By Greg Ellison

Nonprofit business groups’ classification would curtail access to stimulus money

(April 9, 2020) As the covid-19 pandemic wreaks havoc with Maryland’s economy, the Ocean Pines Chamber of Commerce is working with similar entities across the state to ensure that business organizations are included in the next phase of federal stimulus money.

Executive Director Kerrie Bunting said her organization is classified by the IRS as a 501(c)(6) nonprofit organization. But unlike groups and organizations with the 501(c)(3) designation, donations to the former aren’t tax deductible.

“Chambers don’t get any money from the government at all unless you’re a tourism center,” she said. “They get town or county money to run the tourism side but not the chamber side.”

Bunting said the only groups in Maryland meeting those criteria are in Ocean City and Garrett County, with chambers solely reliant on memberships and sponsorships for financial backing.

The recent third phase of federal emergency funding for small businesses and industry, in part through the Economic Injury Disaster Loans program, did not include 501(c)(6) nonprofits, because the designation includes larger membership groups.

“The reason that the federal government didn’t include (c)(6) to begin with was because large foundations are involved, like the NFL,” she said.

Bunting said financial markers could be established to differentiate chamber of commerce needs from those with larger bottom lines.

“We need to limit the (c)(6) who qualify to some strata such as certain gross or annual revenue,” she said.

Bunting said the Economic Injury Disaster Loans program was discussed during a recent conference call with the Maryland Association of Chamber of Commerce executives.

“Under that, there’s a loan but then there’s a grant,” she said. “The only thing that a (c)(6) can do is just a onetime $10,000 grant just for payroll and the utilities.”

Bunting said those overhead costs generally account for the bulk of expenses paid by chambers.

“Its only $10,000, it’s one time and it is forgivable,” she said.

Bunting said in addition to highlighting the need to Maryland Sens. Ben Cardin and Chris Van Hollen, Garrett County Chamber of Commerce President and CEO Nicole Christian is planting seeds with Gov. Larry Hogan.

“She has been speaking directly with the governor seeing if Hogan, since he is on such a national stage, could do something or put pressure somewhere,” she said. “The hope is that (c)(6) can get some relief in the phase four program.”

Bunting said Christian also sent a formal communication to Hogan and encouraged cohorts to follow suit.

“She sent a letter to Hogan to see if he might be able to influence the phase four at the federal level, or is there’s something within the state … that he could create for chambers specifically,” she said. “She wanted all of us to do something similar just to show him that all the chambers are in the same boat.”