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Churches are receiving federal loans to keep employees paid


Philippe Lissac / Godong

John Burger - published on 05/12/20 - updated on 05/12/20

The Paycheck Protection Program has approved loans to some 9,000 Catholic parishes.

Between 12,000 and 13,000 of the 17,000 Catholic parishes in the United States applied for loans from the federal Paycheck Protection Program, CBS News reported.

“Pat Markey, the executive director of the Diocesan Fiscal Management Conference, an association of finance officers from Catholic dioceses, estimates that around 6,000 Catholic parishes had their applications for federal funding approved in the first round of PPP and around 3,000 have received loans so far in the second round,” CBS said.

While that might look like an unconstitutional act of government funding religious institutions, Markey said that houses of worship and their affiliated schools are simply trying to keep employees — most of whom are lay persons — on their payrolls.

“The PPP isn’t about the federal government assisting houses of worship or churches,” Markey told the news outlet. “PPP is about keeping people on payrolls and a large segment of our society is the not-for-profit world. And a large segment of that society are churches and houses of worship. And they have people on payrolls too. So, if what this is about is keeping people on payrolls, then we all should have availability to do that.”

Churches of other denominations are seeking government help as well to stay solvent during the pandemic shutdown. An organization called LifeWay Research found that 40% of Protestant churches in the U.S. applied for government assistance offered either through the federal Small Business Administration or the Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed March 27 to help the economy during the pandemic. Almost a quarter of of those churches’ pastors (23%) reported that their applications were accepted — meaning that 59% of Protestant churches that applied for assistance were approved, CBS explained.

A representative for the The Jewish Federations of North America told CBS News that as of April 21, “573 Jewish organizations were approved for PPP loans, with a total value of $276 million. Among that group were 219 synagogues who received just over $50 million in loans.”

According to the Small Business Administration, churches, temples, mosques, synagogues, and other houses of worship, as well as “integrated auxiliaries of churches, and conventions or associations of churches qualify for PPP and [Economic Injury Disaster Loan Program] loans as long as they meet the requirements of Section 501(c)(3) of the Internal Revenue Code, and all other PPP and EIDL requirements.”

CBS explained:

Essentially, the requirements for PPP loans are the same whether a business or organization is secular or not. Churches are automatically granted nonprofit status. So, as long as a house of worship employs 500 people or fewer, it can now request a federal loan for an amount 2.5 times its average monthly payroll. Those loans, plus their 1% interest, will be forgiven by the government as long as 75% of the funds are used to cover payroll expenses in the eight weeks after the house of worship receives the funds. The remaining 25% can be used to pay rent, utilities, insurance and other operating costs.

Many churches have seen significant drops in donations as their congregations are not able to gather for services.

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