Diocese counters report: Paycheck Protection funds were lifeline
CHARLOTTE — Dioceses across the country, including the Diocese of Charlotte, are refuting an Associated Press report they say erroneously asserts that dioceses had millions of dollars “available” when the pandemic hit and did not need help from the federal Paycheck Protection Program.
Created by Congress last spring to keep people employed during the pandemic, the Paycheck Protection Program offered forgivable loans to businesses, nonprofits and churches with fewer than 500 employees that needed help covering the cost of salaries as the economy shut down.
The Diocese of Charlotte is comprised of more than 100 separate Catholic entities – all separate employers with separate finances and administrations – including parishes, schools and other ministries across the western half of North Carolina. About half of those entities qualified, applied and were approved for Paycheck Protection loans in 2020 – which helped keep more than 1,000 workers, teachers and counselors fully employed and insured after the lockdown last March.
Overall, 56 entities across the diocese received Paycheck Protection funding totaling about $8 million, which had to be spent on payroll, mortgage or rent, and utility costs. Loan amounts were prescribed by the Paycheck Protection Program, overseen by the Small Business Administration. On average, parishes received $72,180, and several ultimately were able to return some of the funding as parishioners and donors responded to help the Church weather the downturn.
“When the pandemic hit and churches were forced to close, offertory and other income fell dramatically, as it did for businesses and organizations nationwide,” said Bill Weldon, the diocese’s CFO. “Without this assistance, our parishes, schools and ministries would have had to consider layoffs, furloughs and pay cuts – the very impacts the Paycheck Protection Program was designed to help employers avoid.”
Instead, the various Church entities found new ways to provide comfort throughout the pandemic – through livestreamed, outdoor and other safe religious services, and essential programs such as in-person education, emergency food and utility assistance, mental health counseling and spiritual guidance, and the provision of sacraments such as baptisms and last rites.
A Feb. 4 Associated Press article questioned whether dioceses really needed the Paycheck Protection funding. The story, Weldon said, erroneously claimed the Charlotte diocese “had roughly $100 million available” last spring – a number the AP cobbled together by adding the diocese’s liquid assets with funds that are donor restricted, designated for specific purposes, and owned by the 100-plus Catholic entities in separate savings accounts.
“The AP story mischaracterizes the financial picture of the Diocese of Charlotte,” said Weldon. “It vastly overstates our available assets, ignores current financial liabilities and erroneously suggests that restricted donations and funds designated for specific purposes could have been diverted to cover payroll, rent and utilities. The story also conflates assets owned and controlled by more than 100 separate entities within the diocese, suggesting these separate funds make up one large account for anybody to use. This is simply not true.”
Citing the diocese’s independently audited June 30, 2020 financial statements, Weldon noted that, excluding parishes which report separately to their parishioners, the diocese actually had financial assets available for general expenditures (after subtracting current liabilities) of about $9 million – which equates to only six weeks of operations. Parishes and schools had access only to their own savings, which varied widely.
Immaculate Conception Church in Hendersonville cut expenses substantially and leaned on its savings when the pandemic hit, as income dropped 40 percent in May 2020 compared to the prior year. Despite slashing non-essential expenses, projections showed the parish could not sustain its payroll expenses as revenue continued to diminish.
As recommended by the parish’s finance council, Immaculate Conception’s pastor Father Christian Cook applied for a forgivable Paycheck Protection loan and received $284,000 in funding, which helped meet salary expenses and kept staff working through the summer. Yet as the pandemic dragged on and income failed to recover, it became clear staffing could not be sustained at its pre-pandemic level.
“We kept hoping we might come out of it, and that things might start getting back to normal,” Father Cook said. “While the PPP loan was a blessing, and we were able to maintain full staffing to serve our parish for quite some time despite reduced income, we reached a point where we could no longer sustain the expenses associated with full staffing levels. It was a heartbreaking decision to have to eliminate positions here at Immaculate Conception, but we were left with no other choice.”
Weldon said it would have been unethical to divert money from designated purposes such as employees’ health insurance, pensions or school programs to cover salaries, as suggested in the AP report.
“This would be like shifting money parents pay in fees for school construction to cover salaries at the central office of the diocese, or taking a parish’s hard-earned savings that are set aside for a new parish hall or youth program to pay for another ministry’s rent and utilities,” Weldon said. “Our donors and parishioners rightfully expect that we will honor the purpose for which funds are given to our parishes, schools and ministries.
“As trusted stewards of the funds generously given to us, we take very seriously our responsibility to ensure that internal controls are in place to safeguard assets, ensure all financial activity is accounted for properly, and that all funds received from donors and other constituents are used in accordance with their intentions.”
Many parishes’ savings are modest or donor-restricted, he said, so the Paycheck Protection funds provided a crucial lifeline when offertory collections – parishes’ primary source of income – fell off an average of 21% with the sudden shutdown. Many smaller and rural parishes saw much steeper declines, and at year end, almost one-third of parishes reported their fourth-quarter offertory remained down 30% or more.
As separate employers, each of the 92 parishes and missions, 19 schools and other ministries in the diocese had to evaluate – in consultation with their finance councils – whether they met the criteria to qualify for Paycheck Protection and then decide whether to apply.
Overall, 45 parishes received assistance ranging from $8,025 to $334,784.
Nine schools got loans totaling $2,885,734 to pay teachers and staff: Asheville Catholic, Bishop McGuinness, Immaculate Heart of Mary, Our Lady of Grace, Our Lady of Mercy, Sacred Heart, St. Leo, St. Michael and St. Pius X.
Catholic Charities received $629,109 in funding to keep staff employed. They were able to continue providing vital support with food pantries, counseling services, legal immigration services, family enrichment and more.
The diocese’s central office received $1,550,103 to pay salaries of administrative support staff that serve all of the parishes, schools and agencies across the diocese – including accounting, planning, development, technology, tribunal, legal and human resources staffs.
“Nearly a year later, while funding remains tight, most of our parishes, schools and ministries are on the road to recovery financially from the worst effects of last spring’s economic shutdown,” Weldon said. “Thanks to the generosity of parishioners and donors, the Church has been able to weather the immediate worst effects of the pandemic and remain a beacon of hope throughout this dark and uncertain period.”
— Patricia L. Guilfoyle, Editor