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April 14, 2020Culture

Here’s Why You Shouldn’t Take the CARES Act: The Church and the Payroll Protection Program

The decision to apply for and receive PPP funds is one of the most important issues the church will face in this decade.
Here’s Why You Shouldn’t Take the CARES Act: The Church and the Payroll Protection Program
Image: Photos by Sharon McCutcheon, Justin Luebke, Zac Nielson on Unsplash

Over the past month, the BGC has worked to equip believers with the resources they need to face the pandemic crisis wisely and remain on mission for the gospel. Even as we have focused on covering a wide range of topics to walk churches through this season, many of the most urgent questions we receive from pastors and leaders relate to the financial side of this crisis. This is understandable; this is an unprecedented crisis and its impact on organizations is just beginning to be felt. Even as the government has stepped in with help through passing the CARES Act, there remains significant ambiguity on how this applies to churches.

In response, the BGC has worked to help alleviate these concerns through a variety of resources such as Joshua Laxton’s article “The CARES Act and Your Church Staff.” Yet often ambiguity and complexity provoke multiple opinions. In this spirit, we want to present two different viewpoints by leaders on how churches should approach the CARES Act.

As our society is fueled by polarization and politicization, it’s important to realize we are not pitting these viewpoints against each other, but modelling constructive discussion. In times of crisis, dialogue and disagreement can often be powerful tools for refinement and clarity. Moreover, every church and organization is unique, and leaders need to make the right decision for their people.

In this spirit, the following article by Valparaiso, Indiana former mayor Jon Costas argues churches should not apply for the CARES Act. Jon is a pastor at Calvary Church (Valparaiso) and offers important questions leaders should consider as they think through this season. If you want to read a contrary opinion, Florida Senator Marco Rubio outlined why he believes churches should apply for the CARES Act. You can read that article here:

My rich uncle will probably be your church’s largest donor this year. You probably won’t see him sitting next to you in the pew or serving in the nursery, but your church leaders are very aware of his presence. Now before you assume I come from an unusually affluent family, let me clarify. I’m referring to our rich uncle, Uncle Sam.

On March 27, 2020, Congress passed the Cares Act, a massive $2.2 trillion recovery plan to address the economic fallout caused by the coronavirus pandemic. The Payroll Protection Program is part of the Act and is designed to help small businesses survive and recover. $350 billion has been allocated to the PPP so far, and more may be allocated based upon the enormous response to the program.

Essentially, businesses and organizations that employ less that 500 people can request an amount equal to 2.5 times their average monthly payroll, including benefit costs. However, these funds will be forgiven if they are spent on payroll, rent, interest, or utilities during the eight-week period following receipt of the funds. This level of federal assistance to the private sector is unprecedented and has led to an avalanche of applications that are being processed by local banks.

What is even more surprising to some is that this program has been extended to non-profit organizations, including churches.

Using some very raw calculations, a church that qualifies will probably receive a forgivable loan that is equal to about 10 percent of its entire yearly budget. If your annual church budget is $500K, the amount is about $50K. If your budget is $2M, Uncle Sam’s gift would be approximately $200,000.

These are hefty numbers and this explains why many, if not most, churches are scrambling to apply as soon as possible. In fact, one larger church consulting firm recently released a video that urges all churches to apply immediately for the “free money” that Congress will be doling out. We tend to accommodate our largest donors, and who can compete with Uncle Sam?

My purpose in this article is to caution church leaders to approach this issue carefully, thoughtfully, and prayerfully. While it seems like a no-brainer to go after “free money”—and lots of it—churches must consider their unique mission and countercultural leader.

What may be an easy call for a small business could be the wrong decision for a church. Churches are not businesses and should approach this matter from a much different perspective. I have a sense that for the church, accepting PPP funds is a much bigger and more controversial issue than most church leaders now sense.

In her book, Pursuing God’s Will Together, Ruth Hayley Barton urges church leaders to distinguish between secular decision-making models and spiritual discernment. She writes,

“Spiritual discernment is the ability to distinguish or discriminate between good (that which is of God and draws us closer to God) and evil (that which is not of God and draws us away from God). There are many qualities that contribute to good leadership, but it is our commitment to discerning and doing the will of God through the help of the Holy Spirit that distinguishes spiritual leadership from other kinds of leadership. Corporate or leadership discernment, then, is the capacity to recognize and respond to the presence and activity of God as a leadership group relative to the issues we are facing, and to make decisions in response to that Presence.”

This posture to decision making in the church flows from the core belief that Christ is the head of the church (Eph. 5:23) and will lead his church in real time. In other words, he is not merely our idealized leader, but one who provides constant counsel and direction.

When church leadership groups gather to make decisions, Scripture tells them to expect God to really provide wisdom and direction required: “I will instruct you and teach you in the way you should go” (Ps. 32:8). A church leadership group’s decision to seek PPP funds is best made from this attitude of dependence and discernment rather than from a sterile financial perspective. Caution is warranted.

These five questions may be helpful to church leaders as they seek to decide the PPP issue in a posture of godly discernment:

1. What Scriptural principles should inform our discussion?

2. Is our church truly experiencing financial hardship to the same degree of small business?

3. Will accepting a large governmental subsidy rob our members of an opportunity to give sacrificially and experience the Lord’s provision?

4. Is the decision to accept the PPP grant a decision made in faith or fear?

5. What message will accepting PPP funds send to an unbelieving world?

Moreover, church leaders must also consider the impact on the greater church community as well as our nation as a whole.

A large and prosperous church that takes a subsidy of $300,000 because their giving is down 15 percent may be making it more difficult for smaller inner city churches whose finances are devastated and need the funds just to survive. It could also jeopardize the fates of many small businesses too. I have done some very rough calculations and its quite possible that if most churches take advantage of PPP loans, it could easily capture one third of the entire $350 billion allocation.

There are socio-economic and social justice issues here that must be considered by suburban churches who may drain grant money away from those who need it more.

I believe the decision to apply for and receive PPP funds is one of the most important issues the church will face in this decade. It will set a precedent for the future and may, in time, hinder the mission of the church when the strings attached to government funds are not consistent with Scripture. It will impact how the unchurched view us, and how our own members respond to our spiritual leadership.

There are more nuances to the PPP decision than might appear on the surface. Therefore, it is incumbent on every church leadership team to take this matter seriously and make a decision that is consistent with their application of Scripture and prayerful discernment of God’s direction.

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