Should my Church (or other Religious Institution) Apply for Federal Loans offered during this Pandemic?
By now, you are likely familiar with the SBA’s loans for hard-hit businesses during this national pandemic. All organizations have been impacted in some way by the coronavirus, including non-profit organizations. It is of some relief to hear that non-profit organization can also apply for governmental relief that is available under the CARES Act, such as the Paycheck Protection Program (although it is currently out of funds and no longer taking new applications) and the Economic Injury Disaster Loan Emergency Advance. Through a set of FAQ’s, the Small Business Administration made clear not only that faith-based organizations are eligible to receive financial assistance under the CARES Act, but also attempted to provide some protection from concerns regarding the impact on religious institutions receiving a federal loan. However, these assurances must be taken cautiously. Positives There are several clarifications that these FAQ’s provide that are encouraging for religious institutions, namely: Religious institutions are included in those eligible for the Paycheck Protection program, regardless of whether they provide “secular social services.”There are no special qualifications for religious institutions receiving these funds. The same limitations that apply to other recipients of these loans apply, including that forgiveness will cover non-payroll costs only up to 25% of the total loan. Loans can be applied to pastoral salaries.Organizations retain their autonomy and ability to make decisions, including the right to define the responsibilities of membership and select individuals to perform work (but see the caution below).Non-discrimination provisions, which are an inevitable part of federal grants, are intended to be...Continue reading