (including payroll and benefits); or to facilitate working from home. 

Employees working on site should be restricted to the minimum number of hours possible and with staggered schedules to minimize contact. Likewise, employees should follow CDC recommendations for social distancing, frequent hand washing and increased office cleaning/disinfecting procedures.  

In a call with CMF members earlier this year, Governor Whitmer reiterated the importance of all foundation and nonprofit staff practicing social distancing and the need for staff to should utilize remote work access wherever possible, including those performing essential needs for their organizations. 

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How can foundation staff handle the issue of retrieving U.S. mail while employees are working remotely?

Update: As of June 1, 2020, Governor Whitmer released Executive Order 2020-110, which means that “Michiganders are no longer required to stay home.” However, certain businesses and activities are still restricted and “any work that is capable of being performed remotely must be performed remotely.” 

Foundations should clearly communicate via organizational websites and email signatures that staff are working remotely and that U.S. mail is not being checked regularly.  

Some organizations are using the United States Postal Services’ Informed Delivery service, which allows for users to preview which letter-sized mail and packages are scheduled to arrive to their address.  

Each organization may designate employees responsible for conducting business within the physical office. Generally, these people may be responsible for sorting mail, creating PDF copies of physical correspondence, and gathering and depositing checks.   

Staff members working within the foundation’s physical office should follow guidance for maintaining a safe workplace and minimize time spent on site. If it is unsafe for only one employee to go to the office alone, employees in the office together should follow guidance for social distancing.

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How can foundations maintain financial controls while working remotely?

Update: As of June 1, 2020, Governor Whitmer released Executive Order 2020-110, which means that “Michiganders are no longer required to stay home.” However, certain businesses and activities are still restricted and “any work that is capable of being performed remotely must be performed remotely.” 

Foundation staff have expressed concerns about how to deal with existing financial controls, including those for handling deposits and mail, while working remotely.   

Kyle Schafer from Maner Costerisan has recommended several approaches to addressing financial controls: 

  • In addressing internal control concerns, organizations can designate one staff person to open the mail over a video calling tool (Zoom, for example), with another individual on the other end of the line. 
  • In addressing the detective side of internal financial controls, organizations should implement a timely review of banking activities (additions, deductions, and cleared checks), such as performing a daily review of the previous day’s activities.   
  • Organizations should communicate with payors to encourage electronic payment options, whenever possible.

Colleagues at BoardSource also compiled a list of suggestions for maintaining financial controls while working remotely. Some of their recommendations include: 

  • Contact your organization’s audit firm for recommendations that fit your existing organizational controls and learn how changes to your procedures now may impact your audit later. 
  • Document your organization’s plan to handle cash receipts, cash disbursement and payroll. Monitor the execution of the plan carefully.  
  • Do not forward mail to a staff person’s home address. 
  • Ask vendors and those that owe your organization to use an electronic payment method (credit card, website, ACH, wire, etc.) rather than paper checks.  
  • Use technology to monitor internal control processes. This could include using shared spreadsheets for cash receipts or “Zoom” to open mail. 
  • For banks that require two signatures on paper checks, some alternatives include sending the checks between the two signers via U.S. Postal Service, asking the vendor to use an electronic payment method instead or asking the bank for a temporary change to the signature rule.  
  • In the longer term, consider using an accounts payable program that has built-in customizable internal control procedures.   

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Can the foundation use electronic signatures or e-mail messages to conduct foundation business or make changes to grant agreements? Specifically, what suffices as a legal signature, given how many foundations are currently working remotely?

Many foundations are currently managing all operations virtually, including the development and amendment of grant agreements.

Michigan adopted the Uniform Electronic Transactions Act in 2000, which dictates how organizations can use electronic documents and transactions. If both parties involved in a given transaction agree to use electronic signatures, then an electronic document is sufficient.  

In many cases, foundations and other organizations use a photocopied or electronically-generated PDF signature to conduct business remotely. If this is inconvenient or impossible, the foundation may be able to use e-mail to state out changes to grant agreements (for example) and then request that the other party (a grantee, in this case) should reply by email indicating that they agree to the amendments listed in the original email. In these agreements, both parties should be in agreement, as if their signature were affixed to a paper document.

The Uniform Electronic Transactions Act and similar federal policy does not apply to certain business contracts or estate planning documents. Please consult with appropriate legal counsel regarding any specific concerns that could impact foundation business in these areas.  

Please note that Executive Order 2020-41 does loosen the rules for electronic transactions and signatures as they pertain to court documents, wills and trusts.  However, most foundation and nonprofit use of electronic signatures is already covered by the 2009 amendment of the Michigan nonprofit statute, consistent with the above description. If you have specific questions about how this may impact your organization, please contact Ask CMF

(Information related to this question was provided in part by Jennifer Oertel, a CMF member, shareholder with Bodman PLC and CMF’s Impact Investing Expert in Residence.)

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Where can I find related legal resources?

Jennifer Oertel, a CMF member, shareholder with Bodman PLC and CMF’s Impact Investing Expert in Residence, has shared with CMF Bodman PLC's answers to several legal questions related to workplace law, employee benefits, and more. 

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How can the foundation learn more about the Nonprofit Relief Funds available through the CARES Act?

Many CMF members have asked for more information about how to determine the most appropriate relief options for their organization.   

Bodman Law partnered with CMF to create a FAQ document that assists in determining if Employee Economic Injury Disaster Loans (EIDL) or Paycheck Protection Program options are most appropriate for an organization’s needs. This document help explains the purpose of these loans and the differences between them, including their impact on payroll and loan forgiveness.  

Independent Sector has created a useful webpage that is designed to help nonprofits understand the eligibility criteria, timelines and application information related to the CARES Act. Organizations may need to collaborate with their banking partner, as well as qualified tax or legal counsel to learn more about these opportunities. 

Nonprofits with fewer than 500 employees are may be able to access the following relief options: 

-Small Business Administration (SBA) loans and loan forgiveness 
-Employee Economic Injury Disaster Loans (EIDL) grants 
-Employee retention credit 
-Deferral of payroll taxes 

Nonprofits with more than 500 employees have the following options: 

-Employee retention credit 
-Deferral of payroll taxes 
-Economic stabilization fund 
-Emergency Economic Injury Disaster Loans (EIDL) grants 

The National Council of Nonprofits published an analysis of the CARES Act and developed a useful side-by-side comparison chart of the loan options available to nonprofits through the CARES Act.  

In a webinar for CMF members, the legal team from Bodman Law discussed aspects of the CARES Act in depth, including a look at the loan options available to nonprofits.  

*Note: On April 6, 2020, the SBA issued updated guidance on the Paycheck Protection Program (PPP), as highlighted in this FAQ. We advise checking the SBA website for the most current guidance. 

Some of these relief programs, tax credits and loans cannot be pursued simultaneously. Application requirements also vary. Please seek advice from qualified tax or legal counsel to determine the most appropriate options for your organization.      

The Michigan Nonprofit Association recommended the following steps for preparing your application and related materials: 

1. Call your financial institution to determine if they are an SBA lender. You best chance at getting support through the process is with your own bank where you have a relationship. If you don’t, check with a bank in the neighborhood of your organization where they might be familiar with your work. Another idea is to check with a bank where you may have your own accounts. Relationships matter.  
   
2. Review your finances and determine if the loan makes sense for your situation. It covers operational expenses such as rent or a mortgage as well as payroll for staff. If you need support, this could be a vehicle for you.  
   
3. Consult your board chair and finance committee chair to review. It is helpful to talk through a decision like this with others. Also, getting a loan will most likely need board approval.  
   
4. The application can be uploaded virtually and there are services that provide virtual notary services if the bank or program requires signature notarization.  

Additional information about these programs is available through the Small Business Association of Michigan (SBA). A sample application form is also available.    

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What options are available to the foundation for keeping workers on payroll? What is the Paycheck Protection Program? 

The Paycheck Protection Program, part of the CARES Act, is specifically designed to incentivize organizations to keep their workers on payroll. Organizations can access a loan that covers payroll, rent, mortgage interests or utilities. These loans are forgivable, under certain conditions, including if all employees are kept on payroll for eight weeks.  

Additional information on the Paycheck Protection Program (PPP) is available through the U.S. Small Business Administration. A sample application form and maximum loan application calculator is also available.  

Organizations will need to work with an SBA-approved banking institution or lender to participate in this program; some CDFIs also serve as SBA-approved lenders. A list of SBA lenders in Michigan is accessible through the SBA webpage.   

April 23, 2020 Update: In a 388-5-1 vote, the U.S. House overwhelmingly passed legislation to provide approximately $484 billion in coronavirus relief for small businesses, hospitals and expanded medical testing. The relief package provides $310 billion to the PPP, of which $60 billion is set aside for community banks and smaller lenders. The President is expected to sign it into law on April 24. 

Other options for economic relief for your organization or grantees may be available through current or emerging governmental programs. The SBA has a COVID-19 Relief Options webpage with information about the Paycheck Protection Program and other forms of assistance that may meet other critical needs. Some forms of assistance may be mutually exclusive or inappropriate to your organization’s specific financial situation. Please seek advice from qualified tax or legal counsel to determine the most appropriate options for your organization.  

Please note that the SBA has provided additional guidance that may impact the applicability of some large charities and foundations for their PPP loans. The SBA may seek further documentation to prove that borrowers’ PPP loan applications were necessary and met the certification of economic uncertainty in good faith. Guidance as of May 6, 2020 indicates that SBA plans to review all loans in excess of $2 million.  The “safe harbor” deadlines for organizations that do not meet these new requirements can repay their loan has also been extended beyond the original early May deadline.

Bodman Law partnered with CMF to create a FAQ document that assists in determining if Employee Economic Injury Disaster Loans (EIDL) or Paycheck Protection Program options are most appropriate for an organization’s needs. This document help explains the purpose of these loans and the differences between them, including their impact on payroll and loan forgiveness.

The Kresge Foundation shared a blog post highlighting the PPP and other loan opportunities that can help nonprofits meet urgent needs: “Mission, Money & Markets: Nonprofit Guide to Accessing Capital Through the 2020 CARES Act.” 

Bodman Law has also developed a set of resources to help clients navigate the legal and business issues connected to COVID-19, including the CARES Act, with specific guidance related to the PPP. 

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What are the foundation’s obligations to receive forgiveness for a Paycheck Protection Program loan? 

Update: As of May 15, 2020, SBA published its PPP Loan Forgiveness Application form and instructions, available through the SBA website

Plante Moran provided useful guidance to organizations about the rules for PPP loan forgiveness. While some components of the program are still being decided, this resource offers answers to some of the field’s most frequent questions on this topic. 

Several key highlights for navigating the PPP loan forgiveness process include: 

-Create a clear process for tracking and properly recording all disbursements from the PPP loan. 

-Supporting documentation is key to obtaining loan forgiveness.  Make sure to keep clear records and all proof of payments related to the PPP loan. 

-Consider creating a separate bank account to manage your PPP loan funds and make it as easy as possible to develop an audit trail for the loan funds.   

-Contact your lender for information about creating specific PPP reports that help track and submit support for loan forgiveness. 

-Organizations have an eight-week timeframe after the depositing of the loan funds to use the funds (and record the use of those funds), in accordance with the restricted purpose of the PPP loan program.  Activity that takes place during this eight-week period will be used for calculating the level of loan forgiveness. 

A sample PPP loan tracking document is available here. This spreadsheet can assist organizations with recording and tracking data that will influence their level of loan forgiveness. MNA, Co.Act Detroit, and Insights3 also released a PPP loan payment calculator, designed for Michigan nonprofits.

If a foundation has laid off employees prior to receiving their PPP loan, they should resume full employee count and pre-crisis payroll as soon as possible after the loan funds arrive. (Employees filling these roles during the 8-week period do not necessarily have to be the same as those filling the roles prior to the crisis.) The level of loan forgiveness may be proportionally impacted for organizations that do not attain their pre-crisis payroll or employee count. 

Please note that elements of the PPP loans are subject to change and depend upon the SBA’s pending guidance. 

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What are some key considerations we may want to think about in deciding if a future event we planned should proceed in person, be changed to virtual, postponed or canceled? 

There are many factors that go into this decision making around hosting meetings and events. Below are just of the key factors you may want to consider: 

Health and Safety – It is imperative you are aligned with current mitigation guidelines release by the State, along with guidance from the CDC and other official agencies. Decision making should keep the health and safety of participants as the top priority in event planning considerations. Recognize that state and federal guidance will shift as the situation evolves; the crisis may look drastically different months into the future. It is important to monitor what experts are anticipating for the longer-term with regard to health and safety.   

Immediacy – Consider whether the content is time sensitive or in some way urgent, or whether it can wait, in which case postponement may be the most appropriate option.   

Format – Look at whether the content can be adapted for a virtual (web-based or call-in) format, or perhaps conveyed as a written message sent via email. There may be times when in-person dialogue or interaction is critical, and so again, delaying the event may be appropriate until in-person gatherings can resume.  

Impact – Consider the impact a cancellation or postponement would have on those supporting the event in some way. This includes not only participants and hosts or speakers, but also the surrounding community, venue staff, vendors and many others connected to the program or meeting.   

Budget and Contracts – Explore the financial impact of each option, taking into account any contracts that may exist for venues and services. If in your planning you are hopeful the event can still happen in person, work with your legal counsel to write new contracts in such a way that maximize your flexibility should the event need to be canceled or postponed. 

CMF decided to transition its 2020 Annual Conference from an in-person event to a virtual experience. In announcing this change, CMF also released a planning memo that outlined the reasons behind the move to virtual and how that impacts current and future conferences and learning services programming.

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What protocols should organizations consider implementing for the safety, comfort and convenience of staff and participants when it comes to in-person events? 

Current guidance does allow for in-person events under specific conditions.  However, these regulation of events and gatherings can change depending on current outbreaks within local areas or regions. Events and programs may require making plans months or even years in advance. The following list is intended to assist in considering how to address issues related to the safety, comfort and convenience of staff and participants for post-COVID events. 

  • Plan for the possibility of social distancing and masks being a requirement for the foreseeable future.  As outbreaks of COVID-19 fluctuate nationally, event planners should plan for how to enforce social distancing and/or the wearing of masks by event attendees.   

  • Consider making changes to your existing attendee cancellation policy. Attendees who are ill should be comfortable either cancelling or swapping in a colleague on their event registration.  This may mean adjusting cancellation policies, particularly around last-minute cancellations and changes, cancellation fees, etc. 

  • Make sure to have back-up plans for presenters, keynote speakers and other important event participants. Just as attendees will need to be healthy before attending events, they need to be reassured that speakers are also healthy. For small events with one speaker, work with them as needed to secure a person who could serve as backup in their absence should they become ill. For larger events, such as a conference, develop alternatives for addressing last-minute cancellations of speakers and special guests. 

  • Plan for the possibility of staff members being ill. While many staff who have helped run conferences and other programs have had the experience of "pushing through" events while under the weather, it is exceptionally important that staff are healthy before and during the programs that they are managing. Develop contingency plans if one or more staff cannot participate.   

  • Explore how to infuse virtual or live-streamed elements within the in-person experience. Some participants may not be able to attend a program in person due to cost, distance, health or other factors. Adding livestreamed presentations and other virtual programming, more people can engage, including those who may not have otherwise considered participating in person. This option can also offer opportunities for unique presenters or collaborations by bringing out-of-state or international presenters to the local conversation through technology. 

  • Share your event date earlier than normal. Due to the large number of rescheduled events, many organizations are finding that the fall and later months of the year are filling with scheduled events that typically occur in the late winter and spring months. Make sure to communicate your event date to key stakeholders and potential attendees with more advanced notice than may be part of your typical event plan. 

  • Schedule your event space well in advance. If your organization holds a special event or program outside of your standard workplace, you may discover that other event spaces are booked well in advance, more so than normal. For example, many venues are already filling up for 2021, due to rescheduled events from 2020.   

If you have additional suggestions or ideas related to in-person events and programs, please share them with CMF

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How does the new flat tax rate impact our grantmaking, especially with increased giving in response to the COVID-19 crisis? 

The new private foundation excise tax was modified to a new flat rate of 1.39% as of December 20, 2019. This new rate is effective for foundations’ taxable years that begin after December 20, 2019. Foundations with a fiscal year that begins before December 20, 2019, should consult with their financial or tax advisor to determine the appropriate tax rate. For more information, please consult the IRS webpage.   

Before the enactment of the flat rate tax, a foundation’s tax rate varied based on the amount of grants given each year. According to Exponent Philanthropy, the advantage of the new 1.39% tax rate is that foundations can give the same or more in total grant amount in a single year, allowing for more flexible grantmaking from year to year.   

With expanded grantmaking efforts intended to address the COVID-19 crisis, foundations can use the new flat tax rate to increase grantmaking amounts without being penalized in future years.  

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How do changes in the IRS tax deadlines impact foundations?

On April 8, 2020, the IRS announced the extension of payment deadlines for taxpayers, as indicated in Notice 2020-23

This extension does impact exempt organizations, including foundations and charitable organizations. The IRS has extended filing and payment deadlines originally due between April 1 and July 15, 2020, until July 15, 2020.     

This extension impacts the following forms:  

-Form 990  
-Form 990-EZ  
-Form 990-PF 
-Form 990-T 
-Form 990-W 
-Form 1120-POL 
-Form 4720 

The Council on Foundation has clarified that “the extension to July 15, 2020 is automatic, and exempt organizations do not need to file any request for extension. If an organization needs even more time, it can file Form 8868 before July 15, 2020. However, any additional extension cannot exceed the original statutory or regulatory extension date (i.e., generally six months from the original due date).” 

The IRS has also provided guidance on how employers can defer the deposit and payment of their share of social security taxes through December 31, 2020.

Please consult with your tax advisor to determine the impact of these changes on your organization.

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Is there a checklist we can use to review the foundation’s activities and ensure we haven’t missed anything critical during our efforts to address the COVID-19 pandemic? 

In the midst of the COVID-19 pandemic, many foundation staff have been working extra hours to ensure that grantees are well supported, address the unique needs of colleagues internally and collaborate with external partners. As the impact of COVID-19 continues to be felt across the sector, it is important to ensure the foundation’s key activity continues, or missed and delayed elements are addressed in a timely manner. 

CMF has created a “What Did We Miss While Managing the COVID-19 Crisis?” checklist, available for download through the Knowledge Center. 

Highlights from the checklist include: 

  • Board Meetings: For foundations with monthly, quarterly or annual meetings, some may have been missed in the wake of the current crisis. Use this opportunity to schedule any missed meetings or make adjustments to scheduled board meetings to ensure that all requirements are being followed, such as the number of board meetings to occur each year and the percentage of board members to be in attendance. Board meetings can also take place virtually.  

  • Financial Audit: Check that all internal and external financial deadlines have been met, especially if you have changed over to a new fiscal year.  

  • Tax and 990 Deadlines: While the IRS has extended payment deadlines for many necessary forms, ensure completion of all required forms and payments in a timely manner. 

  • Performance Reviews and HR Functions: In the midst of a crisis situation, performance reviews and other regularly-scheduled HR functions may have been postponed.  Before resume those traditional activities, consider adjustments that reflect the current work environment, staff needs and any changes in policy. 

  • COVID-19 HR Policies and Procedures: The Department of Labor has created materials that foundations should have posted within their workspace. Likewise, there is information available to employers to help them create procedures that help to ensure safe workplaces for employees. Even if only one person is working in the office, these policies and the DOL poster should already be in place.  

  • Grantmaking Activity: As the COVID-19 pandemic has now spanned months, look ahead at how another round of quarterly grantmaking activity (applications, evaluations, etc.) and the anticipated response to ongoing community needs will impact the foundation.   

  • Insurance and Other Financial and Contractual Responsibilities: Many administrative expenses of foundations are regularly scheduled, double check that bills are being covered. This can include contracts, real estate, retirement plans, permits and other fiscal and legal responsibilities.   

  • Facility Issues: While many staff may be working virtually, foundation facilities still have costs and associated maintenance needs. Ensure that rental payments are being made, and regular cleaning and maintenance issues are addressed. If a staff person has not visited the office space regularly, conduct a thorough walk-through to check for any potential problems (water leaks, general disrepair, evidence of pests, etc.) and make a list of issues that need to be resolved prior to other staff returning to the facility. 

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What are some of the long-term administrative plans that the foundation should consider, based on its learning experience during the COVID-19 pandemic? 

The COVID-19 pandemic has resulted in many foundations and nonprofits taking a serious look at their current administrative policies and procedures. In the long-term, foundations can reassess aspects of their operations to more effectively navigate future crises.   

  • Disaster Planning: While many foundations have a disaster plan for grantmaking or continued operations, often they are focused on responding in the case of natural disasters (tornados, floods, etc.). The COVID-19 crisis has resulted in many foundations expanding to other categories of crisis, including pandemics. 

  • Succession or Alternative Staffing Plans: In the wake of COVID-19 some foundations have found themselves with rapidly-changing staffing situations, as staff working out of their homes, manage childcare responsibilities and beyond. The workload resulting from COVID-19 has also forced many staff to take on roles they were not trained for initially. Some organizations have discovered they needed multiple people trained for a single emergency-level position due to the long-term nature of the current situation. Other organizations are making policies that now clearly delineate “essential” workers or those who have increased leeway for virtual work. 

  • Regularly Review Formative Documents: In the midst of the crisis, many foundations have discovered that their articles of incorporation, bylaws and other policy documents were not sufficiently updated to be in accordance with current nonprofit law. This is a time to review and update these documents to ensure the foundation has a full range of options available to manage unexpected needs, such as virtual board meetings or grants to non-501(c)(3) organizations.   

  • IT Strategy: With Stay at Home orders enforced across the state, many foundations experienced a fully-virtual office for the first time. Those without a comprehensive IT strategy may have particularly struggled. This can be a good time to reassess or develop a long-term and crisis-ready approach to IT solutions, including grantmaking, financial management software, communications and the accessibility of essential hardware (laptops, phones, etc.) for all staff.


 

Board Governance

What is the role of the board in response to the COVID-19 situation?

According to our colleagues at BoardSource, board members have numerous responsibilities in addressing the impact of COVID-19 on their organization.   

Board members have a duty of care to the foundation, which means that they should be actively supporting and engaged in the organization’s work, especially during a crisis situation. The board has the ultimate responsibility for the organization and should be making strategic decisions that safeguard and further its mission and grantmaking. 

Whether your foundation has few or many staff members, the board may be involved in the following areas: 

Risk Assessment and Management: The board should assist the CEO with determining internal and external risks associated with the COVID-19 outbreak, including its impact on key stakeholders, internal staff and the financial health of the institution. With that information in mind, the organization can then develop an appropriate plan for managing those risks. 

Organizational Event Contingency Planning: While social distancing policies and CDC recommendations have led to the cancellation of events, the board can play an important role in determining the impact of these cancellations and help identify contingencies that ensure the organization’s financial welfare.  

Finances and Investments: With the economic repercussions of COVID-19 on the global economy, boards are being called upon to make important decisions around institutional finances and investments. For foundations, these discussions also involve determinations around payout rates for grantmaking, especially in the face of higher demand for philanthropic funding across the nonprofit sector.  

Staff and Stakeholder Safety: With many foundations implementing remote worker policies, board members still must keep in mind the safety of staff and stakeholders. Business continuity plans and human resource policies should be in place to ensure that critical functions of the foundation continue even if staff are sick or away from the office. 

Board Meetings and Decision-Making Practices: Board business will need to continue throughout the COVID-19 outbreak, even with restrictions in place. Many foundations are encountering increased demands on staff and board members, resulting in more frequent meetings and decisions around policies and grantmaking.  

Communications: Board members serve as ambassadors for the foundation and play an essential role (along with the CEO) in crisis communications by sharing with the staff what they are hearing on the ground and sharing back through their networks information that the foundation has prepared for dissemination.  

Continual Assessment: With the evolving nature of the COVID-19 situation, board members should work together with the CEO to ensure the foundation is appropriately responding to emerging challenges and information, maintaining appropriate lanes to allow the CEO to do their job effectively. 

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Can the foundation hold a “virtual” board meeting or does it have to conduct its board meetings in person?

It depends. Each state has different laws regarding to what degree electronic communications can be used to conduct board meetings. Within Michigan, organizations can conduct board meetings virtually, as long as all participants are able to communicate.  

However, not all foundations have up-to-date bylaws and board procedures that allow them to take advantage of electronic communication options. CMF highly recommends that foundations regularly review their existing board procedures. Depending on the year that bylaws and other board procedures documents were created or updated, they may easily pre-date changes in state nonprofit law, including updates that allow for the use of modern remote communication and voting options.  

Boards should always review bylaws and other board-specific documents first before making any decisions or holding votes outside of regularly scheduled, normally formatted meetings of the full board. While virtual meetings may be an option for foundations, use caution before utilizing phone or online meetings for board meetings and voting. If this is not a standard practice of the foundation, please contact legal counsel for clarification regarding your board procedures.  

Please note that Executive Order 2020-48 relaxes the requirements of the Open Meetings Act, which impacts organizations that require public participation in their meetings. If you have specific questions about how current restrictions impact your organization, please contact Ask CMF.  

For more information, Board Source has resources on virtual board meetings. BoardSource is also making its “Virtual Meetings Untangled” publication free during the COVID-19 situation.  

For additional tips on streamlining virtual board meetings, BoardSource board chair, Cathy Trower released a blog post on best practices. She recommends focusing on the essential components of the meeting, setting ground rules and keeping the meeting to two hours or less. Her 12 suggestions focus on the importance of the board’s leadership and overall effectiveness that are worthwhile considerations whether meeting in person or virtually.  

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Fundraising

Are required minimum distributions (RMDs) from IRAs suspended for 2020? How does that impact the foundation’s donors?  

Phil Purcell wrote an article on the impact of the CARES Act on charitable giving. In the article, he writes: 

“The new law suspends required minimum distributions (RMD) for 2020 from IRAs, 401(k)s, 403(b)s and most other defined contribution plans maintained by an employer for individuals. Minimum distributions that have already started are still required from defined benefit pension plans and some 457 plans. However, required minimum distributions that would have had to start in 2020 do not have to start until 2021, including distributions from defined benefit pension plans and 457 plans. 

“This change will decrease the tax incentive for a donor to make a qualified charitable distribution (QCD)—an IRA charitable rollover—from an IRA in 2020. However, the change will help retirees who would have had to withdraw a greater percentage of their retirement accounts than expected or face a penalty, given that their RMD calculation for 2020 is based on the retirement account balance as of Dec. 31, 2019, and account values decline with the market." 

What does this mean for community foundations and other organizations that are actively raising funds from donors?  

A donor age 70.5 years or older can still make a Qualified Charitable Distribution (QCD) up to $100,000 from an IRA to a qualified charity. Typically, that amount could offset their RMD for the year. However, the CARES Act makes it so that RMDs are not owed this year, resulting in the donor trying to use a QCD, not obtaining an offset for future RMDs. In that regard, applicable donors may not find a tax benefit in making that particular kind of gift this year.  

Essentially, the change in the RMD is designed to make sure that a retiree’s income does not particularly suffer in the current economic environment. The ultimate impact on QCDs is a secondary outcome of that change. 

Foundations should encourage donors considering this (or any) option to discuss their plans with a qualified tax professional. There are a variety of giving benefits this year related to the CARES Act, even if a QCD does not have its typical advantages. 

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What resources for crisis fundraising are available for foundations and grantee organizations? 

The Association of Fundraising Professionals has a COVID-19 Resource Guide available with a list of relevant resources and tools on fundraising during this pandemic.  

The Fund Raising School at the Indiana University Lilly Family School of Philanthropy has launched its “Fridays with The Fund Raising School” weekly webinar series. These free webinars are focused on pressing challenges for fundraisers in the field, including many issues related to crisis fundraising during COVID-19 and periods of economic volatility.  Recordings of past webinars in the series are freely available.  

Indiana University and The Fund Raising School also have blog posts, podcasts and other resources focused on fundraising during the COVID-19 crisis available on their website. One such blog post, “Optimism, Communication, and Leadership: Fundraising During COVID-19" features a Q&A with experts on these topics of optimism, communication and leadership for nonprofits actively fundraising in these challenging times. 

Candid has created a “Funding for Coronavirus (COVID-19)” webpage, which includes a list of funding opportunities and emergency financial resources related to the COVID-19 outbreak.   

The Capital Region Community Foundation, a CMF member, hosted a webinar for local nonprofits to learn about crisis fundraising. Presented by community foundation staff and a local consulting group, this webinar reached dozens of local nonprofits with vital information about how to fundraise throughout the COVID-19 crisis.  

Russell James, Professor of Charitable Financial Planning at Texas Tech University, released an insightful article for major gift and planned giving officers actively fundraising during and after COVID-19, “10 Strategies for Post-COVID Fundraising in Complex and Major Gifts." 

The Giving Institute has a Resources webpage featuring COVID-related resources from many national fundraising and nonprofit consulting firms, including blogs, webinars, fact sheets, and virtual conferences. 

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How does recent legislation impact our foundation’s fundraising and contributions in 2020?

According to a blog post by Philip Purcell, a frequent speaker on the tri-state webinar series CMF leads in partnership with our colleagues in Indiana and Ohio, the CARES Act has numerous impacts on philanthropy in 2020. 

Universal Charitable Deduction: The deduction reduces a (non-itemizing) donor’s taxable income in 2020. This deduction is available for cash gifts of up to $300 per tax-filing unit (married taxpayers with a joint return that qualify can deduct only up to $300). Please note, these deductions are not available for gifts originating from private foundations, donor advised funds (DAFS), or supporting organizations, or for deductions forwarded from the previous year. CMF has created a Charitable Giving Incentive Toolkit that also includes website and social media graphics

New 100 Percent AGI Limit: For donors who itemize their giving, a 100% adjusted gross income (AGI) limit is available for cash gifts made to public charities within 2020. Gifts to donor advised funds, supporting organizations and private foundations do not apply.  

Suspended Required Minimum Distributions (RMD)s: RMDs to IRAs, 401(k)s, 403(b)s and other contribution plans are suspended for 2020. This decreased tax incentive for donors to make a qualified charitable distribution from an IRA may impact some donations. 

Corporate Contributions: Corporations’ limit on cash contributions has been increased from 10% to 25% of their taxable income in 2020. These must be cash gifts to public charities, not gifts to private foundations, DAFs and supporting organizations.   

Food Contributions: Contributions of food inventory have been increased from 15 to 25% in 2020. 

Nonprofit Loans: Nonprofits may be able to access loans to ensure they maintain their employees and bridge expenses in 2020. (For more information, see the FAQ item: “How can our non-private foundation learn more about the Nonprofit Relief Funds available through the CARES Act?” 

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Should foundation board members and volunteers assist with fundraising during the COVID-19 crisis? 

Many organizations require fundraising dollars as an essential component of their revenue. Staff should involve board members and volunteers in fundraising activity during (and after) the COVID-19 crisis.   

As Dave Sternberg wrote in a blog post for BoardSource, the current environment provides an excellent opportunity for board members to become involved in their organization’s fundraising activity.   

CEOs and development staff should provide board members with the tools to succeed in fundraising.  When combined with a board member’s willingness to get involved (or an institutional requirement for board members to help with fundraising), this can make for a powerful and effective combination that directly benefits the organization.   

Some potential steps for including board members (and other volunteers) in fundraising during the COVID-19 crisis include: 

  • Educate Board Members: In the face of countless community needs driven by COVID-19, staff should actively educate board members about their organizations’ needs and their role in bridging the fundraising gap. This crisis is an excellent time to teach (or remind) board members about the importance of fundraising, as well as the many ways that donors can give. Board members may have specialties outside of the nonprofit sector and be unfamiliar with how to speak with donors, tools for giving (DAFs, grants, etc.) or the behind-the-scenes work of the organization. By educating board members about these topics, staff may gain useful allies in their fundraising efforts.   

  • Use a Case for Support: Internal staff can build out a case for support and train board members to use it. With a consistent message and a clear understanding of the organization’s mission and need, board members can serve as compelling ambassadors to reach other donors and funders. 

  • Use Social Media: With staff, board members and volunteers working remotely, social media and technology are an essential means to reach potential donors. Board members who may have not previously used social media to promote their organization may find this to be a worthwhile time to start. Staff can provide a tutorial to help board members learn how to share the foundation’s messaging and campaign materials. (Please note that some social media fundraising campaigns may direct funds to individuals, rather than the charitable organizations they intend to benefit. For more information about this challenge, please see Can foundations make grants to crowdfunding campaigns for COVID-19 relief?

  • Use “Old Fashioned” Technology to Reach Donors: With social distancing, many people (including donors) may be feeling cut off from the world. Board members can help send “snail mail” letters to donors or call those who may otherwise not hear about the organization’s recent activities.   

  • Say “Thank You”: While staff may be providing behind-the-scenes support, board members can offer a personalized “thank you” to donors. This may take the form of a letter, email or Zoom meeting, but the relationship building can pay dividends after the current crisis is over. 

For organizations that are trying to encourage board members to participate in fundraising, consider implementing a “board fundraising policy” or include fundraising as a requirement of board service.  BoardSource has an easy-to-use sample policy available for board fundraising.  

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Have a question?

These FAQ's are designed to address grantmakers' questions related to their role in preparedness, response, mitigation and recovery from the COVID-19 pandemic and related period of economic volatility. Included in the Q&A responses below are samples, tools, articles, reports and other resources. Our team is also working closely in partnership with the Michigan Nonprofit Association (MNA) and Michigan Association of United Ways (MAUW) to remain connected around the needs of nonprofits and how funders can help.

We will continue to update this webpage with new Q&A items. If you have a question not shown here, we invite you to reach out via Ask CMF, a technical assistance service available to all CMF members. Questions may also be directed to CMF staff members by visiting our team page

Submit A Question

Disclaimer: The Council of Michigan Foundations is sharing the following sample documents, resources, tools and other materials as a member resource. Please note that these files are provided for educational purposes only, as a reference in developing your own materials. As such, be sure to consult your professional, legal and financial advisors in the development of resources, strategies and policies specific to your foundation’s needs. Further, this is a rapidly changing situation, and as such, be sure to refer to official sources for the latest news and information.

 


 

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