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For quite some time, the United Methodist churches in Iowa have experienced the same trends found in most, if not all, mainline denominations: aging members, decreasing worship attendance, and declining revenue. In recent years, our Iowa churches have also felt the fallout from the natural disasters across our state, and now we are in the midst of a worldwide pandemic. In order to address immediate operational needs stemming from COVID-19, a Crisis Operations Team consisting of leadership across departments formed to respond to immediate needs of staff, churches and ministries during a changing time. The Crisis Operations Team applied for and received a Paycheck Protection Program (PPP) forgivable loan through the Small Business Administration (SBA) in the amount of $1,257,383 through Bank Iowa.
The CARES Act, which includes the PPP, was approved and signed into law by the federal government at the end of March 2020 in response to the COVID-19 pandemic. Eligible organizations, including religious non-profits, could apply through an approved SBA lender beginning April 3rd for a PPP forgivable loan, with the amount not to exceed 2.5 times the average monthly salary and benefits paid during the 2019 calendar year. All staff paid under the Conference’s Employer Identification Number (EIN) during the 2019 calendar year were included in the loan calculation. The Conference EIN covers staff working for the Conference, the Camping Ministry and Retreat Program, Justice for Our Neighbors, Women at the Well, and a small number of District Ministries.
A PPP loan can be forgiven under the following conditions:
75% of the loan amount is used for actual and incurred salary and benefit expenses during the eight-week period following disbursement of the loan proceeds
No more than 25% of the loan can be used for utility, mortgage interest, and lease expenses
The number of full-time equivalent staff must be maintained during the eight-week period following disbursement of the loan proceeds
While this is a summary of the current guidelines, there has been recent action by the federal government to suggest that the forgiveness guidelines may be updated to allow for increased employer flexibility in the use of the funds.
The loan funds have been placed in a separate bank from the Conference accounts. Eligible expenses, including those for JFON and Women at the Well, will be appropriately documented before the funds are transferred to the Conference checking account to pay for qualifying expenses.
At the end of the 8-week period, the SBA’s forgiveness application will be prepared and submitted. When the Council on Finance & Administration (CFA) approved the acceptance of this loan, they stipulated that it be used in such a way as to be forgivable. If a portion of the loan is not forgivable, it will be up to CFA to decide as to the best option for repayment.
Again, the intention is to use these funds in such a way that they would be forgiven at the conclusion of the 8-week period.
The impact of receiving funds from the PPP accomplishes two things; most importantly it enables connectional ministry to continue to occur across the Iowa United Methodist Conference during a time when it’s easy to disconnect. Secondly it provides much needed financial relief and stability for programs and ministries that typically depend on apportionment funding. In addition to simply offsetting salaries and utilities, ministry programs are continuing to share the love of Christ with people in ways both new and familiar.
Using the camping program as an example, virtual programs like Backyard Camp and in-person pop up events are being offered across the state and in local communities as we all work to navigate what it means to share about Christ safely. By utilizing the PPP in this way and focusing on salaries, benefits and utilities specifically, we are creating ministry initiatives from the ground up to reflect our current shared reality without creating future financial obligations for churches of the Iowa Annual Conference.
For more information, please contact Maggie Biggs, Iowa Conference Treasurer and Director of Administrative Services, Joni Mardesen, Iowa Conference Director of Human Services and Benefits Officer, or Bryan Johnson, Iowa Conference Director of Camping and Christian Formation.