Cultural Organization Economic Recovery Program
Frequently Asked Questions
Can you help me determine eligibility?
The first step in determining eligibility is identifying whether or not you have lost revenue when you compare the period of March 10 – December 31, 2019 to March 10 – December 31, 2020. This refers to TOTAL revenue. If your earned revenue (from all sources) has decreased, but your contributed revenue, including any PPP funds that you received, has increased enough to offset the decreased earned revenue, then you do not have lost revenue and you are not eligible for this program. Remember, you need to explain the loss, and maintain records that support the loss that you have claimed.
How much can I request from the program?
Organizations can apply for a grant of up to the lesser of $100,000 or 3 months of supported operating expenses, as evidenced by the organization’s Internal Revenue Service Form 990 for FY19. You can calculate 3 months of approved expenses.
What counts as a supported operating expense?
- For applicants with more than 10 full time equivalent employees: Employee payroll and benefit costs, current mortgage payments and mortgage interest, rent, utilities and interest on other debt obligations. Employee expenses only include workers who receive a W-2 wage reporting form from the applicant organization.
Your maximum eligible expenses are 3 months, or 25% of the totals reported on your 2019 Internal Revenue Service Form 990.
If you file the long form 990 (not the 990EZ) you can see these expenses on Part IX – Employee expenses on line 5, 6, 7, 8, 9, 10, and Occupancy expenses on line16. If you file the 990-EZ, these expenses are itemized on Part I, line 12 and 14.
- For “Small Organizations” (those with 10 or fewer full time equivalent employees): You can include the above expenses and general operating expenses except for capital expenditures.
How do you define “Small Organization?”
For the purpose of this program, Small Organizations are defined as those organizations which have 10 or fewer Full-Time Equivalents Employees (FTEs) for calendar year 2019. FTE is a method of calculating your total workforce, including full time, part-time and seasonal employees . This applies only to workers who receive a W-2 wage reporting form from the applicant organization.
How do you calculate FTEs?
You can visit IRS.gov to learn more about who to count and how to determine how many FTEs your organization has (questions 39 and 40 focus on how to calculate FTEs). After reviewing the IRS.gov instructions, you may also find this FTE calculator helpful.
What other documentation is required?
You will need to identify the expenses requested to be covered by the grant funds. You will submit one PDF that includes invoices or other supporting documents for expenses that occurred between March 10 – December 31, 2020. This could include IRS Form 941 (Quarterly Employee Tax Filing), benefit invoices, mortgage statements, documents that confirm monthly rent (invoices, or necessary portions of a lease), invoices for payments made to utilities, and/or receipts for eligible purchases. In the application, you will explain what expenses you have included, and what documentation you have attached.
How do we show the loss of revenue?
We are not asking you to attach documentation for your losses to this application. However, we may ask for it in the future, so you should keep the record of how you calculated the loss of earned or contributed revenue. This could include:
- Canceled classes, performances, exhibitions, shows, residencies, festivals, fundraising events, etc.
- Organizational closures and/or suspended operations
Lost sales, commissions, vendor fees from cancelled markets, events, exhibitions, etc.
Which 990 should we submit?
In the guidelines when we refer to “the organization’s 2019 Internal Revenue Service Form 990” what we mean is the IRS 990 Form that reports on the organization’s fiscal 2019 (FY19). Do not include, use, or upload an IRS form 990 that includes the period of March 10, 2020 or later. If an organization does submit a 990 that includes March 10, 2020 or later, the organization will still be reviewed and can be awarded a grant, it may just result in a lower award amount because of decreased spending once the pandemic began.
What happens if our organization accidentally submits more than one application?
The application submitted first will be accepted. Any applications submitted by the same organization afterwards will be deemed ineligible. If you need to ‘unsubmit’ an application, contact Sara Glidden before 5pm on December 11, 2020.
Some of our programs have reopened, but some haven’t. What Phase are we?
For the purpose of this program, the Phase that relates to your primary business operation is the Phase that you should check on the application. For example, if you are a theater producer, and you also run a summer theater education program that you were able to run during this past summer, which one of these activities makes up most of your operations in a normal year? That is the Phase that you should pick.
My organization is currently closed, and I don’t know when we will re-open. May I still apply?
Yes, you may still apply. Your intent to reopen is sufficient.
What makes an application potentially eligible for the “Extraordinary Need”?
On an extremely limited basis, Mass Cultural Council and EOHED may consider a small number of awards exceeding $100,000. Organizations must demonstrate extraordinary need and document that they are facing remarkable challenges that threaten the viability of the organization. These organizations can request up to $500,000 if they can:
- Clearly articulate the extraordinary need.
- Demonstrate more than $500,000 in lost revenue (between 3/10/20 and 12/31/20).
- Demonstrate three months of supported operating expenses of at least $500,000, as detailed under “What can we use these funds for?” section below and as evidenced by the organization’s Internal Revenue Service Form 990 for FY19.
- Provide invoice(s) for eligible expenses of at least $500,000 in expenses incurred in any three month period occurring between 3/10/20 and 12/31/20.
Mass Cultural Council and EOHED reserve the right to award less than the amount requested. Awards exceeding $100,000 for extraordinary need, if any, will be awarded at the discretionary judgment of Mass Cultural Council and EOHED.
If My Organization Receives a Grant
What can we use these funds for?
For most organizations, the funds may only be used for Employee payroll and benefit costs, current mortgage payments and mortgage interest, rent, utilities and interest on other debt obligations. Organizations that receive funds under the “Small Organizations” designation may also use funds for general operations.
We received funds from the Payroll Protection Program (PPP). Can this cover the same expenses?
This program covers the same type of expense but cannot be used to pay expenses that another financial aid program has already covered. This is considered a Duplication of Benefits (see below). If PPP funds covered most of your eligible expenses in the period starting March 10, you can only apply for the portion that PPP did not cover. This limitation applies to all federal funds, regardless of the source.
May I include projected expenses?
If you plan to incur expenses between the time of application and December 31, 2020, please describe what that expense will be (in 1-2 sentences) and expect to submit proof that the expense was paid within 45 days of receiving your grant award.
These are costs that have been incurred from 3/10/20 through time of application or will be spent from time of application through 12/31/20.
How do I know if my organization is part of relevant districts/initiatives or designations?
You will not be asked if your organization is in a Gateway City or Under-resourced Rural Town. We will use the organization address to apply these designations to applicants for scoring and review.
- Gateway City: The Legislature defines 26 Gateway Cities in the Commonwealth, which are Attleboro, Barnstable, Brockton, Chelsea, Chicopee, Everett, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Leominster, Lowell, Lynn, Malden, Methuen, New Bedford, Peabody, Pittsfield, Quincy, Revere, Salem, Springfield, Taunton, Westfield, and Worcester.
- Under-resourced rural town: “Under-resourced rural” towns are towns which share characteristics of Gateway Cities, but are rural. They are defined as having:
- population of less than 10,000 or a population density of less than 500 per square mile(rural definition used by Massachusetts Executive Office of Education)
- AND median household income below the state average
- AND rate of educational attainment of a bachelor’s degree or above that is below the state average
Towns that meet this definition include: Adams, Athol, Ayer, Becket, Bernardston, Buckland, Charlemont, Cheshire, Chester, Colrain, Cummington, Dalton, Eastham, Egremont, Erving, Florida, Gill, Gosnold, Great Barrington, Hardwick, Hatfield, Huntington, Lenox, Middlefield, Montague, Monterey, Northfield, Orange, Palmer, Plainfield, Royalston, Russell, Sandisfield, Savoy, Spencer, Sunderland, Wales, Ware, Warren, Wellfleet, Winchendon
In your application you will be asked if you participate in one of the following:
- State Designated Cultural District: Includes organizations within the district as well as organizations outside the geographic bounds of the district that are part of the district partnership.
- Transformative Development Initiative District: TDI Districts are mixed-use with a commercial component, compact—with a five-minute walking radius or less—and are defined by a walkable, dense physical environment.
- Business Improvement District (BID): There are fewer than 10 BIDs in the state and you would know if your organization was participating in a BID because it would have signed an agreement and would be paying into a shared fund to support BID activities.
What is EOHED?
The Executive Office of Housing and Economic Development, a state agency of the Commonwealth of Massachusetts, led by Secretary Mike Kennealy, prioritizes economic opportunity for residents, collaborative leadership in communities, and an environment that supports job creation and business growth. EOHED also supports new housing for residents through targeted investments.
Non-Approved Use of Funds
What uses of these funds are prohibited?
- Major equipment purchases
- Construction, purchase, or capital renovation costs of facilities or land
- Compensation to foreign nationals, including traveling to or from foreign countries when those expenditures are not in compliance with regulations issued by the U.S. Treasury Department Office of Foreign Assets Control (OFAC Sanctions/NEA guidelines)
- Visa costs that are paid to the U.S. Government
- Subgranting or regranting
- Costs of entertainment, including amusement and social activities such as receptions, parties, galas, dinners, etc., and any associated costs including catering, alcoholic beverages, planning, staffing, supplies, etc.,
- Rental of any property owned by any individuals or entities affiliated with the non-Federal entity for purposes such as the home office workspace
- Costs of goods for resale are unallowable. This includes the sale of concessions, promotional merchandise, or items purchased to sell.
- Duplication of benefits
What qualifies as a “Major equipment purchase”?
The purchase of equipment (defined as an item valued at $5,000 or more per unit, with a useful life of more than one year) is not an eligible use of these funds.
What is “duplication of benefits”?
A duplication of benefits occurs when an organization, receives financial assistance from multiple sources for the same purpose, and the total assistance received for that purpose is more than the total need for assistance. Duplication of benefits occurs when financial assistance is provided to an organization through a program to address losses and the organization has received (or would receive, by acting reasonably to obtain available assistance) financial assistance for the same costs from any other source (including insurance), and the total amount received exceeds the total need for those costs. If an organization is determined to have received a duplication of benefits, they will be required to return the funds.
We don’t know if our PPP funds will be considered a grant or a loan. Do we need to show that we received PPP?
Yes. Whether treated as a loan or a grant, these are federal funds and you need to check off that you received this money, and you need to be careful about duplication of benefits.
We have reopened – can we apply?
We aren’t in a Gateway city – can we apply?
We have no paid staff – can we apply?
The answer to all of these, and other questions in the list of Funding Prioritization is yes. These all relate to funding priorities, but are not eligibility requirements.
Can we apply for a future expense?
Only expenses through December 31, 2020 are eligible.
We are a “Small Organization.” What does ‘operating expenses’ include?
Operating expenses include all of the costs for operating your organization, except for capital expenses. So, things like payments to independent contractors, internet providers, office supplies, etc. Really – everything.
What do you mean when you say we can’t use funds for compensation to foreign nationals?
The guidelines state that one prohibited use of funds is “Compensation to foreign nationals, including traveling to or from foreign countries when those expenditures are not in compliance with regulations issued by the U.S. Treasury Department Office of Foreign Assets Control (OFAC).”
This means that funds cannot be used for expenditures not in compliance with OFAC to either foreign nationals or for travel to or from foreign countries. It relates only to those countries on the Treasury Department sanctions list, which is online at https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information.