COVID-19: Resources and Financial Relief (Updated 4/8/2020)


President Trump recently signed into law the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  Since these acts became law, attorneys, accountants, and other professional persons have been carefully studying the acts to understand their provisions and applicability to a variety of constituents.  The analysis of the acts is ongoing and will continue, and numerous questions are being raised every day regarding the intent of the acts and the interpretation of their provisions.

FFCRA provides relief for adverse health and economic conditions resulting from the COVID-19 pandemic and the CARES Act is intended to stabilize the economy by funding tax benefits for employers and individuals and increasing government support for coronavirus relief efforts.  A brief (actually, very brief) summary of the provisions of each act includes:

  Paid sick leave
  Expanded family and medical leave
  Food assistance
  Funding to help states provide unemployment insurance
  Financial assistance for testing
  Tax credits for employers related to sick and family leave
  Create new small business government-backed lending programs, such as the Paycheck Protection Program (PPP)
  Fund loans for Federal Reserve credit facilities
  Expand unemployment assistance significantly to those unemployed because of COVID-19
  Expand access to retirement plan funds
  Create payroll tax incentives for employers, including tax-exempt entities, to retain employees

So, what should my church be doing?  Below is a list of key recommendations and first steps:

  • Become informed, get started. Don’t delay.  This email provides important links to online resources you may find helpful.  See Recommended Resources at the end of this email, especially the resources provided by the General Council on Finance and Administration (GCFA) and Wespath Benefits and Investments (Wespath).  Print copies of the resource material and highlight key provisions.  Some of the resource material is overlapping.  By reading all of the material, you will increase your familiarity and comfort level with the options available to your local church.
  • Zoom is a free online product that enables small groups to meet virtually, without physical contact, in a secure environment.  Find out more about Zoom at
  • Strongly consider applying for a PPP loan.   Form a small committee to develop your PPP loan application.  Remember, a PPP loan is effectively a grant that does not have to be repaid if all the requirements are met, including maintaining your previous 12-month staffing levels through June 2020.  Also, the amount of funding available through the PPP loan program is limited, so applying sooner is better than waiting.  Apply only for what can be spent for eligible expenses over an eight-week period to avoid a budget burden/pay-back situation.
  • Review your church’s polity on receiving a loan.   Determine how you will obtain any required approvals during social distancing.  The current position of conference chancellors across the denomination is the Discipline doesn’t really address approval of unsecured loans.  Accordingly, while a charge conference would be ideal, a resolution from the finance committee to the church council is sufficient to authorize the local church to seek an unsecured PPP loan.
  • Determine if your local bank is an Small Business Administration (SBA) approved bank and let them know you would like to apply. Ask them to immediately provide you their loan documentation requirements as published by the SBA.  Review your bank’s website to see if it includes their process for receiving PPP loan applications. If your bank is not an SBA lender, ask them to help you find one.
  • Consider maintaining a separate checking account for receiving and disbursing proceeds from a PPP loan.  In this way, you can more easily document your spending of the proceeds on eligible expenses.
  • Make sure your 2019 local church financial statements are complete and your first quarter 2020 financial statements are prepared as soon as possible.  Locate your employer copies of the 2019 Form W-2s and Form 941s.  Consider having a CPA calculate your payroll cost and other eligible expenses.
  • Make sure you know your Federal tax Employer Identification Number (EIN).
  • Make sure you have a current IRS group ruling letter issued by GCFA within the last six months.   (See GCFA Resource Materials below to request a group ruling letter.)

Most churches can benefit from a forgivable loan under the CARES Act PPP program.  Here are some key provisions of the PPP program:

  • Eligible churches and non-profits may borrow up to 2.5 times their average monthly payrolls and benefits up to $100,000 per employee.  
  • Funds can be used to cover payroll, benefits, certain employer payroll taxes, rent/mortgage payments, utilities, and interest on existing debt.
  • Many persons who have analyzed the CARES Act believe clergy housing allowances should be included as part of payroll cost, but the SBA will have to issue guidance on how housing allowances will factor into the calculations.
  • If the church or non-profit meets the employee retention requirements, up to 100% of the loan can be forgiven.
  • The period during which the program applies is February 15, 2020, through June 30, 2020.
  • Express loans (36-hour approval) may be granted for loans up to $1,000,000.
  • Borrower and lender participation fees in the Paycheck Protection Program are waived but lender servicing fees apply up to 5%.
  • Borrowers are required to make a good faith effort to document the loan is necessary due to economic conditions caused by COVID-19.  Borrowers will need to demonstrate the loan was used to retain employees, maintain payroll, and pay rent and utilities.

Please remember the provisions of each act are very detailed, and working with churches is new to the SBA.  Be patient, a little time may be needed for lenders to establish an effective process for working with churches.

Questions are welcome and additional information may be shared as it becomes available.

Finally the information and recommendations provided in this email should not be considered legal or tax advice.  Local churches and other persons or groups reading this email should consult with counsel, tax advisors or other professionals in considering the application of FFCRA and the CARES Act to their unique circumstances.

Blessings in your ministry.


Recommended Resources

General Council on Finance and Administration (GCFA)

Wespath Benefits and Investments (Wespath)

United Methodist Foundation of North Alabama

Small Business Administration (SBA)

United States Department of the Treasury

Richard R. Hammar, Attorney, CPA (Legal and Tax Issues for Churches and Clergy)

Horizons Stewardship

Evangelical Council for Financial Accountability

U.S. Chamber of Commerce

comments powered by Disqus
Discover, Develop and Deploy Spiritual Leaders to Make Disciples of Jesus Christ for the Transformation of the World.