Letter to JB Pritzker, Governor of Illinois - Illinois GOP Asks Pritzker to Clarify PPP Guidance for Nonprofit Human Service Organizations

Letter

Dear Governor Pritzker,
We write today on behalf of the nonprofit human service organizations we represent to
express concern that state agencies, including Illinois Department of Human Services (IDHS)
and Illinois Department of Children and Family Services (IDCFS), have asked these
organizations to report to the state the status of a Payment Protection Program (PPP) loan. The
PPP was authorized by Congress in the CARES Act to allow businesses and nonprofits to keep
employees on payroll and off unemployment, given the impact of coronavirus on our
communities and these entities. Based on our understanding of new guidance issued by the state,
these nonprofits will need to comply with the state reporting requirement in order to receive
their expected payments from the state and risk a reduction of dollars awarded in current or
future state contracts as a result of the PPP loan being forgiven in part or in whole. To our
knowledge, currently, no other state is requiring human service providers to report to the state on
the status of their PPP loan or tying these loan dollars to state funding.
As you are aware, the State of Illinois has consistently underfunded these nonprofit
service providers. Many nonprofit organizations must raise significant charitable dollars to fund
the gap between the level of reimbursement provided by government contracts and the actual
cost of care. The COVID-19 pandemic has resulted in the cancellation of fund-raising events
and an overall decrease in the charitable donations needed for the survival of nonprofit
organizations.
The PPP loans, including any portion that is forgiven, is to be of full benefit to the
private organizations that have applied for and received them. It is Congress' intent to allow
private non-profit agencies to use any forgivable amount of the PPP to help cover the gap
between the level of reimbursement provided by government contracts and the actual cost of
care. This is being done to allow these organization to be able to weather the long-term economic
impact of the pandemic and keep their employees working and paid.
Congress did not intend funds from the PPP to be used by states to supplement their
budgets or offset dollars states typically pay for services through private nonprofit service
providers. The state's assertion that it may have the ability to deduct an amount equivalent to any
funds nonprofit organizations receive through PPP from what they are paid in their
contracts -- is a clear overreach.
We urge you to direct your state departments to withdraw their request for information
about PPP dollars and allow these funds to be used according to congressional intent as
outlined above. Nonprofit human service providers should not be penalized for their efforts
to maintain their operations during this crisis by a state agency that already counts on nonprofit
organizations to supplement the cost of care for children for whom the state has legal
responsibility.