Hundreds of religious groups, churches in TN approved for PPP loans
Belmont United Methodist Church applied for a loan through the federal Paycheck Protection Program.
The main goal was to ensure the Nashville church could continue to pay its early childhood education teachers even as the novel coronavirus pandemic upended nearly every facet of life, the Rev. Paul Purdue said.
“It’s helping us keep people employed,” Purdue said.
Belmont United Methodist Church is not alone. In Tennessee, hundreds of churches, religious schools and other faith-based organizations have been approved for millions of dollars in potentially forgivable PPP loans, according to data recently released by the U.S. Department of Treasury.
The PPP, part of the CARES Act, exists to help employers nationwide make payroll during the ongoing global health crisis and religious institutions are among those eligible for the program.
Religious entities account for only a sliver of the companies and other organizations in Tennessee granted these loans, which are guaranteed by the Small Business Administration. Across the state, more than 98,000 companies and other organizations have been approved for $8.9 billion in PPP loans.
Last week, the U.S. Department of Treasury revealed more details about the companies and organizations the federal funds were supporting. It released the names of the employers in the U.S. who were approved for PPP loans between $150,000 and $10 million; those who received less than $150,000 were not identified by name. The new data does not provide exact loan amounts, but it does break the loan amounts into tiers.
PPP loan a stop gap measure for financial challenges
Businesses such as law firms, hotel operators and restaurants received the vast majority of the loans in Tennessee. Nonprofits, including religious entities, accounted for about 4% of the loans approved. A few dozen of the faith-based groups approved for loans were not listed as nonprofits. Among those named, The Tennessean identified more than 350 houses of worship and other faith-based entities granted loans. Neither the PPP loan applicants’ religious affiliations nor missions were listed in the data, making a full accounting difficult. Belmont United Methodist Church falls under the $150,000 to $350,000 tier, the data shows.
Belmont intends to use the entire $326,000 loan on payroll and meet the terms for forgiveness, Purdue said. To qualify for forgiveness, loan recipients must use the funds by the end of the year and spend at least 60% on payroll costs.
The PPP loan is a stop gap measure for the church, Purdue said. Belmont suspended its weekday school for more than a month due to the COVID-19 outbreak in the state and reopened with lower enrollment due to the pandemic, he said. The PPP loan has helped the church continue to pay staff and provide childcare even with a large decrease in tuition payments, he said.
“We understand the mission of the church to feed, to clothe, to care for people. We don’t want to lay people off or furlough people because we would like to keep them employed,” Purdue said. “The PPP has surely helped us do that and so we’re thankful for that.”
Critics say PPP is an unprecedented bailout for houses of worship
While PPP loan recipients appreciate the program, it has drawn criticism because of the application process, as well as who received approval. Some critics take issue with religious groups being eligible for the loans.
American Atheists, which describes itself as a religious equality watchdog organization, recently criticized the program for bailing out houses of worship. The organization also is concerned with the transparency of the PPP.
“Due to the Trump Administration’s unwillingness to provide full disclosure, we have had to work with limited data. Yet the picture is clear: this is an unprecedented giveaway to religious organizations,” Alison Gill, the vice president of legal and policy at American Atheists, said in a recent news release.
American Atheists was approved for a PPP loan between $150,000 and $350,000, according to the recently released data.
“Americans have a right to know exactly how much of their tax dollars are unconstitutionally propping up churches, and the Trump Administration cannot be allowed to leave Americans in the dark,” Gill said.
The PPP is helping the Roman Catholic Diocese of Knoxville keep people employed in its parishes, schools and social services programs, said Jim Wogan, spokesman for the East Tennessee diocese. In turn, the employees are able to continue to minister to the community through counseling services, mobile medical clinics and more, he said.
“If they’re critical of that, I think it’s a very misguided criticism,” Wogan said.
PPP helping churches meet payroll as financial giving drops
Even with a 15% to 20% drop in financial giving, the diocese has been able to avoid layoffs because of the $7.2 million PPP loan it has received, Wogan said.
“These loans helped save jobs and keep our ministries going,” he said.
Like other sectors of society, houses of worship opted to close their doors to the public for weeks to slow the spread of the coronavirus. Some have experienced drops in donations from members as worship services moved online and unemployment claims grew statewide.
The Knoxville diocese’s allotment of the federal loan dollars is protecting paychecks across the diocese, not just at the chancery, Wogan said. Part of it is earmarked for specific Catholic entities, including Knoxville Catholic High School and the cathedral, Wogan said.
The diocese intends to use 80% to 90% of the loan on payroll and the rest on utilities and other parish costs, Wogan said. Officials also plan to meet the terms for loan forgiveness, he said.
In Hendersonville, Long Hollow Baptist Church anticipates using all of its $1 million to $2 million in loan money to pay its staff, Collin Wood, the church’s operations pastor, said. The church has about 190 full-time-equivalent positions, he said. With the help of the PPP, Long Hollow has avoided layoffs even as it faces a roughly 20% drop in revenue, Wood said.
“We’re able to use that to keep people employed and do the ministry that God’s called us to do,” Wood said.
Long Hollow was given 24 weeks to use the federal funds and will address loan forgiveness at the end of that time period, Wood said.
Leaders of the Southern Baptist church considered not applying for PPP money. They were concerned about whether they would be able to maintain their religious freedom if they accepted federal money. “There’s a history of Baptists being wary of the government,” Wood said. “We believe in the separation of church and state and even one of our statements of faith talks about that the government should not use taxes to establish a religion.”
Ministry leaders took a close look at the program, including the guidance from the Small Business Administration, before deciding to apply for the loan.
“Because they were so explicit in saying all of the religious liberty freedoms that are given in the Constitution and other laws are not affected by this, I think that gave us some comfort that, that those things would not be trampled on,” Wood said.
Reach Holly Meyer at hmeyer@tennessean.com or 615-259-8241 and on Twitter @Hollyameyer.