Churches and Ministries Had Paycheck Protection Program Loans Totaling $7 Billion Forgiven
Urban and larger churches were more likely to accept the loans, according to study.
Churches and Christian ministries accepted more than $7 billion in Paycheck Protection Program (PPP) Loans under the Coronavirus Aid, Relief, and Economic Stability (CARES) Act, according to research conducted by Christianity Today.
About one-third of all churches in the United States accepted PPP assistance — totaling $5 billion — during the pandemic, the research found, and almost all of those were forgiven.
Churches that received PPP funds tended to be older and larger or led by older pastors, the study showed. Churches in urban or suburban areas were much more likely to take the PPP loans than those in a rural setting. Over 50% of urban and suburban churches received financial assistance during the pandemic compared with only 30% of rural churches.
The loans varied in size from a few hundred dollars to over $10 million. Heritage Christian Services, a New York-based ministry for persons with disabilities, took in $10 million in PPP loans. Oklahoma City’s Life.Church received about $7 million.
Some churches paid back their loans, while others were found to have committed fraud in obtaining them. The U.S. Department of Justice reported on October 11 that four more individuals in Tennessee or Arkansas were indicted for fraudulent PPP loan applications.
For example, Stephen Brown, 44, of Memphis, allegedly submitted fraudulent applications on behalf of Light of Glory International Church and Stephen Brown Ministries, for which he obtained approximately $149,900 in Economic Injury Disaster Loan proceeds. He is charged with two counts of wire fraud.
Access to MinistryWatch content is free. However, we hope you will support our work with your prayers and financial gifts. To make a donation, click here.
The CARES Act was passed during the early days of the pandemic under the Trump administration to help small businesses and organizations continue paying staff during enforced shutdowns. Most churches who took the loans used them to retain staff and told ChurchSalary they would have struggled without the funds.
PPP loans also helped some Christian organizations stay afloat, but others who received millions in PPP loans later closed, including Alliance University and The King’s College.
More than half of the Christian colleges that belong to the Council for Christian Colleges and Universities received PPP loans—totaling $174 million. For example, Houston Christian University received $6.5 million in loans from the program.
The loans were limited to organizations with fewer than 500 employees, so some larger colleges did not qualify.
Some of the Christian colleges took advantage of the availability of PPP loans to expand remote learning opportunities.
“The technology they purchased met the immediate COVID-impacted demands, and now, post-COVID, is being leveraged to continue developing and expanding delivery methodologies beyond the traditional face-to-face classroom,” Association for Biblical Higher Education President Philip Dearborn told Christianity Today.
Both Crown Financial Ministries CEO Chuck Bentley and well-known financial advisor Dave Ramsey advised churches against accepting the PPP funds, basing their concerns on potential interference by the government in the ministry.
According to the Small Business Administration, which administered the PPP program, faith-based ministries and churches were eligible for the PPP loans. It said that an “otherwise eligible organization” should not be “disqualified” from the loans based on their religious affiliation.
The Institutional Religious Freedom Alliance founder Stanley Carlson-Thies says he believes the PPP program was constitutional. He told Christianity Today “the alternative would have been to single out for disfavored treatment certain religious organizations — like a fire department fights fires in every building except religious facilities.”
Main photo: Photo by Karolina Grabowska / Pexels
