What Churches and Non-profits Need to Know About the Paycheck Protection Program

On Saturday, President Trump tweeted, “The Paycheck Protection Program is up and running! The program is open to nonprofits as well, so banks be sure to sign up our Great Religious and Veteran Organizations that need help!”

Perhaps you work at one of those “Great Religious” organizations, or you know someone who does. If you’re at a church or non-profit and wondering whether you’re eligible for the program, what’s entailed, or how the program actually works, keep reading. If you’re not, consider forwarding this to a church leader or someone who may appreciate the extra help.

First things first: What is the Paycheck Protection Program?

The Paycheck Protection Program is one of two new types of loans available to small businesses through the recently signed CARES Act (the Congressional economic relief package which you can read about here). Churches must have fewer than 500 employees to qualify as a “small business.” The Paycheck Protection Program is a loan – up to $10 million – aimed at retaining small business employees. As such, the portion of it used toward payroll (and certain other expenses) will be completely forgivable provided that at least 75 percent of the loan goes toward payroll costs. Otherwise, the loan has a fixed one percent interest rate and maturity of two years.

Is my church eligible?

Yes. A recent Congressional news release clarified: “All churches are eligible for the forgivable loans available under the Paycheck Protection Program.”

Do churches and religious non-profits have to do anything extra to qualify?

No. The government has clarified that churches will be subject to the same limitations on the loans as other entities, but not to any additional or unique burdens.  As the release stated, “No church should have to file a Form 990” and non-profits do not need a tax exemption “determination letter” from the IRS.

If I participate, will the government restrict my religious activities or speech?

A loan will not limit an organization’s First Amendment religious rights. It is true that churches receiving the funds must abide by federal nondiscrimination standards (which include race, color, religion, sex, handicap, age, and national origin), but the Small Business Administration has clarified that “these nondiscrimination requirements do not limit a faith-based entity’s autonomy with respect to membership or employment decisions connected to its religious exercise.”

For greater detail and additional answers (for example, technical information about what qualifies as a “small business”), please check out the Small Business Administration’s FAQs or full guidance.

For churches, we recommend COVID Church Aid, a website filled with COVID-19 resources for church leaders, including resources on the Paycheck Protection Program.

How does this affect ministries like Family Policy Alliance?

While churches and many non-profits are eligible to utilize the new funding, organizations and ministries like Family Policy Alliance that engage in election and legislative work are not. As a result, we are more thankful than ever for the faithful, sacrificial giving of our ministry partners.  Regardless of your ability to give financially to Family Policy Alliance at this time, we are deeply grateful for your gift of prayer for our ministry.  And please know, the Family Policy Alliance team is steadfast in praying for you.

Reflecting on this Holy Week, President Donald Trump observed, “We may be apart, but we can use this time to turn to reflection and prayer and our own personal relationship with God. I would ask that all Americans pray for the heroic doctors and nurses, for the truck drivers and grocery store workers, and for everyone fighting this battle. … Most of all, I would like to ask for your prayers for the families who have lost loved ones. Ask God to comfort them in their hour of grief, a great hour of grief for our nation, for the world. … With the faith of our families, and the spirit of our people, and the Grace of our God, we will endure, we will overcome, we will prevail. We have learned so much. We will be stronger than ever.”

We couldn’t agree more.

Sincerely,

Meridian Baldacci
Policy and Communications Strategist