The Baptist State Convention of North Carolina (BSCNC) and convention legal counsel will offer guidance and assistance to N.C. Baptist pastors and church leaders in the coming days regarding the impact on churches and other non-profits by the federal coronavirus relief package that has been passed by Congress.
The Coronavirus Aid, Relief, and Economic Security Act – also known as the CARES Act – is a $2.2 trillion aid package that provides economic relief to many different groups in response to the COVID-19 pandemic. Groups that will receive aid from the legislation include individuals, corporations, small businesses, the health care industry, and state and local governments.
A significant portion of the legislation will fund a paycheck protection program to support ongoing operations of small businesses. Under provisions of the act, churches and most other non-profit organizations may apply for payroll protection loans. The amounts of these loans backed by the Small Business Administration will depend upon the average monthly payroll of the church during the prior year. Up to 100% of the loan may be reclassified as a grant based upon the percentage of the proceeds being used to keep employees on the payroll in the coming months.
The U.S. House of Representatives approved the CARES Act on Friday, March 27, following its passage by the Senate on Wednesday, March 25. Following congressional approval, the legislation was set to go before President Donald Trump to be signed into law.
When applying for the loans through local banks under Small Business Administration guidelines, North Carolina Baptist churches will likely need a letter from the state convention confirming that the church is affiliated with the convention and is included under the state convention’s group exemption ruling letter from the IRS. The church will likely also need a copy of the actual group exemption ruling letter to the convention.
In a proactive measure following passage of the bill on Friday, state convention officials have begun the process of preparing to send the needed documents to its affiliated churches beginning the week of Monday, March 30.
All of the approximately 4,300 N.C. Baptist churches will receive copies of these letters by mail. Those churches that have email address on file with the convention will also receive copies of these letters electronically. Churches that have requested and received a separate 501(c)(3) ruling letter from the IRS will be urged to simply destroy the documents received from the convention, as a church cannot be covered under a group exemption ruling letter if it has received its own ruling letter. This is the case for a small number of N.C. Baptist affiliated churches.
Convention officials request that pastors and church leaders be patient and refrain from calling or emailing the convention to request letters.
“We will be providing additional guidance as soon as the current legislation has been signed by the president and our legal counsel has reviewed the details to provide accurate information,” said John Butler, BSCNC’s executive leader for business services.
Additional updates from the BSCNC on the legislation will be posted on the convention website.