Paycheck Protection Program funds keep area nonprofits afloat.
As the COVID-19 pandemic forced businesses to close in March, Goodwill of Southwestern Pennsylvania shuttered its retail stores across the Pittsburgh region and furloughed 80% of its 1,200-person workforce.
Most of those employees are back to work, and Goodwill stores are again taking donations, largely because of a $6 million loan the nonprofit secured through the Paycheck Protection Program — a federal initiative aimed at helping small businesses stay afloat during the coronavirus crisis.
Nonprofits like Goodwill were also eligible to apply for PPP funds, which makes $660 billion in loans available as part of a $2 trillion stimulus package known as the Coronavirus Aid, Relief and Economic Security (CARES) Act.
About 2,000 nonprofits in 10 counties in southwestern Pennsylvania — including health and human services agencies, schools, churches, and arts and cultural groups — have already received PPP loans, according to data released last week by the U.S. Small Business Administration.
Nonprofits scrambled to obtain the funds after they had to shut down revenue-producing programs and fundraisers because of the crisis.
A study of nearly 300,000 nonprofits nationwide by the Johnson Center for Philanthropy at Michigan’s Grand Valley State University showed the median amount of cash those organizations had on hand was two months’ worth. The study did not include hospitals and universities.
About 80% of the nonprofits in southwestern Pennsylvania received PPP loans that were less than $150,000.
The rest got loans totaling between $150,000 and $10 million.
Goodwill’s was among the largest and was one of only three awarded to nonprofits in the maximum range of $5 million to $10 million.
Others in that size category went to SAE International, an association for engineers and technical personnel in the aerospace,
automotive and commercial vehicle industries that is located in Marshall, and McGuire Memorial, a New Brighton, Beaver County, organization that provides services for people with physical and mental disabilities.
The SBA did not provide specific loan amounts but instead gave ranges.
David Tobiczyk, vice president of marketing and development for the local Goodwill affiliate, said its loan totaled $6.05 million and “served as a lifeline” for the organization.
Though rules for the PPP stipulate small businesses and nonprofits should have 500 or fewer employees to qualify, exemptions are available such as the “alternative size standard” used by Goodwill.
Under that exemption, an organization can qualify if its net worth doesn’t exceed $15 million and its average net income after taxes is below $5 million.
Goodwill’s loan can be fully forgiven if 60% is used for payroll costs, according to the PPP’s terms.
The loans, which carry a 1% interest rate and are deferred for six months, can also be used for expenses including rent, mortgage interest and insurance.
Mr. Tobiczyk said the loan was used for payroll and other operations.
“Goodwill is grateful,” he said. “Because of this loan, we were able to reopen our stores and donation centers, along with providing services to people facing challenges to finding employment, including an array of services now offered virtually.”
Peggy Morrison Outon, assistant vice president for community engagement and leadership development at Robert Morris University and director of the Bayer Center for Nonprofit Management, said PPP funds “are golden for nonprofits who have always struggled with covering the costs of operations.”
“Retaining staff and paying them is another form of social justice given the low salaries at many nonprofits,” she said.
Many nonprofits, she said, “have been front and center in COVID response, feeding and taking care of so many vulnerable people.”
Not all the nonprofits that received PPP funding have been engaged in front-line work during the pandemic but are using the money to retain employees.
The Pittsburgh Cultural Trust got a loan of between $2 million and $5 million, and The Frick Pittsburgh received $692,900.
The trust, which manages performance and gallery spaces Downtown including the Benedum Center for the Performing Arts and the O’Reilly Theater, did not disclose its loan amount.
Kevin McMahon, president and chief executive, said the trust received the money May 1 and expects to use the full amount for payroll.
When its theaters and other venues were closed in mid-March, the trust laid off 222 part-time employees who worked events, Mr. McMahon said. None have returned to work yet.
The trust had 354 employees on its payroll in mid-February, and some have continued to work during the shutdown, said Mr. McMahon.
“The PPP loan came to us at a critical time,” he said. “Programs like this one, as well as support from our members, donors, and sponsors, have allowed us to keep non-event-related staff members working through the pandemic. We are still relying on financial support from new memberships, as well.”
The Frick Pittsburgh, a museum and cultural venue in Point Breeze, used its loan for payroll and utilities, said spokesman Greg Langel.
It furloughed 17 of its 185 employees during the pandemic, and none of those furloughed have been recalled, Mr. Langel said.
The Frick’s grounds are scheduled to reopen Tuesday, and its museum and other buildings are scheduled to reopen Aug. 15.
Carnegie Library of Pittsburgh, which includes the main library in Oakland and 18 branches in the city, received a PPP loan totaling just over $4 million.
All of its 497 full-time and part-time workers remained employed during the pandemic, and its loan is being used for payroll and benefits, said communications manager Suzanne Thinnes.
The libraries were closed until curbside pickup and drop-off services began at several locations last month.
“Since March, many staff members have been working remotely, providing virtual programming, digital content, reference assistance, and [one-on-one] appointments with job and social service inquiries,” Ms. Thinnes said.
As the libraries roll out more services and deal with a backlog of materials, “The number of staff working in the locations is steadily increasing,” she said.
Many nonprofits that got PPP funding, especially small ones, will need other resources to make it through the pandemic and beyond, said Ms. Outon.
“I suspect that PPP funds have kept the doors open for some and that when they disappear, we may see some valuable nonprofits having to close their doors — for which we will all be the poorer,” she said.
The Consumer Health Coalition, a North Side agency that helps marginalized individuals obtain affordable health insurance, got a PPP loan of $48,500 but will still rely on grants going forward, said Sally Jo Snyder, executive director.
It has used most of its loan to keep its three full-time and four part-time staff members working, she said.
Some of the loan has helped pay rent and utilities.
“Our mission is to be with, journey beside and assist persons too often easily labeled and left behind, so we continued assisting persons to get health insurance ... and stayed in connection with the persons we serve,” Ms. Snyder said.
Josh Whiteside, executive director of The Education Partnership, a Sheraden agency that provides supplies for under-resourced schools in the region, is optimistic his agency will get through the current crisis.
But he worries about nonprofits taking a significant hit this year and next because philanthropic donations may decline.
The partnership received a PPP loan of $121,900 and used all of it to keep eight full-time and five part-time employees on the job.
When schools closed and stay-at-home orders were issued in March, “We still had bodies in the building, deploying tens of thousands of hand sanitizers, Clorox wipes, Lysol spray and toilet paper,” he said.
The partnership distributed the supplies to first responders and others in need.
“We had those things in our warehouse, and it was not doing any good there waiting for school to start back up,” Mr. Whiteside said.
The partnership recently passed a budget of about $1 million for the next year, but if fundraising projects don’t hit the mark, Mr. Whiteside said, “come October, my tone might be a little less optimistic.”
About $130 billion in PPP funds is yet to be allocated. Organizations may apply through Aug. 8.