On Monday, I learned that thousands of pastors and ministry leaders around the United States were on Zoom calls (the new normal for millions of Americans), conference calls, and webinars learning about the government’s new Payroll Protection Program for churches, ministries, and the not-for-profit sector.
As a ministry leader, we received a direct offer to participate that came following a contact from our bank. We are faced with a similar decision as many of you. Here is the summary report from our CFO:
I received a phone call this afternoon from (omitted), Sr. VP for Commercial Banking. (He) wanted to be sure that Crown is aware of the Small Business Administration (SBA) Paycheck Protection Loan Program for which it qualifies. The written guidelines from the SBA are expected to be released either later today or tomorrow. (He) will send me a copy of the guidelines once he receives them. Some timesensitive
• The loan window will open for applications this coming Friday, April 3rd and will close in June.
• Demand is expected to be very high.
• Once the $350 billion in allotted funds are gone, no additional funds can be allocated under this SBA program.
• Expectations are for them to “sell out” quickly.
• The maximum loan would be 250% of Crown’s average monthly payroll costs based on February 15th headcount levels and adjusted for employees earning over $100K/year.
• Interest rate would be .5% APR for a 2-year rate.
• Some, but probably not all, of the loan could be forgiven if there is not a reduction in the number of employees or a reduction greater than 25% in wages paid to employees or payrolls are restored afterwards.
In terms of full disclosure, the program is being rolled out through the banks who will receive an administration fee. (Anonymous) Bank does have at least two incentives to promote the SBA loans:1) they are being paid a fee to originate and manage the loan (which can later be sold on the open market), and 2) The loans can help stabilize their customer base with government guaranteed loans and lessen the economic shock that many are reeling from.
If Crown wants to participate in this program, it will probably need to act quickly. The Crown board will need to decide before Friday if we are going to request the loan through (Bank) to have the best opportunity to receive funds. While no one is sure, it will probably take at least three weeks for funds to be disbursed.”
We qualify for approximately a $250,000 loan/grant. That is very significant to us and is worthy of a measured decision. I am sure many of you are faced with a similar decision; for some, the stakes may be much, much higher.
There are pros/cons as well as Biblical examples supporting each position. I listed a few below.
Pros:• This loan/grant would be a hedge against our downside risk for losses in FY21.
• It would help protect our cash and our staff through the storm. Nobody really knows how bad this may get. I hear both extremes about the economy and land somewhere in the middle. I am not panicked.
• We can pay it back in full if we actually use it or do not use it.
Cons:• So far, we have chosen to never borrow money. We teach others to avoid it or only do so for short-term needs.
• I would not be able to communicate to our donors/partners that we are fully trusting God for His provision – unless we deem this His provision.
• We would be taking taxpayer money from other groups that may need it more. Many taxpayers will hate the idea of supporting God’s work.
There are a number of examples where God used the government or king to save his people. Pharaoh allotted land to the Jews in Goshen to survive the famine. Artaxerxes supported Nehemiah so he could rebuild the broken walls of Jerusalem. Esther and Mordecai got help from the king.
• We can’t say it is an absolute principal not to take government help and others should not take it either.
• I would need to explain to our staff if we decide to turn it down as they need to be aware of our “why”. They may feel vulnerable.
• My sense is the Church could fall into a trap of state control, but that is an unknown and more of a caution.
I like what Alan Mullaly did for Ford Motor Company in the 2008-2009 Great Financial Crisis. By making the courageous decision to turn down the bailout offer for the automotive manufacturers, he increased goodwill and brand value with their consumer base (see American Icon by Bryce G. Hoffman).
For more than 44 years since Larry Burkett started the ministry, Crown has taught God’s people to be faithful stewards and to fully trust God with their finances. We have had a number of economic storms and cash flow crises during these past four decades. In 2008-2009, our survival was at stake, but we have never borrowed money to sustain the organization. I don’t see any reason to change now.
Our bottom line is that we think we should not accept any taxpayer funds for our ministry, and that we should trust the Lord to provide. At the same time, I don’t think it is sinful for others to accept these funds if it is paid back in full.
A Few Yellow Flags to ConsiderFor the record, I suspect the program may not be helpful to our cause in the long run. If giving is down so quickly, it may not rebound in the two years of the loan term. What happens if the loan does not become a grant, and you cannot pay it back? We don’t know what the next quarter will bring in terms of the impact on charitable giving, let alone the next two years. This calls for extreme caution.
It is extraordinary that so many churches are supposedly running for help, deeming the situation “urgent” so early on. It makes me wonder if this program is a Golden Calf form of idolatry. It saddens me that American churches and ministries are impacted so suddenly by a drop in giving. Have pastors talked to their people first? Will they disclose it if they take the loan/grant? Are they already carrying lots of debt that will be made worse by accepting a loan? Will the church survive to pay it back? What happens
to our collective witness if many default on their repayment covenants?
Martin Luther King, Jr said “The church must be reminded that it is not the master or the servant of the state, but rather the conscience of the state.” Will we surrender that high calling?
Mark my words, there will be a time when the winds shift unfavorably towards the Christ-exalting ministries who have an outstanding debt from this program or even those who received the funds in the form of a grant. It will come through a taxpayer legal challenge or complaint, or through a political football used to punish those who approved it during the crisis. There is a possibility that it will even be used to threaten our tax-exempt charitable status in the future.
Pause. Pray. Seek counsel. Don’t join what one pastor describes as the “gold rush” because it seems so urgent right now. You will be glad you were very careful before getting entangled with Caesar.
Chuck Bentley is CEO of Crown Financial Ministries, the largest Christian financial ministry in the world, founded by the late Larry Burkett. He is the host of a daily radio broadcast, My MoneyLife, featured on more than 1,000 Christian Music and Talk stations in the U.S., and author of his most recent book, Money Problems, Marriage Solutions. Be sure to follow Crown on Facebook.