CBS News reported earlier this year that according to an Associated Press analysis of Small Business Administration data released in July, the U.S. Roman Catholic Church amassed $1.4 billion to $3.5 billion in federal COVID-19 aid.
- Houses of worship and faith-based organizations that promote worship normally aren’t eligible to receive funds from the Small Business Administration.
- However, as the economy struggled through COVID-19 related downturns, Congress allowed faith groups and other nonprofits to apply for the Paycheck Protection Program, the $659 billion fund established primarily for small businesses to receive money for keeping their workers employed.
- The Press found that as of July, Catholic dioceses, parishes, schools and other ministries had received approval for at least 3,500 forgivable loans.
- The Press’s $1.4 billion to $3.5 billion is an undercount, because the Diocesan Fiscal Management Conference, an organization of Catholic financial officers, surveyed members and reported that about 9,000 Catholic entities received loans, approximately 5,500 more than the Press was able to identify.
- In order to qualify for so many loans, the Catholic Church had to receive an exception to the “affiliation rule,” which states that only businesses with fewer than 500 employees are eligible for the Paycheck Protection Program.
- According to the Catholic News Network, the bishops’ conference and several major Catholic nonprofit agencies worked throughout the week of March 30 to try to confirm that the “unique nature of the entities would not make them ineligible for the program.”
- The Los Angeles Archdiocese spent $20,000 to lobby the House and Senate, and Catholic Charities USA included the CARES act as one of the issues that would be lobbied through a $30,000 expenditure
- Hundreds of Catholic leaders joined a call to President Donald Trump, who allegedly underscored his upcoming election and called himself the “best [president] the Catholic church has ever seen.”
CBS reports that
In program materials, [Small Business Administration] officials said they provided the affiliation waiver to religious groups in deference to their unique organizational structure, and because the public health response to slow the coronavirus’ spread disrupted churches just as it did businesses.
For example, Catholic Charities said in a statement,
Each organization is a separate legal entity under the auspices of the bishop in the diocese in which the agency is located. [Catholic Charities] supports agencies that choose to become members, but does not have any role in their daily operations or governance.
- CBS reported that “There is no doubt that state shelter-in-place orders disrupted houses of worship and businesses alike.”
- With masses cancelled, even during Holy Week and Easter, parishes lost expected revenue and had to make layoffs in some dioceses.
- In a written statement, bishop’s conference spokesperson Chieko Noguchi said, “These loans are an essential lifeline to help faith-based organizations to stay afloat and continue serving those in need during this crisis.”
- In its data analysis, the Press found that the Catholic Church and all its organizations report retaining 407,900 jobs with the Paycheck Protection money awarded.
- Noguchi also acknowledged its officials lobbied for the paycheck program, but she said the organization wasn’t tracking what dioceses and Catholic agencies received and that the conference felt strongly that “the administration write and implement this emergency relief fairly for all applicants.”
- Nevertheless, not all Catholic institutions sought Paycheck Protection money. Deacon Steve Wisnowski, a financial officer for the Ukrainian Catholic Eparchy based in Stamford, Connecticut, told the Press that although they experienced a downturn in donations, rainy day savings and parishioners’ generous response allowed the eparchy to stay afloat without government assistance.
- Wisnowski said the Ukrainian Catholic Eparchy’s parishes did not experience a “serious financial crisis,” and his superiors understood Paycheck Protection as being for “organizations and businesses truly in need of assistance.”
Some raised questions as to whether all the U.S. Catholic Church entities receiving Paycheck Protection money truly warrant these loans. CBS posited that some financial straits have been “self-inflicted” rather than being the product of the COVID-19 pandemic.
- CBS explained, “Long before the pandemic, scores of dioceses faced increasing financial pressure because of a dramatic rise in recent clergy sex abuse claims” and “The scandals that erupted in 2018 reverberated throughout the world.”
- Abuse reports tripled in the year ending in June 2019, and dioceses and religious orders spent $282 million that year on settlements and legal fees, more than twice the $106 million reported five years earlier.
- The Press discovered “40 dioceses that have spent hundreds of millions of dollars in the past few years paying victims through compensation funds or bankruptcy proceedings” that received Paycheck Protection funding.
- Four dioceses sued the federal government to receive loans in spite of entering bankruptcy due to “mounting clergy sex-abuse claims,” CBS reported. Small Business Administration rules prohibit granting loans to bankrupt applicants.
- However, even if a diocese is bankrupt, its affiliates, such as parishes and schools, remain eligible for loans.
Bishop Lawrence Persico of Erie, Pennsylvania acknowledged why some were troubled by the Paycheck Protection loans granted to Catholic Church entities. However, he pushed back on the idea that dioceses ought to be excluded from the COVID-19 aid package. He said that within his diocese, most aid money went to parishes and schools.
I know some people may react with surprise that government funding helped support faith-based schools, parishes and dioceses… [but] The separation of church and state does not mean that those motivated by their faith have no place in the public square.
Image credit: Screengrab / United States Conference of Catholic Bishops / YouTube