We want to share the following information as the financial impact of the coronavirus pandemic continues. Congregations can seek financial relief from the federal government, the Church Pension Fund and the bishop’s office. This is a lot of information but we urge you to read through this carefully.
Here are details about each form of relief currently available:
PAYROLL PROTECTION PROGRAM – WHAT CHURCHES NEED TO DO NOW
We strongly suggest that all congregations apply for this loan as it can be forgiven and it is a way to retain staff. This is time sensitive due to a limited amount of funding available, so please apply as soon as possible. By obtaining this assistance it will free up more diocesan money in the long term for assistance.
The $2 trillion federal economic stimulus bill known as the CARES Act was passed and signed last Friday. It includes a provision offering forgivable loans to small businesses, including non-profits, for the purpose of maintaining payroll and paying other qualified expenses, including mortgage interest, rent, and utilities. The maximum amount of the loan is 2.5 times the organization’s average monthly payroll expenditure over the previous twelve months, including most employee benefits, pension contributions, and employer 403(b) contributions.
The application period opens on Friday, April 3. The application period ends on June 30, but because the amount available for these loans is capped, churches should apply as soon as possible
.
The loans are backed by the Small Business Administration but are administered by banks. You may seek loans from any
Small Business Administration-approved lender
. Due to the size of the program, banks that have previously not worked with the Small Business Association are now doing so. We have set up an agreement with PNC to assist our congregations with this process. If you are interested in using PNC their application portal is not yet created. It should be open tomorrow. You can go to the link below to show interest and fill out the quick form. This is not the application, but it could put you on the list to receive the portal.
Alternatively contact your local bank to see if you can apply through them. We suggest that you attach this
letter to the Treasury
as there has been some confusion if churches may apply.
Here are some notes for completing your application:
- The application asks for information about and signatures of owners. Nonprofits, including churches, do not have owners, so these fields can be skipped.
- The form asks for the number of employees you have. This should be your average headcount over the last 12 months, including 1099 contractors. The count should be number of people – there is no differentiation between full-time and part-time employees and contractors for the purpose of this question.
- Special rules apply for any employees whose earnings (including salary and SECA reimbursement) exceed $100,000. See the attached fact sheet for details.
While we are still awaiting specific guidance about exactly what documentation will be required alongside the application, congregations can begin preparing by assembling the following information. It is possible that not all of this information will be required. It is also possible that other information not listed here will be required. This list is based on the guidance we have at the moment, and additional information is emerging quickly.
- IRS 501(c)3 letter
- 2019 IRS Quarterly 940, 941 or 944 payroll tax reports
- Last 12 months of Payroll Reports beginning with your last payroll date and going backwards 12 months
- Payroll report must show the following for the time period above:
- Gross wages for each employee, including the officer(s) if paid W-2 wages.
- Paid time off for each employee
- Vacation pay for each employee
- Family medical leave pay for each employee
- State and Local taxes assessed on the employee’s compensation for each employee.
- 1099’s for 2019 for independent contractors that would otherwise be an employee of your business.
- Do NOT include 1099’s for services.
- Documentation showing total of all health insurance premiums paid
- Document the sum of all retirement plan funding that was paid (do not include funding that came from the employee’s out of their paycheck deferrals).
- 401K plans, Simple IRA, SEP IRA’s
- Recent mortgage or rent statements (if applicable).
- Recent utility bills.
Most or all of the loan is forgivable, provided the following standards are met:
- Loan proceeds must be spent on qualifying expenses: payroll and associated benefits, rent, utilities, and mortgage interest, within eight weeks following the issuance of the loan.
- Staff and payroll must be maintained for the eight-week period after the loan is issued.
- While not required, it is advisable that churches set up a separate account for administration of loan proceeds, to make it easier to document compliance with these standards.
- For any portion of the loan not forgiven, payments may be deferred for six months, with a maximum 10-year term, a maximum interest rate of 4%, and no prepayment penalty.
PPP loans are unsecured, so they may be applied for without the approval of the Diocesan Council, however please put it on record with Canon to the Ordinary, John Johanssen that you have applied for such loan.
We suggest that you get a resolution signed by your vestry authorizing either your treasurer, administrator or clergy to apply for such loan. Here is an
example
.
OTHER FINANCIAL RELIEF PROVISIONS IN THE CARES ACT
Refundable payroll tax credits
: This small-scale relief, which provides employers a 50% credit for their share of Social Security taxes while business operations are suspended, is
not available to employers who receive a PPP loan and not recommended
.
Expansion of unemployment insurance
: Church workers are not generally eligible for unemployment benefits because churches generally do not pay into the unemployment insurance system. The CARES Act expands the definition of who qualifies for coverage to include church employees displaced due to the pandemic. Additionally, the act provides $600 per week in addition to the state unemployment benefit to any displaced church worker, including clergy and 1099 employees. States are in charge of administration of unemployment benefits. Displaced workers should
file their unemployment claims online
as soon as possible. Processing takes a minimum of 21 days, and the current high volume means it may take longer.
FINANCIAL RELIEF AVAILABLE THROUGH CHURCH PENSION GROUP
For all congregations, CPG is providing a 90-day payment grace period, ending June 30, 2020, for the following payments:
- Pension assessments;
- Health and dental insurance premiums due to the Medical Trust;
- Property & casualty insurance premiums and life insurance premiums due to the Church Insurance Company; and
- Disability insurance premiums to companies administered through CPG.
Institutions that can afford to make full or partial payments for pension assessments, health benefits (including individuals on extensions of benefits), property & casualty coverage, life insurance, and disability policies offered through a Church Pension Group company should continue to do so, but CPG are temporarily implementing a 90-day hardship grace period for those who cannot make timely payments. If you feel you cannot pay these assessments please contact Canon to the Ordinary
John Johanssen
to liaise with CPG.
FINANCIAL RELIEF AVAILABLE THROUGH THE BISHOP’S OFFICE
The diocese is offering several opportunities for financial help to congregations during the pandemic crisis. These include:
- Mission Share deferment for up to six months
- Financial assistance to cover payroll, utilities and property insurance (if this results in a short term loan from the William Cooper Procter Fund, this will be an interest-free loan)
- Church Pension Fund waiver of clergy pension plan assessments (maximum of 2 months)
- Emergency fund for outreach through Episcopal Community Ministries. Any donation to ECM will be matched by the bishop through the Procter Fund. You can donate here - https://ecmsouthernohio.org/. As mentioned in Bishop Breidenthal's 3/28 pastoral letter he hopes that we will all remember that our theology is one of abundance and not scarcity. This is a unique opportunity to reach out to each other in this common time of need, both spiritually and financially.
Questions about Mission Share payments should be directed to the Rev. David Getreu at
[email protected]
. Questions about any of the other forms of relief may be directed to the Rev. Canon John Johanssen at
[email protected]
or Carine de Lange at
[email protected]
.
Online giving service:
Individuals may make gifts to congregations using the diocese’s online giving form at
https://diosohio.wufoo.com/forms/wzviwgl17ia0ah/.
The diocese will absorb payment processing fees while our churches remain closed. Contributions will be disbursed to congregations each week via check (as long as there is a minimum of $50).
Bishop Breidenthal, his staff and the Trustees and other leadership of the diocese are working hard to be responsive to the resource needs, financial and otherwise, to enable on-the-ground ministry in a fast-changing situation, and we suggest you check our website daily for updates
http://diosohio.org/doing-church-during-covid19/
and read the
e-Connections
and clergy news being sent frequently.
Even with these relief provisions and government assistance, due to limited financial resources and the fluidness of the current situation, painful choices about how most faithfully to use such limited financial resources will be unavoidable. Congregations should know that they are not alone in these challenges, and that the bishop’s staff is available for consultation and assistance each step of the way even if we are working faithfully from home.
