The American Society of Association Executives has continued a push to have 501(c)(6) trade and professional associations included in the Paycheck Protection Program that will almost certainly be part of the next federal financial-relief package taking shape, called CARES 2. Members of the U.S. Congress will return to Washington, D.C. on Monday, May 11 but the details of the bill are already being drafted.
Many associations that were financially solvent before the COVID-19 pandemic are now in distress, in large part because they’ve had to cancel their in-person events due to the travel lockdown. According to ASAE’s Association Operating Ratio Report 15th Edition, published in 2016, meeting and education-program revenue represents 29.4 percent of total revenue for trade associations at the median (50th percentile), and it represents 41.3 percent of total revenue for professional associations at the median. In comparison, member dues represent 40.7 percent of total revenue for trade associations at the median, and they represent 28.6 percent of total revenue for professional associations at the median.
In the third week of week of April, Congress acted to replenish the PPP, initially established by the first CARES Act to help small businesses, sole proprietors, 501(c)(3) nonprofit groups, and tribal businesses cover their payroll, rent, and certain other costs. Now, members of Congress from both major parties are recognizing the plight of 501(c)(6) trade and professional associations and supporting their eligibility for PPP in CARES 2.
ASAE is making headway with members of Congress, as evidenced by the numerous bipartisan sign-on letters indicating support for 501(c)(6) relief during the COVID-19 crisis. One such letter was spearheaded by Reps. Chris Pappas (D-NH) and Brian Fitzpatrick (R-PA) and signed by 60 other House members. It urges House leadership to make local chambers of commerce and other 501(c)(6) associations eligible for assistance through the PPP.
Another letter led by U.S. Senators Bill Cassidy (R-LA) and Joe Manchin (D-WV) was sent to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) on April 27 with 18 co-signers, urging leadership to support PPP eligibility for associations.
“Organizations structured under 501(c)(6) bring the community together to help negotiate shared challenges and promote local economic development,” Cassidy said in the letter. “Unfortunately, just like the small businesses they serve, many are now experiencing their own financial challenges. If these organizations are unable to survive, the path to recovery for our hard-hit Main Street economy will be even more difficult.”
With the timing of this next relief package uncertain—the debate over whether CARES 2 funding should also go to states and cities could drag out the process for weeks—ASAE continues to ask its association members to contact their Congressional legislators to share stories about how the pandemic has affected the work they do for specific industries and professions, and to ask that 501(c)(6) associations be included in the next round of PPP.
“Just like the industries and professions they serve, associations are struggling to stay afloat during this unprecedented crisis,” said ASAE President and CEO Susan Robertson, CAE. “ASAE is so appreciative that members of Congress on both sides of the aisle are recognizing the dire circumstances associations find themselves in during this pandemic. We also are thankful for the support of our many members who are trying their best to provide service to their stakeholders yet have still been active in our efforts to enhance awareness of our community on Capitol Hill. The need for federal assistance for associations is real and immediate. We stand ready to assist legislators and congressional staff in whatever capacity to ensure associations have a safety net to get through this global pandemic and continue their essential work.”
For associations looking for ways to drum up revenue while meetings and events cannot be conducted in person, some ideas can be found at www.wildapricot.com/blogs/newsblog/2014/08/12/15-ideas-for-non-dues-revenue