By David Goehring from San Francisco, CA, USA – Bingo Sign, CC BY 2.0,
Originally published on Forbes.com
Much as I admire religious institutions, I get depressed by the extent to which they collectively behave as an industry jealous of its special privileges while not wanting to miss out on anything. Thus the celebratory tone of this release-Religious freedom and the SBA Paycheck Protection Program – by Travis Wussow for the Ethics and Religious Liberty Commission of the Southern Baptist Convention (ERLC)) disturbs me
“Faith-based organizations and houses of worship will retain all constitutional and statutory religious freedom rights as they participate in the PPP. Indeed, as discussed further below,
…several program requirements are modified or waived for faith-based organizations in light of the religious freedom rights that they possess.
SBA Going Easy On Churches
So churches are employers with paychecks to protect just like businesses and other 501(c)(3) organizations, but they won’t have to follow the same rules, because they are, you know, churches.
It is all explained in a Small Business Administration FAQ (Download). We are reminded that churches are not required to apply for 501(c)(3) status. They have it because they are churches.
Churches are exempt from a variety of non-discrimination laws which is what allows Orthodox Jews and Catholics to limit rabbi/priest status to men and the Pussy Church of Modern Witchcraft to limit Trustee status to lesbians. Receipt of PPP will not affect that.
When it comes to handing out loaves and fishes and the like, they won’t be able to discriminate while the loan is outstanding. And as Mr. Wussow notes almost all faith based organizations do not discriminate when it comes to providing social services anyway.
The Big Break
Here is the big break that that churches are getting. SBC is the second largest denomination in the United States in terms of members and largest in terms of number of clergy. (I am trying to nail down the current number but with over 47,000 congregations it is clearly more than 500).
“Some faith-based organizations likely would qualify as “affiliated” with other entities under the applicable affiliation rules. Entities that are affiliated according to SBA’s affiliation rules must add up their employee numbers in determining whether they have 500 or fewer employees. “
“But regulations must be applied consistent with constitutional and statutory religious freedom protections. If the connection between your organization and another entity that would constitute an affiliation is based on a religious teaching or belief or is otherwise a part of the exercise of religion, your organization qualifies for an exemption from the affiliation rules. 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. If, however, your faith-based organization is affiliated with other organizations solely for non-religious reasons, such as administrative convenience, then your organization would be subject to the affiliation rules.
SBA will not assess, and will not permit participating lenders to assess, the reasonableness of the faith-based organization’s good-faith determination that this exception applies.
So it is pretty clear that a very large percentage of SBC affiliated paychecks can be protected.
What About Catholics?
Catholics are the largest denomination in the United States and how this will work for them puzzles me. The country (the whole world I think actually) is divided into dioceses, which will likely have more than 500 employees including the priests (There is a separate issue about clergy being technically self-employed that complicates this). But individual parishes, which may or may not have separate legal existence, might have a few employees and might qualify. I have reached out to the United States Conference of Catholic Bishops, but have not heard back yet.
I also wonder what will happen with the religious orders, which may be exempt under 501(d) rather than 501(c)(3).
It Will Be Complicated
You can’t rule out that money may go to individual clergy as self-employed individuals. Then there will be questions about housing allowances and in-kind housing. And then there are those who elected out of social security. I am just giving a glancing blow to these issues because they are a lot to go into. It will be interesting to see how SBA and the banks grapple with them. Based on how things have gone so far, there will be subtleties and things not so subtle missed
Opportunity For Fraud
You scoundrels out there will be excited by this. There is very little transparency required of churches and this program does not require much in the way of scrutiny. Up until now my Third Church of Syncretal Confusion has existed just in my mind and my $100,000 ministerial stipend has just accrued as treasure in heaven. I have received direction from my spirit guide to apply for$20,000 from PPP. That’s my story and I’m sticking with it.
From Another Retired Guy
I asked Reverend William Thornton, a retired SBC minister, what he thought of the situation. He provided me with the link to the ERLC statement and had the following comment.
“My take, on the record: Churches are concerned about an extended period where they are not able to meet physically. Many are looking into the Paycheck Protection Program as a bridge to maintain staff until things normalize. While some churches are averse to any government aid, my guess is that the majority would see this as something extended to non-profits in the same way as for-profit small businesses. SBC leaders are providing information. Each church makes it own decisions. If I still pastored a church (I’m retired, relatively stress-free) I would probably try and lead the church to make do with what we have without any loans.
I haven’t seen anyone raise a serious First Amendment issue about government aid to churches. Yesterday we were litigating shredded tires in playgrounds in Missouri, paid for by government. Today, the Feds pick up the payroll tab for a while. Brave new world.”
Freedom From Religion Foundation
As you might guess, FFRF is not please with the notion of the Small Business Administration covering a couple of months of payroll for a goodly percentage of American churches. Here is some of their thought on the subject:
The government’s taxing power should not be wielded to oblige Muslims to bankroll temples, or to coerce Jews to subsidize Christian and Catholic churches, or to force Christians to fund mosques, or to compel the nonreligious to support any of the above. One of this country’s first religious freedom laws warned that taxing citizens and giving the money to churches is “sinful and tyrannical.” The right to be free from that compulsion is the bedrock of religious liberty.
Some Thoughts
Reilly’s First Law of Tax Planning – It is what it is. Deal with it. Whatever my Constitutional scruples, I of course contacted the minister of the church I attend irregularly to make sure that they knew about the program and had applied.
For better or worse churches play a very important role in the lives of many people, which I might illustrate by a tale that has some relevance to this crisis. One of the things about being a CPA is that you can end up being the person with the most business savvy that some people have in their lives. If it is someone without much, if any family connection, they can count on you for odd things.
I had a friend like that who I helped out in a variety of ways from a distance. He kept me up to date on his health travails. It was sad but not shocking when I got the phone call from the Knoxville police officer that he had died in his apartment. I would have flown or maybe driven down (It was only a thousand miles), but there was this bad hurricane going on.
One thing that had loomed large in my friend’s thought in the last few years was the prepaid funeral he had arranged. What he or I should have thought of was for him to have given me a copy of the paperwork. Some frantic phone calls on my part connected me with his parish and it was not hard for the pastor to figure it out.
It is even worse of course in this crisis as nobody wants to go into the house of someone who died of COVID-19 to go through their papers. And if they have a pet, it is even worse. There will be a lot of instances where clergy are filling these sorts of gaps, so from a pragmatic viewpoint, PPP for churches is OK with me.
Churches Should Be More Transparent
If churches want to be treated like the other 501(c)(3) when it comes to receiving government bailouts, they should probably be treated the same when it comes to disclosure and file 990s. And if ministers want their paychecks protected like everybody else’s, maybe they should not be able to exclude cash housing allowances. Just saying.
Other Coverage
Tom Gjelten has Another Break From the Past: Government Will Help Churches Pay Pastor Salaries on NPR.
“In a development that could challenge the Constitution’s prohibition of any law “respecting an establishment of religion,” the federal government will soon provide money directly to U.S. churches to help them pay pastor salaries and utility bills.”
Megan Briggs has Paycheck Protection for Pastors: What You Need To Know on CHURCHLEADERS.
This Just In
As I was wrapping this up I heard from Reverend John Gibbons of First Parish in Bedford (Mass) (Unitarian Universalist). Rev Gibbons was my minister at the Unitarian Congregation of Mendon and Uxbridge many years ago. He told me that his congregation is agonizing over whether to go for PPP based on concerns about church-state entanglement.
It is kind of ironic. The “First” in First Parish is quite literal. As was common in Massachusetts in 1729, the parish was founded when the town was founded and was entirely supported by taxation until the early nineteenth century.