Catholic Church says its payroll loans are keeping thousands employed to serve millions in need
St. Andrew’s Church in Roanoke, Virginia. Creative Commons photo.
An analysis from the Associated Press is sparking controversy after it reported that “the U.S. Roman Catholic Church” used the Paycheck Protection Program to “amass at least $1.4 billion in taxpayer-backed coronavirus aid.” The amount could be as high as $3.5 billion.
Are U.S. taxpayer dollars being used to line the pockets of the pope through coronavirus aid?
The truth is more complicated.
There is no legal entity called “the U.S. Roman Catholic Church,” and no central point of direction for Catholic charities or administrations.
The network of Catholic charities and institutions that operate somewhat autonomously under the umbrella of the Catholic Church are using the funds to keep more than 400,000 people employed in about 9,000 Catholic entities, according to the Diocesan Fiscal Management Conference, the AP reported.
“The Paycheck Protection Program was designed to protect the jobs of Americans from all walks of life, regardless of whether they work for for-profit or non-profit employers, faith-based or secular,” Archbishop Paul S. Coakley of Oklahoma City said in a statement. “The Catholic Church is the largest non-governmental supplier of social services in the United States. Each year, our parishes, schools and ministries serve millions of people in need, regardless of race, ethnicity or religion.”
What is the Paycheck Protection Program?
The Paycheck Protection Program (PPP) is a government loan designed to encourage small businesses with less than 500 employees to keep their workers on the payroll rather than furlough or lay them off during the coronavirus pandemic, according to the U.S. Small Business Administration (SBA).
The SBA said they will forgive PPP loans “if all employee retention criteria are met, and the funds are used for eligible expenses.” Faith-based organizations qualify for SBA loans regardless of whether they provide secular social services.
“Affiliated” faith groups -- separate entities that operate together -- could not apply for individual loans if the total employee count across all affiliated entities exceeded 500. However, an exemption was made for religious groups if the connection between organizations is based on a religious teaching or belief.
“For example, if your faith-based organization affiliates with another organization because of your organization’s religious beliefs about church authority or internal constitution, or because the legal, financial, or other structural relationships between your organization and other organizations reflect an expression of such beliefs, your organization would qualify for the exemption,” the SBA said.
This exemption applies directly to Catholic diocese, schools, charities, and all other institutions, which, though all within the Church hierarchy and united in episcopal jurisdiction, operate largely autonomously and share few mutual employees.
What did the Church do with the money from PPP loans?
PPP loans were not handed over in a lump sum to the governing bodies of the nationwide church, and neither were large portions of the money received “amassed” as wealth in church accounts.
According to the AP report, “the church and all its organizations reported retaining at least 407,900 jobs with the money they were awarded.”
Those jobs are spread nationwide across separate diocesean staff, Catholic school employees, clergy, charity workers and more.
“The novel coronavirus only intensified the needs of the people we serve and the demand for our ministries,” said Coakley, the chairman of the U.S. Conference of Catholic Bishops’ (USCCB) Committee on Domestic Justice and Human Development. “The loans we applied for enabled our essential ministries to continue to function in a time of national emergency.”
For example, the Diocese of Raleigh received $12 million in PPP loans for its central offices and smaller parishes and schools, and the diocese also assisted several parishes and schools that applied directly to receive the loans through their local banks, according to a Catholic News Service article posted to the official Diocese of Raleigh website. The loans helped keep “nearly 3,000 diocesan, parish and school staff employed during a period of significantly declining revenues,” the diocese said.
Even with federal loans, the Church is facing financial hardship
American dioceses say the coronavirus pandemic is compounding their already-dire finances. Some church offices have been reaching deep into their pockets to pay expensive sexual abuse settlements, and many Catholic schools are seeing falling revenue and donations to support scholarships. The coronavirus has only worsened the trend, with many families struggling to pay or uneasy about sending their kids to school in the fall.
“Despite all of [the PPP loans], more than 100 Catholic schools have announced that they plan to close, with hundreds more facing an uncertain future,” Archbishop Coakley said in his statement. “Businesses, hospitals, schools, and churches all across the country are facing many of the exact same problems.”
The Archdiocese of New York, one of the most prestigious and politically important dioceses in the U.S., has suffered major financial hardships despite receiving over 15 loans worth at least $28 million just for its top executive offices and at least $1 million for St. Patrick’s Cathedral.
“The coronavirus public health crisis has had a devastating financial impact on Catholic school families and the greater Archdiocese,” the Archdiocese of New York said in a recent statement. “Mass unemployment and continuing health concerns have resulted in families’ inability to pay their current tuition, and a significantly low rate of re-registration for the fall; while months of cancelled public masses and fundraising for scholarships have seen a loss of parish contributions which traditionally help support the schools.”
A total of 20 New York-based Catholic schools will be closing due to the economic downturn, with three additional schools merging into one.
What are people saying?
In the days following the AP’s report, activists and political commentators expressed mixed opinions on the Church receiving federal funding though PPP loans.
“My small business owner friends are struggling but...the Catholic Church won $1.4 billion in coronavirus aid. BILLION,” activist Alyssa Milano wrote on Twitter.
In response to criticism, Archbishop Coakley pointed to the vast swaths of Americans who are directly employed by branches and institutions within the nationwide network of Catholic churches.
“These loans have been an essential lifeline to keep hundreds of thousands of employees on payroll, ensure families maintain their health insurance, and enable lay workers to continue serving their brothers and sisters during this crisis,” the archbishop said in his statement.
Democratic Rep. Jackie Speier of California wrote, “No entity that is struggling financially largely due to settling myriad sexual abuse cases should be bailed out with PPP. This is especially true for one that doesn't pay taxes!!”
The Freedom from Religion Foundation (FFR), a non-profit dedicated to the constitutional principle of the separation of church and state, blasted the Trump administration for including religious institutions in the PPP.
In a news release, FFR said the group “condemns the unconstitutional, possibly corrupt handout of taxpayer funds to churches, including churches run by some of President Trump’s closest allies, under the Paycheck Protection Program.”
FFR specifically pointed out the inclusion of the Diocese of Pittsburgh on its list, a diocese that is estimated to have received between $2 million and $5 million in PPP loans.
“That diocese was infamously featured in the Pennsylvania grand jury report on abuse and rape of minors involving 90-plus priests, some of whom marked victims with gold cross necklaces so other priests could more easily spot them. The church received its taxpayer infusion 20 months (to the day) after the grand jury report was finalized.”
Republican Sen. Marco Rubio of Florida said on Twitter, “I openly, specifically & proudly supported allowing Catholic Church’s & any other church,synagogue or mosque to receive the same [PPP] funds the [Tampa Bay Times] received to keep their workers employed. And in the next relief bill I will insist we do so again.”
Timothy Nerozzi is a writer and editor from northeastern Pennsylvania. He covers religious issues with a focus on the Catholic Church and Japanese society and culture.