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Senate passes bill to aid nonprofits with unemployment reimbursement

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A bill co-sponsored by Sen. Tim Scott that allows nonprofits to pay states only 50% of unemployment costs upfront was passed unanimously in the U.S. Senate July 2.

The bipartisan bill, called the Protecting Nonprofits from Catastrophic Cash Flow Strain Act (.pdf), also was sponsored by Sens. Sherrod Brown, D-Ohio; Chuck Grassley, R-Iowa;  and Ron Wyden, D-Ore.

"Nonprofit organizations play a vital role in our communities, especially during this time of uncertainty for so many American families," Scott said in a news release. "This bipartisan legislation protects these vulnerable organizations from being placed in unnecessary hardship in the midst of the pandemic. I’m grateful for the support of my colleagues on this issue and looking forward to this being signed into law."

While the Coronavirus Aid, Relief and Economic Security Act allowed nonprofits to reimburse 50% of unemployment benefit costs to the state instead of the previous 100%, nonprofits would still have to pay 100% of the costs up front and wait for federal reimbursement via the state, according to the release. Now, only 50% of the nonprofit’s net cost is required up front.

"Nonprofit groups like food banks have been critical in helping their communities through the pandemic and economic crisis," Wyden said in the release. "Many are struggling to maintain services as they have been forced to furlough their own employees. Our proposal is a common sense fix that will help nonprofits maintain the cashflow needed to survive this crisis and continue serving others in need."

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