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Canceling worship services negatively affects churches’ bottom lines because a decrease in attendance historically translates into a decrease in donations to churches that members and attendees normally make in the form of tithes and offerings.  


The financial strain that American businesses are experiencing as a result of the COVID-19 pandemic is also being felt by churches across the country, including in the St. Louis metropolitan area. 

Like other American businesses, churches have, in some cases reluctantly, implemented social distancing practices as a way to guard against the continued spread of the virus. That has meant ceasing all worship services and other church activities that normally include gatherings of people in physical church buildings. Not surprisingly, canceling worship services negatively affects churches’ bottom lines because a decrease in attendance historically translates into a decrease in donations to churches that members and attendees normally make in the form of tithes and offerings.  

Also, like other businesses, churches and faith-based organizations depend on employees to function and carry out the mission of the organization. A substantial decrease in a church’s income may mean layoffs, furloughs, and reductions in salary for church employees. Churches often are a significant source of income for Americans and an important contributor to the economy, as they employ ministers, musicians, information technology and audiovisual personnel, administrative and clerical staff, custodial and maintenance workers, and grounds keepers. Like employees of other small business, these individuals are losing jobs, income, benefits, and the feeling of security that a steady income can provide, all due to the sudden halt in economic activity brought about by the pandemic. 

That is why churches should be rushing to try and take advantage of any measure that the federal government has implemented to provide emergency financial assistance to entities that employ people and that are adversely affected by the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act may be one such measure.  

The CARES ACT, which became law on March 27 and is considered the largest relief bill in United States history, seeks to confront many of the hardships faced by individuals and businesses adversely affected by the pandemic. From financial aid to large and small businesses to direct payments to individuals, this unprecedented new law is aimed at stabilizing the American economy, which has taken a devastating hit as a result of the sudden halt of economic activity owing to the social distancing practices put in place in response to the spread of the virus. 

An important component of the CARES Act is the Paycheck Protection Program (“the PPP”).  The PPP provides federally guaranteed loans to eligible businesses, which can be partially forgivable, to encourage businesses to retain employees through the COVID-19 crisis by assisting in the payment of certain operational costs. The program is aimed at small businesses.  The vast majority of churches in the St. Louis area likely would qualify for the program because they fit into the act’s definition of “small business concern” and employ far less than 500 employees.  

To be eligible for a Paycheck Protection loan, an applying entity must certify that the loan is needed to support ongoing operations during the COVID-19 emergency, that funds will be used to retain workers and maintain payroll or make mortgage, lease, and utility payments, and that the applicant does not have any other application pending under this program for the same purpose. 

The proceeds of a Payroll Protection loan may only be used to pay for certain costs, such as payroll, group health care benefits and insurance premiums, mortgage interest payments, rent and utilities, and interest on prior debt obligations. Portions of the loan are forgivable if all employees are retained between February 15, 2020 and June 30, 2020, and assuming other conditions are met. The interest rate on a PPP loan cannot exceed 1%, and interest payments are completely deferred for one year. 

Understandably, faith-based organizations might question whether they are eligible to participate in the PPP on one hand, and might question whether it is wise to accept financial assistance from the federal government on the other hand.  

The PPP is administered by the Small Business Administration (SBA), which recently published Frequently Asked Questions (FAQ) regarding participation of faith-based organizations in the program. The SBA clarified explicitly that churches are eligible to receive PPP loans without regard to whether the churches provide secular social services. The SBA further made clear that PPP loans can be used to pay the salaries of ministers and other employees engaged in the religious mission of the church. 

Regarding the potential for unwanted government interference in the independence of the religious organization, the SBA states: “Simply put, a faith-based organization that receives a loan will retain its independence, autonomy, right of expression, religious character, and authority over its governance, and no faith-based organization will be excluded from receiving funding because leadership with, membership in, or employment by that organization is limited to persons who share its religious faith and practice.” 

Biblical tradition teaches that during the Israelites’ 40-year period in the wilderness following the Exodus, God miraculously supplied them with manna, which was an edible substance meant to sustain them during their travels. The financial assistance being offered through the PPP may not be manna, but churches should seriously consider whether it may be a worthwhile measure to help sustain them and those employees who rely on them for income during the economic wilderness that has only just begun.

Reginald L. Harris is a partner in the Bryan Cave Leighton Paisner’s St. Louis office. His practice focuses on white collar criminal matters, internal investigations, corporate compliance, and civil trial and appellate litigation.

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