By G. Jeffrey MacDonald

The Paycheck Protection Program (PPP) has given out more than $1 million in forgivable loans to each of 56 Episcopal organizations, according to a Small Business Administration database. Some plan to pay the money back, while others say there’s no need because it went to pay employees as Congress intended.

The largest Episcopal beneficiaries are organizations with substantial payrolls: schools, dioceses, social service providers and homes for the elderly, as well as parishes with affiliated entities. The $525 billion program was designed to help employers keep workers on the payroll during coronavirus shutdowns by covering as much as 10 weeks worth of compensation.

The PPP, which closed August 8, allowed employers to receive funding equivalent to 2.5 months of average monthly payroll in 2019. At least 75 percent had to be in the category of employee compensation. That means those receiving upwards of $1 million from PPP must have paid out at least $3.9 million in salaries, wages plus benefits in 2019, according to David Heywood, a retired tax attorney who advised Episcopal congregations on PPP borrowing last Spring.

“If you run on hard times, you don’t wait until you spend your last nickel of your capital to start laying people off because your purpose is to keep the business or the institution running for a long time,” said Heywood, a member of St. Francis Church in Potomac, Md. “The PPP loan made it much easier for people on the boards… to say we’re going to keep everybody on the payroll.”

Topping the Episcopal list were 24 entities that each received between $2 million and $5 million from the PPP. The tally includes 10 Episcopal schools, eight homes for the elderly and four social service providers. The Diocese of Los Angeles and St. Martin’s Church in Houston, where the annual budget tops $15 million, also banked more than $2 million from the PPP, according to the SBA.

With 9,590 members at the end of 2019, St. Martin’s is the largest congregation in the Episcopal Church. According to the Rev. Dr. Russell Levenson, rector, PPP funds went to three separate nonprofits: St. Martin’s Church ($1.8 million); St. Martin’s Hope and Healing Center & Institute ($464,000); and St. Martin’s Preschool ($235,000). Those funds allowed for maintenance of staffing levels and continuation of social ministries without cutting back during the pandemic, Fr. Levenson said.

“If we had not received that support, we really would have been in a position where we would have had to look at everything and ask: how do we keep the lights on, how do we keep people employed, how do we continue outreach in the community?” Levenson said.

Though St. Martin’s Church has an endowment of about $10 million, restrictions on how the funds can be used mean that fiduciaries can’t simply make withdrawals to pay salaries and benefits, Levenson said. He noted that the church allocates more than $2 million per year for causes beyond its own expenses, including a diocesan assessment, and will be applying to have its PPP loan forgiven.

“I have no qualms about it because of what St. Martin’s and her members give back to the community,” Levenson said.

Some well-endowed PPP recipients have come under public pressure, including from the Trump administration, to repay the funds even if they qualify under the program rules to have their loans forgiven.

“It has come to our attention that some private schools with significant endowments have taken PPP loans. They should return them,” said U.S. Treasury Secretary Steven Mnuchin in a May 1 tweet.

Episcopal schools that received upwards of $2 million would have needed to have 2019 payrolls topping $7.8 million, according to the PPP formula. These included St. Andrew’s Episcopal School in Potomac, Md., where President Trump’s son, Barron, is a student, as well as less prominent schools such as St. Mary’s School in Memphis, Episcopal School of Jacksonville (Florida) and Christ Church School in Greenville, S.C.

Some Episcopal schools declined to apply and others opted to return their PPP funds after “thinking long and hard about the moral implications of this process,” said the Rev. Daniel Heischman, executive director of the National Association of Episcopal Schools, in an email. He did not say which ones are opting to repay.

He said those that kept the PPP funds also grappled with the moral implications before doing so. He explained that they were financially challenged last spring as they increased financial aid for hard-hit families, canceled revenue-generating summer programs and, in the case of boarding schools, refunded room and board fees.

“It is not the case that schools that have large endowments (a large percentage of those endowments being restricted) were able to access those endowments for purposes of keeping workers on the payroll,” Fr. Heischman said. “Substantial endowments do not provide a simple solution to crises such as these.”

Garnering some of the largest payouts were not just the organizations with the largest payrolls. Example: among the seven dioceses that received $1 million to $2 million were East Carolina, Maine, and Western Massachusetts. Each received more from the PPP than neighboring and nearby dioceses with significantly larger payrolls. In the Diocese of Western Massachusetts, the PPP loan covered payroll expenses for diocesan staff and employees of the Diocese’s 51 congregations.

Meanwhile select congregations received six- and seven-figure sums. For instance, in Mississippi, just one Episcopal parish received more than $150,000: St. James in Jackson. In Pennsylvania, only one got more than $350,000: St. David’s in Wayne. And in California, one parish took in more than $1 million: St. Andrew’s in Saratoga.

Most of the nine parishes that received upwards of $1 million from PPP also operate a school, a home for elders or both. These include Christ Church in Covington, La.; St. Stephen’s Church in Miami; and Church of the Good Shepherd in Dallas.

In one case, the seven-figure scale is largely explained by a cemetery. The amount received by St. Michael’s Church on 99th Street in New York City would have been enough to pay an entire year’s worth of church salaries and wages, according to the 2020 budget.

However, the church also owns and operates St. Michael’s Cemetery on 88 acres in Queens. The PPP loan went to pay both church and cemetery employees, according to spokesperson Patricia Allen. The cemetery lists 16 employees on its website and generates $420,000 for the church this year, representing 23 percent of the church’s projected revenue.

“Our successful application to the Paycheck Protection Program for a loan of approximately $1 million enabled us to retain all of our employees at the same level of compensation and benefits,” Allen said in a statement from St. Michael’s Church. “It is a great blessing that we did not have to resort to furloughs or salary reductions.”

Editor’s Note: This story was altered in response to additional information received from the Diocese of Western Massachusetts.