The recently passed CARES Act in response to the coronavirus pandemic has a multitude of provisions and opportunities for congregations to both share information as well as potentially benefit from this legislation. On Thursday April 2nd the Conference of Bishops had a zoom call with our ELCA attorneys who helped clarify some of the issues. We are grateful for our churchwide staff’s work on this and the continuously updated resources in this ELCA summary document
I would encourage all our congregations leaders (particularly pastors and church treasurers) to explore the options within this act particularly to assist in keeping benefits and salary for staff. A good article from the NYTimes helps with some of the larger picture questions.
Two notable provisions are that under the CARES Act, those normally not eligible for unemployment benefits such as church employees can, if laid off, collect benefits. Secondly, the Paycheck Protection Program (PPP) provisions allow small businesses, which include churches and other non-profits to apply for loans which can convert to grants. At this link you can see a sample of the application (which will vary by bank).
A few FAQs (this is built off a document that is much more detailed from ELCA legal counsel) are…
- Are churches eligible for the PPP? Yes.
- When do we apply for PPP? Enrollment opens April 3 (although not all banks are ready today to do this). No closing date has been set firmly, but sooner is better.
- Who is the “owner” of the congregation? For this purpose the space on the application listing who has ownership of 20% or more of the entity does not apply and should be left blank. The DO NOT SAY THE ELCA OR NT-NL. If congregations put down the ELCA, it will put the ELCA over 500 employees and no one will receive relief.
- How do we answer question 3 (common management or ownership)? NO The answer is NO. Although we are #InMissionTogether as synod and church each congregation owns its property independently.
- Who should sign then? The elected Church Council President and Treasurer should sign. The Pastor or other staff SHOULD NOT SIGN.
- Will we need an audit to get loan/grant forgivness? Good financial practices of documenting payments through payroll records, canceled checks, etc., should be practiced. (75% on payroll at minimum) but it is unlikely the SBA will be able to audit everyone.
- Is a congregational meeting required to approve borrowing money? Depends. Options are available. 1) A remote meeting; instructions can be found HERE. To expedite timing the congregations leaders (with approval of executive team) can start the application process and ratify later, when you can hold a remote meeting. 2) Treat it as a grant application (congregation must then comply with the rules for forgiveness) so a meeting is not necessary however this should be clearly communicated to the membership.
In all of this pastors and lay leaders must be in constant and continual conversation about the direction of the congregation or school in this time as well as ensure provisions are made to comply with any agreements the congregation/school enters into. As this is a continually changing situation, please keep updated.