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The Archdiocese St. Paul and Minneapolis is among dioceses around the country whose central offices received loans from a federal Paycheck Protection Program to help retain employees as the COVID-19 pandemic spread, said Tom Mertens, chief financial officer.
About three-quarters of the 186 parishes in the archdiocese also applied for PPP loans, he said.
“I’m not aware that anyone was denied a loan,” he said. “We had some parishes that returned loans, or that didn’t accept a loan after being approved, because the initial economic hit from the pandemic was not as bad as they expected.”
The PPP loan program was part of emergency economic relief passed by Congress early last year to assist small businesses and nonprofit organizations through the pandemic. Congress passed another round of emergency relief in late December that includes a revised PPP loan program, and it is debating a $1.9 trillion relief plan proposed by President Joe Biden.
The Archdiocesan Catholic Center — which, as an organization, employs about 140 people — does not qualify for the second-round PPP, which requires a drop in gross receipts of 25% or more in any quarter of 2020 compared with the same quarter in 2019, Mertens said.
About 20 parishes to date have applied for a second PPP loan. Applications are due by the end of March, he said.
A recent article by The Associated Press about the Church and the PPP loan program was inaccurate, in part because it noted assets held by the Catholic Church as a whole, without recognizing that in some cases parishes are separate entities, Mertens said. In the aggregate, for example, three parishes might appear to be fine, but the healthy financials of one effectively masks the deficiency of two, he said. The article also failed to distinguish between unrestricted assets that might be used for general operations, and restricted assets, such as scholarship funds, that are not available for any purpose but tuition, Mertens said. The intention of the economic relief was so that employers would retain employees to avoid the negative impacts of unemployment to the economy.
Overall, government PPP loans have allowed the Catholic Center and parishes to avoid layoffs and furloughs during the COVID-19 pandemic, Mertens said. Keeping employees working has meant that the many community services provided by parishes have continued during these difficult times, he said.
“PPP came out when there was tremendous uncertainty and those we serve were in need,” Mertens said. No one knew how long the pandemic would last or “how long churches would be closed. That was a real issue from our perspective here at The Catholic Center,” he said.
“Our revenue stream is 80% assessment income that comes directly from parishes. And if their doors are closed, and revenue isn’t coming from them,” the Archdiocesan Catholic Center would have been out of cash in less than six months, Mertens said.
The $1.98 million loan will not have to be repaid if employees were retained, which is what has occurred at the Archdiocesan Catholic Center, Mertens said.
Thanks to generous parishioners and other donors, the downturn in the local Church thus far has not been as a bad as was initially thought it might have been, although uncertainty remains as the pandemic continues, Mertens said. Many parishioners who could afford to do so increased their giving to the Church, he said.
“We’ve had parishioners really step up, realize the situation the Church has been in and given more,” Mertens said. “We’ve been blessed by their actions.”
A summary of the Archdiocesan Catholic Center’s financial report for fiscal year 2020, from July 1, 2019, to June 30, 2020, with comments from Mertens and Archbishop Bernard Hebda, was printed in the Dec. 17 issue of The Catholic Spirit. For more detailed financial statements along with an independent auditor’s report, go to archspm.org/finance-accounting.
Parishes adjust as COVID-19 pandemic enters second year, many grateful for PPP loans
Father Leo Schneider at Holy Name in south Minneapolis is preparing for his second faith-filled book study via Zoom, one way to continue reaching parishioners in the midst of the COVID-19 pandemic.
He has watched the weekend offertory go down in the first year of the pandemic, but he is grateful for a federal Paycheck Protection Program loan of about $56,000 that helped retain staff, and electronic giving at the parish is providing a steady base of funds.
“We’re behind what we were, but not bad,” said Father Schneider, who also is pastor of St. Leonard of Port Maurice in south Minneapolis. It’s difficult to see very far ahead, he said, but so far, “it’s not so bad, considering all things.”
As the pandemic enters its second year this March, Tom Mertens, chief financial officer of the Archdiocese of St. Paul and Minneapolis, said many of the 186 parishes in the archdiocese might give similar reports on their financial condition.
Overall, plate and envelope giving at parishes, in aggregate, since March 2020 compared with 2019 has been down, but not by more than 6% in any calendar quarter, Mertens said. In the three months ended March 2020, just as the pandemic began, it was down less than 1% compared with the year before; in the quarter ended June 2020, it was down approximately 3%; in the three months ended in September, it was down around 6%; and in the quarter ended in December, it was down less than 3%.
Some parishes have struggled, with offertory giving dropping as much as 50% to 75%, Mertens said. In the fiscal fourth quarter in 2020 — April through June — the archdiocese gave parishes a discount on assessments, money given to support programs and other efforts, which amounted to a nearly $1 million savings for parishes, Mertens said.
Another form of government assistance might help qualifying businesses and nonprofits this year: a pandemic-driven employee retention credit of up to $7,000 per employee per quarter in 2021, Mertens said.
The 91 Catholic elementary and high schools in the archdiocese overall are doing well, with some struggling more than others, said Jason Slattery, director of education. Many elementary schools rely a great deal on parish investments and tuition payments, he said.
“Thankfully, those two levers have been, to this point, holding,” Slattery said.
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