Last year many arts and culture nonprofits struggling to cope with closures and restrictions in the wake of COVID-19 were able to take advantage of multiple relief grants and funding, chief among them funds made available through the CARE Act and forgivable loans that were part of the Paycheck Protection Program (known as ‘PPP’).
Even so, many nonprofits still found themselves in troubled financial waters as their facilities remained closed and/or audiences stayed home.
Good news: the nonprofit arts and culture sector is about to receive another injection of much-needed relief funding via PPP (Part 2) and funds made available through the Save Our Stages (SoS) Act.
Of course, there’s a catch (you knew it sounded too good to be true, right?). In order to prevent “double-dipping”, both the PPP Part 2 and the SoS funding guidelines stipulate that you can only apply for one of these…not both. If you apply for PPP Part 2 you can’t apply for SoS, and vice versa. And that means that before you apply to either one you better be well-informed on what costs they will cover, award sizes, eligibility criteria, etc. so that you can make an informed decision and get a shot at receiving an award which will best suit your org’s needs.
To help you do that, I’ve created a run-down of some of the most important information about each opportunity as well as a chart so you can easily compare and contrast your options.
First up, let’s examine PPP Part 2.
The Paycheck Protection Program (or PPP, for short) was/is a low-interest loan program offered through the Small Business Administration (SBA) and administered by local lenders. Part 1 was rolled out as part of the CARES Act and helped small businesses, nonprofits, and certain other entities to cover the cost of their payroll, mortgage, utilities, and similar qualifying costs. The best part is that this loan was forgivable so long as you met all of their requirements and submitted the correct paperwork.
At the same time that PPP Part 1 was being rolled out, the CARES Act also allocated another $75 Million to the NEA to distribute to struggling arts orgs. Many of you reading this probably applied and already received some of those CARES Act funds as well as a PPP loan.
But with this next round (PPP Part 2, released as part of “The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act”) the government is ensuring that arts and culture organizations cannot “double dip” into both a PPP loan and a SoS grant. We can argue later as to whether or not this was cool of them…
For now, here is a broad overview of what you need to know about PPP Part 2:
- PPP Part 2 is a $284 Billion Relief Package for small businesses and nonprofits
- PPP Part 2 extends the costs covered by PPP Part 1 out to March 31, 2021
- This is considered a second draw of forgivable loans
- Your organization can receive up to 2.5 times the average monthly payroll costs in one year prior to the loan or calendar year
- The maximum loan amount is capped at $2 Million
- To be eligible you must fulfill the following criteria:
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- Must not have over 300 employees
- Have used or will use all of the PPP Part 1 money you were loaned OR have been eligible for CARES Act funds but did not receive a PPP Part 1 loan
- Demonstrate at least a 25% reduction in gross receipts in the 1st, 2nd, or 3rd quarter relative to the same 2019 quarter(s)
- Cannot also receive SoS funding
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- To have this loan forgiven…
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- Loan forgiveness will be equal to the sum of payroll costs as well as covered mortgage, rent, and utility payments, covered operation expenses, property damage costs, supplier costs, and worker protection expenses during the covered period
- 60/40 allocation between payroll and non-payroll costs to receive full forgiveness still applies
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- Ok, so how do I get a second PPP loan?
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- These loans will be doled out by lenders approved by the SBA. We expect information about applying and deadlines to be available the 2nd or 3rd week of January.
Next up is the rundown on Save Our Stages (SOS) Funding:
The National Independent Venue Association (NIVA), along with Senators Amy Klobuchar (D-Minn) and John Cornyn (R-Texas), collaborated to pass a $15 Billion “Coronavirus Response and Relief Act Supplemental Appropriations Act” which included a section dedicated just to funding shuttered venues. Thankfully, although the act was originally aimed at indie venues, in its final form it also includes performing arts nonprofits!
This pot of funding is being referred to as ‘Save Our Stages’ grants (or SoS, for short) and funding will cover many of the same costs as are eligible under PPP loans. However, there are definitely differences between the 2 funds that you should understand before pursuing one.
- Here is a broad overview of what you need to know about SoS Funding:
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- This fund is meant to support shuttered venues, including live performing arts organizations and those who produce performing arts
- This is for costs incurred March 1, 2020 – December 31, 2021
- Supplemental grants may be issued for costs incurred from March 1, 2020 – June 30, 2022
- Allowable expenses include payroll (including contractor payments), rent, fixed costs like debt and mortgage, maintenance expenses, admin costs, and other expenses
- Applicants will calculate their grant amount based on 45% of an entity's earned revenue in 2019
- Total grants received are capped at $10 Million per recipient
- After receiving an initial grant, qualified applicants that experience a 70% revenue decline as of April 1, 2021 can receive another supplemental grant equal to half their initial award
- Supplemental grants are only awarded after applications received in the first 60 days have been processed
- The first 14 days in which the funding is available, access will be limited to applicants that demonstrate a revenue decline of 90% or more from April 1 – Dec 31, 2020 compared to the same period in 2019
- The second 14 days will be limited to those with a revenue decline of 70% or more
- Relief funds already accessed through the CARES act will not count as revenue for this calculation
- To be eligible, you must fulfill the following criteria:
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- Be a nonprofit organizations that as a principal activity organize, promote, produce, manage, or host live concerts, shows, theatrical productions, and other events by performing artists
- Demonstrate a 25% decline in gross earned revenue in one calendar quarter of 2020 compared to the same quarter in 2019
- Applicants should have no less than 70% of earned revenue related to a live event generated through ticket sales, production fees or reimbursements, nonprofit education initiatives, sale of event beverages, food, or merchandise
- If you receive funding, you will be required to maintain four years of employment records after receiving the funds and three years of all business records.
- An applicant can have received a PPP forgivable loan for the CARES act, but cannot receive a second draw on PPP and still apply for SoS – you must choose
- Ok, so how do I get a second PPP loan?
- An administrator has not yet been chosen for this grant and deadlines for application have not yet been set.
This is a lot of information to take in and since the stakes are high for many organizations still feeling the sting of COVID-19 closures, you want to be sure that you are making the right choice. I can’t tell you what you should do. But I did create 2 tools to help you make an informed decision: a handy dandy infographic for you to quickly compare key differences as well as more in-depth summary write-up.
Here’s the info-graphic (you can right-click to save or print this so you can see an enlarged version):
And you can click below to download the H.R. 133 Act PPP and SoS Emergency Funding Summary.
CNPS - HR133 Overview - PPP and SoS Emergency Funding Summary____________________
I hope you have found this article helpful. Please feel free to print the chart, the funding summary, share this article with colleagues, and leave questions in the comments section!
I will also update this article once deadlines and links have been released.
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January 2021 UPDATE:
January 14, 2021 at 3pm EST the U.S. Small Business Administration (SBA) is hosting a webinar to go over the “Shuttered Venue Operators Grant”. This is the Save Our Stages (or SoS) funding that we've been talking about for performing arts nonprofits.
If you're reading this in time, you can register here:
https://www.eventbrite.com/e/shuttered-venue-operators-grant-webinar-registration-136050549857?keep_tld=1
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March 14, 2021 UPDATE:
The American Rescue Plan Act of 2021 (ARPA) has officially been passed and with it comes important updates to Save Our Stages (SoS), Shuttered Venue Operators Grant (SVOG), and PPP Part 2. I wrote up a summary of the changes for you and created a Drive folder with a compilation of all the primary resource documents we have so far.
