Applicants are ineligible for the SBA loan if more than one-third of their revenue comes from legal gambling
By Evan Davis, International Association of Fire Chiefs
As a sad consequence of the SARS-CoV-2 pandemic, firehouse bingo halls across the US are empty. Bingo cards and ink stoppers have been replaced with stay-at-home orders and social distancing. While this was the right response to prevent the spread of COVID-19, an unintended consequence has been devastating financial impact for private nonprofit fire departments.
On June 5, the IAFC urged the U.S. Small Business Administration to adjust the Economic Impact Disaster Loan assistance program in order to provide greater financial assistance to private nonprofit fire departments.
Fire departments recognized under Section 501(c) of the tax code often face unique challenges in raising the funds needed to maintain their operations. Many of these agencies rely upon local community fundraising efforts, like games of bingo and raffles, to raise the revenue to support their operations. However, the need to shelter at home and increase social distancing has forced almost all of these fundraising efforts to shutter. As a result, private nonprofit fire departments are struggling to plug an enormous hole in their budgets.
The SBA’s EIDL program may be an attractive opportunity for these agencies. Unfortunately, the SBA’s regulations make applicants ineligible if they generate more than one-third of their revenues from legal gaming activities, including games of bingo and raffles. While this cap may make sense in an effort to limit federal financial assistance available to some for-profit entities such as casinos, the IAFC believes its application to nonprofit fire departments is unintentional.
On June 5, the IAFC sent a letter to Jovita Carranza, the SBA Administrator, requesting that she waive this prohibition on gambling for private nonprofit fire departments. Until the economy improves and fire departments are able to reconvene their community-based fundraising efforts, it is critical that the SBA acts to expand the assistance available to private nonprofit fire departments.
The IAFC believes that lifting this unintentional restriction on private nonprofit fire departments will be an important way for the federal government to ensure that fire departments have the financial and operational resources needed in order to continue serving their communities.
Private nonprofit fire departments are eagerly anticipating the day when they can break out the bingo cards and raffles and continue serving as an important social gathering point in their communities. Until that day arrives however, the IAFC urges the SBA to assist these private nonprofit fire departments in maintain their operations and vital community service.
Evan Davis is a strategic government relations manager for IAFC