CARES Act and congregations

Should WELS churches take government money meant for small businesses? Church is non-profit? Is this part of separation of church and state?

One of the programs of the CARES Act was the Paycheck Protection Program. It was “designed to keep small businesses, including qualifying non-profit organizations, afloat during mandated Coronavirus Disease 2019 (‘COVID-19’) related closures.”  The program provided potentially forgivable loans for small businesses, which included nonprofit organizations like churches. Each WELS congregation had the responsibility of determining whether or not to participate in that program. Below is information that WELS shared with called workers in April 2020:

“One program under the CARES Act receiving quite a bit of attention is the Paycheck Protection Program (PPP). Under the PPP, certain businesses, including nonprofit organizations (which would include WELS congregations and WELS affiliated ministries) may be eligible to receive a potentially forgivable loan through the Small Business Administration (SBA). Generally, the loans are for the lessor of $10,000,000 or 2.5 times the 2019 average monthly payroll cost. PPP loans may be helpful to nonprofit organizations by providing money to those organizations to pay for certain qualifying expenses, such as payroll costs for called and hired workers who are still employed, mortgage and rent payments, and utility costs.

“We do not view this as a dependence on the government for carrying out ministry; rather it should be viewed as a type of restitution to compensate for financial hardships resulting from government actions to mitigate the spread of the infection.

“We also encourage all of our members to realize that financial assistance from the government is not a substitute for faithful Christian stewardship. Please remember to support your congregation’s ministry and called workers with your faithful offerings, even if you are not able to gather for worship.”

Another provision of the CARES Act provides charitable contribution incentives. That provision created a new “above the line” deduction (i.e. for taxpayers who take the standard deduction). This deduction will permit them to deduct up to $300 of annual monetary contributions.