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Many will be shocked to learn that between 12,000 to 13,000 from 17,000 Catholic churches across the U.S. could apply for PPP loans.
Pat Markey, the executive director of the Diocesan Fiscal Management Conference, an organization of finance officers from Catholic dioceses, estimated that about 6000 Catholic parishes had had their applications for federal funds accepted in the initial round of PPP. Around 3000 have been granted loans, this time through the second PPP round.
Most people probably aren’t thinking about Catholic churches as small-scale businesses. Markey says houses of worship and the affiliated schools are working hard to keep their employees on their payrolls.
“The PPP isn’t about the federal government helping churches, the church or house of worship,” he tells. “PPP is about making sure that people are on payrolls, and the majority of the population is in the non-for-profit world. The majority of this society is churches and churches. There are people employed. Therefore, if all the issue is to keep employees on the payroll, the rest of us should be in a position to assist them.”
And Catholic churches weren’t the only religious institution seeking PPP money.
A recent study conducted by LifeWay Research found that 40 percent of Protestant churches in the U.S. also applied for government aid via the CARES Act or the Small Business Administration, and 23 percent of the pastors in those churches said that their applications were approved. This means that 59 percent of Protestant churches submitted applications for assistance were granted.
The bigger the church was, the greater the likelihood of applying for federal assistance. Half of the pastors of churches with 200 or more people reported that their congregation had applied for a loan in contrast to only a quarter of churches with less than 50 people.
A representative from The Jewish Federations of North America said that they conducted an investigation on April 21 and found the following “573 Jewish organizations were approved for PPP loans, which had the total amount at $276.9 million. Two hundred nineteen synagogues received just under fifty million dollars of loans.”
A further 391 Jewish organizations reported that they had submitted applications for loans and awaiting the government’s response. The requests were a total amount of $106 million, and the median value was $118,000. But, there were only 1,200 responses to The JFNA’s poll. Therefore, they believe that the accurate figures are much more.
As per the U.S. Small Business Administration, “Churches (including mosques, temples, and mosques synagogues, synagogues, and various places of worship) and church-related integrated auxiliaries and conventions or organizations of churches can be eligible to receive PPP as well as EIDL loans provided they satisfy the requirements of section 501(c)(3) in the Internal Revenue Code, and any other PPP or EIDL conditions.”
In essence, the conditions in the case of PPP credit are precisely the same regardless of whether a company or organization has a secular purpose or is not. Churches automatically receive the status of a nonprofit. As the house of worship employs 500 or less, it can apply for a federal loan in 2.5 times its monthly average pay. These loans and their 1% interest when 75 percent of the funds are utilized to cover payroll costs within the first eight weeks after the church gets the funds. The remaining 25 percent could be used to pay for rent or utilities, as well as insurance and other operating expenses.
If they qualify, U.S. houses of worship are most likely to seek federal assistance because of the decrease in contributions from the faithful , as they are staying in their homes. According to research conducted on Protestant congregations by LifeWay, 40% of pastors say that the amount of money they give has decreased compared to earlier in the year. Over half of pastors believe that the amount of money they give has dropped by more than 25% as well as 18% state that their giving is down 50 percent or more.
However, there are those within the Christian community who do not believe that churches should use PPP loans.
“It’s quite likely that if the majority of churches use PPP loans, it will easily be able to capture a third of the $350 billion allocated,” Jon Costas, the former Republican city mayor from Valparaiso, Indiana, wrote in Christianity Today last month. “There are social and economic justice issues to be taken into consideration by churches in suburban areas that could take grant funds from those who require more. I believe that seeking and receiving PPP funds is among the most significant issues that the church has to face in the coming decade. It sets a precedent shortly and could delay the work of the church if the conditions attached to the government’s funds do not align by Scripture.”
Markey, however, disagrees and cites the fact that PPP funds have been provided to U.S. churches “without any strings with no strings.”
“Our communication to the members was that if you require this money to ensure that your employees are employed, and you do not have other options, and you are in a position to apply,” he says. “If you’re not in need of it, and if there are alternatives to satisfy those needs… then don’t bother applying since there are many small businesses in the market who require that money. Since we’ve seen how not all churches have used and we’re sure that our members adhered to that recommendation. “
Concerning Costas’s budget, Markey was incredulous.
“When you’re discussing the magnitude and breadth of it, it’s only a fraction of it,” he states. “A tiny church on the corner is similar to a small company in that we employ individuals—the whole point of the law concerns making sure that people are employed. We can’t visit Wall Street and sell stock as a corporation would. We’re not able to access the funds that public companies do. If all synagogues, mosques, and churches across the America United States took advantage of this, you’d never reach $3 billion. It’s a huge sum, but it’s a tiny portion of the PPP value. We’re not here to steal any money from anyone else. We’re simply trying to keep our employees employed and our places of worship in good order.”