By Elizabeth Solsburg and Michael Stechshulte/FAITH Catholic
When the COVID-19 crisis abruptly shuttered small businesses across the country, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide assistance to individuals and businesses who’d experienced a financial impact. Part of the Act included a paycheck protection program (PPP) designed to help small businesses continue to be able to make payroll. The program, which was managed by the Small Business Administration (SBA), required the money to be used for employee compensation and other restricted uses.
Among the businesses that received aid were a number of nonprofit organizations, such as symphony orchestras, museums, universities, and churches. The majority of Catholic parishes (approximately 13,000 out of 17,000) applied for the government’s payroll protection program, and nearly 10,000 received funds that enabled them to continue to pay employees when limited funds were coming in through donations.
How have PPP funds helped Catholic organizations and parishes?
Without the funding from the PPP, lay employees would have been furloughed, resulting in a loss of services to parishes, schools, and communities. Some organizations may have had to close.
Why did Catholic Church entities receive government funds?
There have been some comments that the Church should not receive funds from the government since the Church does not pay taxes. While it is true that churches do not pay property taxes, they do pay the same payroll taxes as any other employer. Church employees, who are primarily lay people who work for fairly small organizations and who depend on their salaries to provide for themselves and their families, pay federal, state, and local income tax.
Had they not had the assistance of PPP loan money, many of those people would have been furloughed and become dependent on other government funds, such as unemployment compensation.
According to Joseph Eisenhauer, Ph.D., dean of the College of Business Administration at the University of Detroit Mercy, because the PPP was designed to prevent economic catastrophe, not to promote or endorse any particular organization, religious organizations were eligible to apply for the funding. “The plan was to help employees remain employed by keeping organizations operable. Whether that’s a faith-based or non-faith-based organization, economically it doesn’t matter,” Dr. Eisenhauer said.
Isn’t the Catholic Church a big, wealthy organization?
People sometimes think the Church is a monolith — something akin to a big corporation with the pope as its CEO. But that is not the reality. Each parish or school functions as an independent unit. Their expenses must be paid out of donations or tuition they collect. Parishes usually pay some kind of diocesan assessment to their dioceses to provide ministries parishes could not do on their own.
By the numbers
On July 6, the Small Business Administration released data showing which businesses received PPP loans. The SBA set the framework of rules for qualifying for a PPP, but individual lenders made the determinations about who was qualified for a loan.
Here are some of the numbers:
- 86.5 percent of loans were for less than $150,000
- 4.9 million loans have been made
- $521 billion in total loans
- $107,000 is the average size of a PPP loan
- 10,000 is the approximate number of Catholic parishes that received PPP loans
- Restaurants, medical offices, and car dealerships are the top loan recipients.
(Disclosure: This report was prepared by FAITH Catholic, which received a PPP loan through the CARES Act.)