Churches, nonprofits – $350 billion you are eligible for will go fast. Here’s what you must know
On Friday, March 27, 2020, President Trump signed into law the CARES Act, which provides financial assistance to both 501(c)(3) organizations and small businesses employing under 500 employees. Within the $2.2 trillion CARES Act, $350 billion 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 20, I have been watching this bill’s development in the Senate and praying that churches, Christian nonprofits, and Christian schools would be included. On a Friday, March 27 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 nonprofits. Senator Scott helped write this bill as a part of the Small Business Task Force.
Many of you have watched Vanderbloemen’s Facebook Live 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.
$350 billion is an enormous amount of money, and it will help many 501(c)(3)s and small businesses, but how far will $350 billion 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 1.5 million nonprofits 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 = $975 billion
While a $350 billion appropriation to support employers with under 500 employees sounds like a lot of money (and it is), $350 billion 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, nonprofit or Private School) or a small business, we would highly recommend you submit your application for PPP as soon as possible.
Check out ChurchCovid19.com and SchoolCovid19.com for more information.
Sutton Turner is the chief operating officer of Vanderbloemen, which serves teams with a greater purpose by aligning their people solutions for growth: hiring, compensation, succession and culture. Through its retained executive search and consulting services, Vanderbloemen serves churches, schools, nonprofits, family offices, and Christian businesses in all parts of the United States and internationally.