Submitted by the Rev. Dr. C. Dennis Shaw
Statistician, Mountain Sky Conference, UMC
In response to the COVID-19 Pandemic, the US Government, through the Small Business Administration (SBA), implemented a Paycheck Protection Program (PPP). PPP starts as a “loan designed to provide a direct incentive for small businesses to keep their workers on the payroll” but “SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.” These loans/grants were specifically made available to churches.
The question emerges because the Mountain Sky Conference employs an income model to apportion to local churches the costs of the Conference: is this grant “income?” We call the apportionment: Mission Shares.
We have historically not included loans as income subject to Mission Shares. Loans are paid back, with the income to pay the loan back, if not a capital campaign, generally subject to Mission Share calculation. We would be asking for two shares on the income: loan and repayment income. Grants are a different animal. Generally, churches do not operate from grants, and most grants that are received are either from the Conference itself or other faith-based organizations, e.g., the Mountain Sky Conference. Grants are either from the Conference and exempt from Mission Share calculations or are generally for an activity that is a pass-through on income, e.g., a food pantry. PPP loans are contingent upon requirements, but if requirements are met, they become grants.
When the loan becomes a grant, report it as income but eliminate it from adjusted income and report it as income in the monthly report following its conversion from loan to grant. A line will be created in our Mission Share system labeled “Payroll Protection Program Grant.” The model will not calculate the grant in Adjusted Revenue, and thus not subject the church to paying the Mission Share for the grant.
Please report PPP income but it will not lead to a suggested minimum for Mission Share payment. Churches can always pay more than the calculation if they so desire and wish to share.
Notes to Dennis at firstname.lastname@example.org
or to Angela at email@example.com
are most welcome. Again, thank you!