N.J. churches are so cash-strapped, all 5 Catholic dioceses asked feds for coronavirus loans

By Kelly Heyboer
NJ.com
July 12, 2020

https://www.nj.com/coronavirus/2020/07/nj-churches-are-so-cash-strapped-all-5-catholic-dioceses-asked-feds-for-coronavirus-loans.html

A socially-distant Mass at St. Aloysius Catholic Church in Jersey City after places of worship reopened in June for indoor services with limited capacities.

Faced with empty churches and an unprecedented drop in weekly donations, all five of New Jersey’s Catholic dioceses used a special exemption to apply for taxpayer-funded loans through a federal program designed to help keep small businesses afloat during the coronavirus pandemic.

The Archdiocese of Newark and the dioceses of Metuchen, Paterson, Trenton and Camden received loans through the federal Paycheck Protection Program to help pay employees in their parishes, schools and administrative offices, church officials told NJ Advance Media.

Spokespeople for the five dioceses did not respond when asked how much of the taxpayer-backed aid they have received so far, but said the help was sorely needed.

The Associated Press reported Friday that the U.S. Catholic Church has received between $1.4 billion and $3.5 billion in federal coronavirus aid with millions going to dioceses that recently filed for bankruptcy protection or paid large settlements related to the clergy sexual abuse allegations.

“This funding was necessary to help sustain essential ministries and services, and to ensure continued employment of staff members — including school teachers, parish staff, and workers at homeless shelters, soup kitchens and other ministries that serve the most vulnerable among us,” said Maria Margiotta, a spokeswoman for the Archdiocese of Newark.

“These parishes and schools met all requirements for the loans,” Margiotta added. “Without this assistance, they would not have been able to preserve many of these jobs, affecting not only the employees and their families, but also the communities who depend on them.”

Churches and other places of worship usually are not eligible for federal loans from the U.S. Small Business Administration. But faith groups and other nonprofits lobbied Congress and the Trump administration to be included in the $659 billion fund created to help keep Main Street businesses afloat with low-interest, forgivable loans to pay employees during the COVID-19 crisis.

They also lobbied to be exempt from a rule that said only businesses and organizations with less than 500 employees were eligible for the money.

Catholic dioceses, parishes, schools and other ministries have so far received approval for at least 3,500 forgivable loans through the program, an Associated Press analysis of federal data found.

The Archdiocese of New York received 15 loans worth at least $28 million just for its top executive offices, the AP found. St. Patrick’s Cathedral on Fifth Avenue alone was approved for at least $1 million.

The diocese in Orange County, California, which recently opened a new $70 million cathedral, received at least $3 million in federal loans. The Wheeling-Charleston, West Virginia, diocese received a $2 million coronavirus loan a year after a church investigation found its former bishop embezzled money and was accused of sexual misconduct.

It is difficult to get a full accounting of exactly which Catholic dioceses or institutions of other religions received forgivable loans through the Paycheck Protection Program. Data on the program was released after pressure from Congress and a lawsuit by news organizations, including the AP. But the data did not include the identities of loan recipients that received less than $150,000, a category that includes many local churches, the AP reported.

The program has also been criticized for handing out coronavirus loans to celebrities, billionaires, politicians, lobbying firms and large corporations.

In New Jersey, the Archdiocese of Newark said more than 200 of its parishes in Essex, Bergen, Hudson and Union counties couldn’t conduct weekly collections during the state-mandated shut down of worship services.

“Although the Archdiocese of Newark did not accept the entirety of funding assistance for which it was eligible under the law, many of our archdiocesan parishes and schools did apply for and receive vital financial assistance via SBA Paycheck Protection Program funding,” Margiotta said.

New Jersey, which has one of the largest percentages of Catholics in the nation, only began allowing indoor worship services in June. But gatherings were limited to 50 people or 25% of a building’s capacity — whichever number is smaller. Larger services can be held outdoors.

The state’s Catholic dioceses have not said how large the financial impact has been on the dioceses or local parishes. Even with a decline in attendance and donations, the work of the church has continued, said Anthony Kearns 3rd, chancellor and spokesman for the Diocese of Metuchen.

“Even as we face the uncertainties caused by the coronavirus pandemic, our parishes, social service ministries and schools have continued the work of Jesus, ministering and responding to the needs of others,” Kearns said. “The suspension of in-person Masses at our parishes has resulted in a challenges for our parishes and institutions financially and the PPP was a great assistance to those who were approved.”

The Diocese of Trenton said it used the federal loans to continue to employ many of the nearly 7,000 people working in its parishes, schools and other organizations.

Officials in the Trenton diocese objected to any links between the Catholic Church running short of money during the pandemic and the recent payouts to victims of clergy sexual abuse.

“The suggestion by some in the media that previous legal settlements paid by the Church have anything to do with needing this COVID relief is false and slanderous,” the Diocese of Trenton said in a statement.

New Jersey’s five dioceses created a fund last year — called the New Jersey Independent Victim Compensation Program — for priest sexual abuse victims who want to settle their cases privately without going to court.

As of January, the program had awarded more than $11 million in settlements to 69 New Jersey victims whose cases were resolved, administrators said. Hundreds more cases still had to be reviewed.

New Jersey’s five dioceses previously paid out at least $50 million in settlements to clergy sexual abuse victims in the years before the compensation fund was established, church officials said. Much of that money came from insurance policies and self-insurance funds set up by the dioceses.