Church agencies get go-ahead to seek US loans

Other Manual Translations: português español

United Methodist general agencies now have the green light to apply for small-business loans under a new program funded by the U.S. CARES Act.

During an April 8 online meeting, the General Council on Finance and Administration board unanimously approved an application from the finance agency and authorized other church-funded agencies to seek the loans.

The U.S. Coronavirus Aid, Relief and Economic Security — or CARES Act — created the Paycheck Protection Program with the aim of enabling small businesses to keep workers on the payroll during pandemic-related closures.
 
Under the program, the U.S. Small Business Administration and its partner banks are distributing about $349 billion in federally guaranteed loans to businesses with fewer than 500 employees.

“For the first time ever, these loans are available to nonprofit organizations as well,” Rick King, GCFA’s chief financial officer, told the board. “Another unique feature of these loans is that a portion of these loans has forgiveness.”

In other business

With the COVID-19 pandemic delaying General Conference by more than a year, the General Council on Finance and Administration board members wondered what that might mean for their work.

The 21 voting GCFA board members are elected to four-year terms. Of those board members, 16 are elected by General Conference and the other five by the board itself. All board members serve on a voluntary basis. 

“With the postponement of General Conference 2020, there will of course be no member election, but the work of the council must continue,” said Mary A. Daffin, chair of the board’s Legal Responsibilities and Corporate Governance Committee. Fortunately, she said, the Book of Discipline — the denomination’s policy book — offers clarity. 

In Paragraph 805.1F, the Discipline says GCFA board members “shall serve until their successors are elected and qualified.” 
As the Small Business Administration makes clear, churches and other faith-based organizations are among those eligible to apply.
 
The federal program has sparked some debate about whether this use of taxpayer dollars violates the U.S. Constitution’s prohibition against Congress making a law “respecting an establishment of religion.”
 
However, no such debate arose at the GCFA board meeting, which lasted less than 30 minutes and was devoted mainly to sharing information about GCFA’s application.
 
United Methodist churches across the denomination’s theological spectrum already have submitted applications for the loans. 

At a time when giving is down and ministry needs are high, churches have a particular interest in additional support. While church employees pay state and federal taxes, they do not qualify for unemployment insurance in most states.
 
The maximum loan under the Payment Protection Program is the lesser amount of either $10 million or 2 1/2 times a church’s average monthly payroll.
 
The Small Business Administration makes loan forgiveness available for the amount used over eight weeks after the loan’s approval if at least 75% of the funds are used for payroll costs and the rest is used for mortgage interest, rent or utilities. The employees supported through the program also must live in the United States.
 
“It essentially works as a grant,” King told the board.

GCFA is applying for about $2.65 million under the program. Of that amount, the agency estimates about $2.1 million will be forgivable.

The requested loan covers support for employees of GCFA and its subsidiaries, the United Methodist Church Foundation and United Methodist Insurance.
 
The loan application also includes support for U.S. Council of Bishops staff and General Conference staff. That’s because the finance agency oversees both the Council of Bishops’ annual spending and the budget for organizing the denomination’s top lawmaking assembly. The Rev. Moses Kumar, GCFA’s top executive, is the General Conference’s treasurer.

Subscribe to our
e-newsletter

Like what you're reading and want to see more? Sign up for our free daily and weekly digests of important news and events in the life of The United Methodist Church.

Keep me informed!

Altogether, GCFA says 115 employees are covered by its consolidated loan application. 

If the loan wins approval, GCFA will have two years to repay whatever is not forgiven at an interest rate of 1%. The program has no penalties for early repayment. 

King noted that 1% interest is extremely low. He told the board that current agency investments are yielding about 3%.

No one at the board meeting questioned whether budget relief was welcome during a time of great uncertainty. 

Christine Dodson, board vice president and treasurer of the North Carolina Conference, commended the legal teams of both GCFA and Wespath, the denomination’s pension agency, for putting together information on how churches can apply for the loans as well.
 
Hahn is a multimedia news reporter for United Methodist News. Contact her at (615) 742-5470 or [email protected]. To read more United Methodist news, subscribe to the free Daily or Weekly Digests.

Like what you're reading? Support the ministry of UM News! Your support ensures the latest denominational news, dynamic stories and informative articles will continue to connect our global community. Make a tax-deductible donation at ResourceUMC.org/GiveUMCom.

Sign up for our newsletter!

UMNEWS-SUBSCRIPTION
General Church
The Rev. Adam Hamilton, senior pastor United Methodist Church of the Resurrection, speaks about the pandemic and the proposed denominational split during an interview at United Methodist Communications in Nashville, Tenn. The church will host 2021 Leadership Institute on Sept. 29-Oct. 1 with a focus on helping pastors and laity address divisions in their communities. Photo by Mike DuBose, UM News.

Adam Hamilton: Leading in polarized times

Ahead of the United Methodist Church of the Resurrection’s 2021 Leadership Institute, UM News spoke to the Rev. Adam Hamilton about the pandemic and proposed denominational split.
Social Concerns
Domestic violence rates increased more than 8% as lockdowns were ordered during the COVID-19 pandemic. United Methodist Men and the YWCA of Nashville and Middle Tennessee collaborated to develop the AMENDing Through Faith program designed to help change harmful attitudes about women. Photo by Ronny Perry, United Methodist Communications.

Program preaches that real men respect women

An eight-week course offered to United Methodist men contradicts the sexist attitudes that can lead to domestic violence.
Global Health
A few mourners gather outside the home of Lillian Chikomo in Harare, Zimbabwe, for her funeral. They sang softly while Simon Mafunda (center) helped make sure COVID-19 precautions were followed. Most people who would have attended the service in person paid their respects by driving by slowly in front of her home. Mafunda is lay leader of the Zimbabwe East Conference of The United Methodist Church. Photo by Kudzai Chingwe, UM News.

COVID-19 challenges congregations, families

With churches and schools in Zimbabwe forced to close doors at various times during the pandemic, finances and livelihoods have suffered.