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July 22, 2020Culture

Down with the PPP!

Shaming churches for taking PPP (Paycheck Protection Program) loans misses the purpose of the CARES Act.
Down with the PPP!
Image: Shutterstock

This past spring, COVID-19 came in like a wrecking ball.

Not only did it cause a health crisis, but also a financial one. Along with the health crisis, where thousands were being infected and hundreds were dying, many feared for their own safety. In an attempt to flatten the curve, the federal government chose to shut down the country for a couple of weeks, and extended it after that.

What happens when an economy shuts down? A financial crisis ensues. That’s exactly what happened. Millions of Americans were either furloughed or laid off.

In April, fear was in the air.

In an effort to stop the deluge of furloughs and layoffs, and to provide some assistance to help weather the financial crisis caused by COVID-19, the federal government stepped in by passing the CARES (Coronavirus, Aid, Relief, Economic, Security) Act. The CARES act included the PPP (Paycheck Protection Program) for small businesses.

Early on in its introduction, the PPP didn’t include churches and other 501c3 organizations. However, through advocates like Senator Marco Rubio (R-FL), the bill came to include such institutions. In a conversation I had with Senator Rubio, he shared:

When you look at the small business sector as the place to start, and then you add to that the independent contractor workers, people who drive for Uber, and the like, the next logical step is this massive sector known as the 501(c)(3) universe of all sorts of organizations and churches as anybody else's. So in a catastrophe like this, where literally no community in the country is unaffected, we wanted to make sure we took care of workers across various sectors.

The PPP wasn’t a never-ending tree of money. Originally there was only $349 billion allocated for small businesses. At the time, many expressed that it was “first come, first serve,” which flooded the system with requests.

However, there were some who voiced that if more money was needed, there would be an extension—which there was, to the tune of $310 billion.

The Moment

Before I go any further, I want us all to pause and think about where we were emotionally and mentally when the crisis of our lifetime hit and began causing other crises.

I’m teaching an open online course through Wheaton called Crisis Leadership from a Christian Perspective, starting in a couple of weeks. In that course, I talk about how when crisis hits, we all tend to go into what the authors of You’re It refer to as “the basement.” People go down into the basement mentally and emotionally when they are afraid.

As a result, there are the three triggers of fight, flight, or freeze.

That’s where many businesses and organizations, including churches and other 501c3 organizations, were when they applied for the PPP.

Down with the PPP?

At the time, the PPP was heartily embraced by many, though not all. And it seems that the CARES Act (including the PPP)—at least for now—did what it was designed to do: avoid catastrostraphic levels of unemployment. (It is still bad out there, but most economists believe it would have been much worse.)

However, if you’ve been following the news lately, you know that there seems to be a firestorm of commentaries regarding churches who (gasp!) actually took up of the SBA’s offer to provide financial reprieve during the coronavirus pandemic.

It seems that larger churches with larger staffs bear the brunt of this public shaming.

I think that’s unhelpful.

People have differing theological views as to churches applying for a “loan,” and especially one from the government. I can also understand how some would want to argue theologically that churches who accepted the “loan” didn’t have enough faith.

While I disagree with both sentiments, I get the point. That’s why I posted articles both pro and con.

The scrutiny I can understand—and agree with—is towards churches that applied for the loan but didn’t need it. The SBA’s PPP guidance stated:

Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.

To be clear, if there were churches that in some way lied or manipulated the truth of their finances in order to secure the loan, then those churches should repent and give the money back.

However, I am not at all in favor of the public shaming of churches—large or small—for taking a portion of the PPP. It’s easy to shame from the hot-dog stands when you are not seated in the hotseat. April was bad. Giving was collapsing in many churches and layoffs were coming. The PPP helped the economy by keeping churches (and others) from panicking.

Let me share a couple of reasons why the PPP was appropriate for some churches, and why no one should shame a church for participating in the program.

First, it was a low-risk loan, primarily focused on not eliminating jobs.

The PPP loan would be forgiven in full if, during the eight-week period beginning when the church received the loan, the money was spent entirely on:

  • Payroll costs
  • Group health care expenses
  • Interest on any mortgage obligations
  • Rent, including rent under a lease agreement
  • Utilities

In addition, if any portion of the loan was not forgiven, the terms of the loan would be two years at a 1 percent interest rate.

Perhaps look at it this way: If someone basically offered you legally-approved assistance to help you weather a time of volatility and uncertainty when you were struggling financially, would you refuse to take it? The answer is no. You know how I know? Because many people shaming churches for taking “free” money also took the stimulus check around the same time the PPP was offered.

But remember, even the name tells the story. It was about jobs— the PAYROLL PROTECTION Act. And churches have payrolls and the government did not want the (probably over 1 million) jobs in the church and non-profit sector to be suddenly laid off.

Second, it provided stability during an unstable time.

Let’s all be honest—we are still in an unstable time. Many of our churches have not yet opened for public worship, and some did and are now closing them again as the coronavirus continues to do untold damage around our country and numbers begin to spike in places that have tried to loosen restrictions.

Leading a church during a time of (at least perceived) peace and stability isn’t easy and now the stresses for leaders are tenfold. To grab ahold of a lifeline while tithes, offerings, and other means of income were collapsing is not poor judgment. It was a judgment call that not everyone would make, but many good, godly leaders did.

Many churches were going to lay off staff. Many pastors faced not receiving a full paycheck. Budgets looked very grim at the beginning of this crisis.

They’ve stabilized in many cases, but the PPP kept many from flooding the unemployment lines.

I actually published articles for and against taking the loans—it’s not an easy choice, but it was a reasonable decision made by pastors and churches in a difficult time.

Third, it calmed the fears of staff who were concerned about losing their jobs.

With millions of people losing their jobs over the past few months, our unemployment was higher than at nearly any point in our country’s history. The role of a good leader in the church or in any other setting is to be C.O.O.L., C.A.L.M, and C.O.L.L.E.C.T.E.D (something I teach in the Crisis Leadership course), which infuses confidence and clarity when you cannot be certain.

Churches who participated in the PPP were in essence saying to their staff, “Let us try to take one more burden off your shoulder during this time of crisis.”

From the perspective of congress and the president, this made sense. An additional million people suddenly locking down their finances in a consumer-driven economy would have substantial ripple effects throughout the entire economy.

In short, by preserving their jobs, many churches were preserving the livelihood of people in a way that would help the economy. Congress and the president decided that was good for the whole country.

But it appears that the shamers who do not have to make payroll or lay off staff know better than congress, the president, and churches across the country. This is harmful thinking.

I think we need to show a little grace by remembering the purpose of the program and giving the benefit of the doubt to those who chose to participate.

If we are honest…

On the surface it may seem like many people just want handouts. And although this may be the case for some, ask nearly any church leader in America today and they will say they’d give anything to not have to worry about finances or the livelihood of their people right now. Ask any small business owner why they took the PPP and it most likely wasn’t because they wanted to sit around and do nothing while they got some money.

Small business owners want to go back to work and contribute to making our world a better place. So did/do our churches.

Let’s be clear: I’m not fan of some of the churches or groups who took PPP money—specifically any who lied or manipulated their numbers to receive a loan. In addition, the PPP did not just apply to those of the Christian faith, but of all (and no) faith.

It was not about religion, it was about unemployment.

Thus, I do not object to churches and 501c3 organizations receiving the loan to help stabilize their finances (and, thus, keep employees) in times of a crisis. And, I know that includes the staff of some faith groups with whom I have major concerns and objections.

But, it was a unique time (and, of course, should not be a regular practice). It was not money to boost my religion (or anyone else’s). It was to prevent a catastrophic economic collapse. And, it appears to have worked.

My hope is that we can get past the public shaming of our churches and instead look at the reason for the program—the economy. Then, perhaps, we can also be thankful for the compassionate care of so many leaders that redirected many staff to press forward on mission to show and share the love of Jesus during this challenging time.

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Down with the PPP!