Why Churches & Non-Profits Should Apply for the CARES Act Now

On Friday, March 27th, 2020, the President signed into law the CARES Act which provides financial assistance both 501(c)(3) organizations and small businesses employing under 500 employees.  Within the $2.2T CARES Act, $350B is targeted for the Paycheck Protection Program (PPP) funding 2 ½ months of an organization’s average monthly payroll costs (including benefits) as a loan. This loan can be forgiven if the size of the organization’s workforce remains the same in 2020 as it was in 2019.*  Since Friday, March 20th, I have been watching this bill’s development in the Senate and praying that churches, Christian non-profits, and Christian schools would be included.  On a Friday, March 27th webinar with ARC Churches that I was invited to attend, Senator Tim Scott of South Carolina clearly communicated that the CARES Act included churches and Christian non-profits.   Senator Scott helped write this bill as a part of the Small Business Task Force.  

Many of you have watched Vanderbloemen’s Facebook Lives and webinars this week as we tried to prepare Christian organizations for this infusion of cash from the government that could be forgiven.  We have spent many hours answering your questions.   

With that being said, there is a need for you to move quickly this week as you prepare your applications. 

$350B is an enormous amount of money, and it will help many 501(c)(3)s and small businesses, but how far will $350B go?    

Let’s do some easy math.  

In the United States, there are over 5.8 million small businesses** with 500 employees or less.  There are approximately 300,000 churches*** and 1.5M non-profits**** in America.  

If we just look at small businesses, 88% of small businesses have 20 employees with an average salary of $45,857.  This salary does not include benefits and other payroll costs covered under the PPP.  

5.8M Small Businesses X 88% X 20 employees X 2.5 months of $45,857 salary/12 months = $975B

While a $350B appropriation to support employers with under 500 employees sounds like a lot of money (and it is), $350B is not a big enough pocketbook to cover the potential payouts if every small business applies.

So if you are a 501(c)(3) (Church, Non-Profit, or Private School) or a small business, we would highly recommend you submit your application for PPP as soon as possible.  

Visit our blog post Details on the CARES Act where we are keeping everything updated.

Check out ChurchCovid19.com and SchoolCovid19.com for more COVID-19 resources to help you lead through this crisis.

Note: Vanderbloemen is not a legal or financial advisor and this article should not be construed as legal or financial advice.

*Full-Time Employee Equivalent (FTE) of Feb. 15, 2020 to June, 30 2020 divided by FTE of Feb. 15, 2019 to June 30, 2019 equals the percentage the loan is forgiven if used for expense provided in the PPP.  

**2015 Non-employer Statistics (NES), Statistics of US Businesses, US Census Bureau