June 03, 2020
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After coronavirus empties parishioners’ pockets, churches get a government boost

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BDN | BDN
Deacon Timothy Dougherty and the Rev. Anthony Kanagaraj Chinnaiyan celebrate Mass Sunday at St. John Catholic Church in Bangor. Churches, along with other organizations eligible to participate in the Paycheck Protection Program, are now in the various stages of applying for loans.

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WASHINGTON, D.C. — Since the coronavirus pandemic forced his church’s doors to shutter and confined his congregants to their homes, Dexter Easley, the pastor of the New Life Christian Fellowship in Goose Creek, S.C., has been overseeing deliveries of food and cleaning materials to families in the community.

At the same time, he has been doing everything to keep his eight employees on the payroll and said he’s prepared to reach into his own pocket if necessary to avoid furloughs.

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A new $350 billion fund could now allow him to keep paying staff as revenue dries up and resources grow more scarce.

“The needs of the church, in meeting the community needs, continues to expand,” said U.S. Sen. Tim Scott, R-S.C., who has worked closely with Easley over the past few weeks.

Responding to Easley’s plight, and that of thousands of others, Scott fought to ensure houses of worship, along with nonprofits, were eligible for the Paycheck Protection Program, a federal initiative intended to keep small businesses afloat during stay-at-home orders.

Institutions with fewer than 500 employees who principally reside in the United States can apply for up to $10 million in government loans and receive up to 2.5 times their average monthly payroll expenses, with an annual compensation cap of $100,000 per employee. Funds can be used to cover wages, sick leave, vacation, retirement benefits, insurance premiums, rent, utilities and other qualified expenses.

The funds are first come, first served, and the last day to apply is June 30. Recipients will not have to pay down the loans for six months or more, and the debt is entirely forgivable if the borrower uses the money for specified purposes and maintains its pre-pandemic level of employment, including hiring back workers who were cut.

“Payroll is payroll,” Scott said in an interview with The State earlier this week. “The church as an organization has the same payroll obligations and responsibilities as a small business.”

The program is being overseen by the Small Business Administration, with loan applications being handled by financial lenders.

Churches, along with other organizations eligible to participate in the Paycheck Protection Program, are now in the various stages of applying for the loans.

Easley described the process as “pretty easy so far” but is still waiting to receive the money.

“I have a friend who got his in less than 48 hours, I have a friend who got it in five days,” Easley said, “so we are looking for ours to come in really soon.”

But elsewhere there are already lingering problems with the program’s implementation and concerns that Congress didn’t give the program enough money to help everybody in need of assistance. Negotiations are now underway for a second round of financing, but partisan bickering led Senate Democrats on Thursday to block a Republican proposal to add an additional $250 billion to the program.

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Galen Carey, vice president of government relations for the National Association of Evangelicals, agreed the process hasn’t been easy for everyone.

He described some churches being turned away from banks that have already hit their lending limits, while others are having difficulty filling out paperwork that wasn’t designed with houses of worship in mind.

“That’s something the administration could handle on its own,” Carey said, “make forms that are specifically for this program — that would clear up a number of issues.”

To help churches work through this new process, Vanderbloemen, an executive search firm that works with schools, nonprofits and religious organizations, launched a free-to-use website offering a checklist and advice for loan applicants. The firm is also hosting livestream panels with Scott and financial experts.

CEO William Vanderbloemen said his firm — a small business that applied for a loan through the program and was one of the first to be approved last Friday — began hosting livestreams on the provision, once it learned that its clients were unaware that churches and nonprofits would be eligible. On the eve of the bill’s passage, 17,000 people tuned into a Facebook live event the firm put on.

After the bill passed and the Treasury Department began offering clarifications of what organizations had to do to get the money and keep it without paying any interest, Vanderbloemen said his group has held additional online sessions that more than 40,000 people have tuned in to.

“We hit a nerve. There was a gap between people wanting to know what this means and people saying actually what it means,” he told McClatchy.

Scott has also had his own full schedule of webinars, virtual town halls and Zoom conferences to speak to pastors and faith leaders about how to access the new loan program and discuss other challenges churches are facing in the current environment.

He said that churches, particularly in black communities, are offering key services during the crisis and need to have the resources to continue to deliver to them.

“African American pastors’ phones were ringing off the hook from their parishioners who were (needing) more meals for their kids,” Scott said, referring to students who could no longer get free lunches they relied on now that schools were closed for the pandemic.

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“People were concerned,” he said. “Can you meet the needs of the community with the government shutting down churches?”

While the entire $2 trillion CARES Act was unprecedented — the largest economic rescue package in history, enacted into law in a matter of days — a special carve-out for churches was also unusual.

But Scott described an increasingly rare set of circumstances on Capitol Hill, where lawmakers from both parties were in general agreement that religious institutions should have the same access as any other small business to the new, 1% interest loans that the government would forgive — turning it into free money — as long as recipients spend most of the money on payroll and don’t fire their employees.

Unlike other provisions in the CARES Act, Scott’s proposal was never a serious sticking point during negotiations. Scott acknowledged, however, that it was initially easier to sell his colleagues on the need to make nonprofits, which are also tax-exempt, eligible for the Paycheck Protection Program.

“There are always questions you have to answer” about why churches should receive federal funding, Scott explained. “I think people understood the importance of having nonprofits (included), but not everyone understood having churches.

“Some people would agree, and some would disagree, but frankly, when you explained to people that churches had the same economic responsibilities as any other entity — that they had the same responsibility, frankly, from a payroll perspective as it relates to paying taxes and all stuff — that was easy to overcome,” he continued.

In an illustration of just how amenable all sides were to allowing churches to participate in the new Paycheck Protection Program, U.S. House Majority Whip Jim Clyburn — a South Carolina Democrat who is often one of Scott’s biggest antagonists — praised the provision on Wednesday.

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During a press conference call with faith leaders hosted by the Center for American Progress, a liberal think tank, Clyburn — who was raised in a parsonage — conceded there was “a little bit of controversy” over allowing churches to tap into government loans as they navigate the pandemic.

“The separation of church and state is important to me,” he explained, “and I do not believe that we violate that policy. Separation of church and state means we don’t do anything by the government to promote religion, but we don’t do anything to prohibit the practice of religion as well.”

Mark Rienzi, the president of Becket, a nonprofit institution that defends religious institutions in court, told McClatchy in a statement that churches have a constitutional right to equal access to the loans.

“This is a national emergency. When the federal government is helping out all kinds of businesses and nonprofits, it is perfectly fine for religious groups to be included on equal terms. In fact, the First Amendment requires it. You couldn’t refuse to give churches police or fire protection or FEMA funds after a disaster either,” Rienzi said.

Glenn Wood, the pastor for administration at Seacoast Church in South Carolina, which has 13 locations and roughly 300 employees spread out across the state, said it couldn’t be understated what participation in the Paycheck Protection Program would mean to his church and others.

“This program is allowing the church to focus on the needs of the congregation and the local community, to look from strictly a financial standpoint making ends meet and meeting payroll and all that,” he said. “It will allow the church to serve the local community.”

Wood, who has participated in “more webinars on this over the last two weeks than any single piece of legislation in 20 years,” is still waiting for his loan to come through.

©2020 McClatchy Washington Bureau

Visit the McClatchy Washington Bureau at www.mcclatchydc.com

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