An investigative report released by the Associated Press (AP) last month found that billions in taxpayer dollars flowed to religious organizations under a coronavirus relief plan, even though the churches didn’t need it.
The money was funneled to churches under the Paycheck Protection Program (PPP), which was launched in May 2020. The idea behind PPP was simple: Because so many businesses had to close their doors during the pandemic, millions of people were thrown out of work. PPP loans – which were essentially federally funded grants, since the government said it would forgive most of the loans – were pitched as a way to help small businesses, many of which operate on a small financial margin, meet payroll and keep employees afloat during a difficult time.
Many small businesses did get PPP aid, but the law was interpreted to include houses of worship, ministries and religious non-profits in its largess. Billions flowed to religious entities. At the time, Americans United expressed concern, noting that this was the first time in American history that the federal government was subsidizing clergy salaries.
Now it turns out that some of the religious organizations that received PPP loans were hardly in dire financial straits.
The AP found that more than 200 Roman Catholic dioceses received $3 billion in PPP assistance – yet many of them had plenty of money on hand to weather the storm and/or continued to receive donations from their flocks.
“As the pandemic began to unfold, scores of Catholic dioceses across the U.S. received aid through the Paycheck Protection Program while sitting on well over $10 billion in cash, short-term investments or other available funds, an Associated Press investigation has found,” reported the AP. “And despite the broad economic downturn, these assets have grown in many dioceses.”
The AP highlighted the flow of PP money in three states:
Kentucky: The Archdiocese of Louisville received $17 million in PPP money, even though its income actually grew during the early months of the pandemic. A financial statement released by the archdiocese noted, “The Archdiocese’s operations have not been significantly impacted by the Covid-19 outbreak.”
Illinois: The AP found that the Archdiocese of Chicago had more than $1 billion in cash and investments on hand as of May 2020 and that church members were donating “more than expected.” Nevertheless, the archdiocese received at least $77 million in PPP aid.
North Carolina: The Roman Catholic Diocese of Charlotte received more than $8 million in PPP funds, even though it had assets of $100 million, which, during the early months of the pandemic, increased to $110 million. The Raleigh Diocese collected at least $11 million in PPP aid even as it sat on cash and assets worth $170 million.
Catholic churches weren’t the only ones to take advantage of the tax windfall. The AP also noted that Baptist, Methodist, Jewish and Lutheran faith-based entities received a total of $3 billion in PPP aid. But as the AP noted, “Catholic institutions also received many times more than other major nonprofits with charitable missions and national reach, such as the United Way, Goodwill Industries and Boys & Girls Clubs of America. Overall, Catholic recipients got roughly twice as much as 40 of the largest, most well-known charities in America combined, AP found.”
These findings dovetail with a report issued by Americans United in July that found that billions in PPP aid was diverted to private religious schools, some of which had large endowments and received more money per student than nearby public schools that educate exponentially more children. (For example, St. Andrew’s School, an Episcopal institution in Florida, received $2 million to $5 million in PPP aid, even though it has an endowment totaling more than $19 million.)
As this issue of Church & State was going to press, new pandemic relief bills were being considered. Americans United has called on Congress and the Biden administration to take steps to ensure that public funds issued under new legislation end up in the hands of those who really need it and that taxpayer money doesn’t pay for clergy salaries, sectarian education or other religious activities.