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Thousands of Catholic churches received PPP loans: report

Thousands of Catholic churches in the U.S. received loans from the Paycheck Protection Program (PPP) meant for businesses struggling amid the coronavirus pandemic, according to a report by CBS News

The majority of the 17,000 Catholic churches in the United States — between 12,000 and 13,000 parishes — applied for the PPP loans that were created as part of COVID-19 stimulus efforts. 

The PPP is a federal funding program provided through the Small Business Administration (SBA) that administers forgivable loans to small businesses provided they use most of that money to keep their employees on staff. 

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According to guidelines set by the SBA, "Churches (including temples, mosques, synagogues, and other houses of worship), integrated auxiliaries of churches, and conventions or associations of churches qualify for PPP and EIDL [Economic Injury Disaster Loan Emergency Advance] loans as long as they meet the requirements of Section 501(c)(3) of the Internal Revenue Code, and all other PPP and EIDL requirements." 

An estimated 6,000 parishes received funding through the first round of funding provided by the CARES Act passed in late March, and about 3,000 parishes received funding through the fourth coronavirus relief bill that passed last month, according to Pat Markey, executive director of the Diocesan Fiscal Management Conference. 

Markey argues that the funding is not exactly for “houses of worship or churches” but rather is necessary to keep people employed by the Catholic church on the payroll. 

“PPP is about keeping people on payrolls and a large segment of our society is the not-for-profit world. And a large segment of that society are churches and houses of worship. And they have people on payrolls too,” Markey told CBS News. 

Forty percent of Protestant churches in the U.S. also filed for PPP loans through the CARES act, or the SBA, according to a survey by LifeWay Research. Of those that applied, 59 percent were approved, according to CBS News. 

The federal government has struggled with oversight of the distribution of the SBA loans as small businesses are competing with large companies for federal funding. 

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Major restaurant chains such as Ruth’s Chris Steak House and Sweetgreen at first received millions of dollars in PPP loans, sparking widespread backlash amongst lawmakers and the American public. Both companies have since returned the money.

Some in the Christian community do not believe that churches should receive federal funding. 

Jon Costas, a former Republican mayor in Indiana, argues that suburban churches could drain federal funding allocated for small businesses, and that there are Americans who are unemployed who need the money more.

"It's quite possible that if most churches take advantage of PPP loans, it could easily capture one third of the entire $350 billion allocation," Costas wrote in Christianity Today last month. 

“I believe the decision to apply for and receive PPP funds is one of the most important issues the church will face in this decade. It will set a precedent for the future and may, in time, hinder the mission of the church when the strings attached to government funds are not consistent with Scripture,” he continued. 

Lawmakers are currently working on the next round of coronavirus relief legislation, but there are sharp divides between the parties over where the money should be focused.

Updated 3:50 p.m.