I had been wringing my hands at how difficult the SBA made the first Paycheck Protection Program Loan (PPP) Forgiveness Application. It was like they had asked the IRS for advice. The EZ application cuts it down to only one page of numbers. Without a doubt, your bank will be asking you for more proof, but why would you make it so complicated to ask “How much of the loan did you spend?” That isn’t something that you need pages of worksheets to answer.
The vast majority of churches should qualify for the EZ application. I would also guess that the vast majority should choose the 24-week period instead of the 8-week to maximize forgiveness. Watch the video below for the walkthrough:
The most disheartening and discouraging thing a church can do is adopt an unrealistic budget because you are planning to fail. Why is it that churches tend to abandon all common sense and reason when it comes to budgeting? They budget $100,000 in income and expenses knowing full well that they never bring in more than $90,000 in income.
When you challenge them on this, the most common response is, “This is where you need to have faith.” Didn’t you have faith last year when you fell short? And the year before that? They’re obviously not talking about faith that the income will come in. Is it faith that the church board will once again approve a crappy budget? A realistic budget doesn’t start with knowing what you want to spend, but with knowing how much you money you can expect to receive.
A big concern for me with the Paycheck Protection Program loans was how churches would actually receive forgiveness. Churches accepted these loans without knowing what strings would be attached. The good news is that forgiveness is surprisingly simple!
If you applied for the loan, watch this now because it will give you ideas on maximizing your forgiveness. You will end up with less forgiveness if you:
Reduced your FTE during the crisis without a plan to return back to normal FTE by June 30th.
Reduced an employee’s salary/wages by more than 75% during the crisis without a plan to return it back to normal by June 30th.
The first stock gift I ever received as a church treasurer was several shares of Coca-Cola Company stock from a wonderful member named Char. Char wasn’t a multi-millionaire. She was just like so many ordinary people that happen to own stocks, bonds, or shares of a mutual fund. You don’t need to have a Bill Gates in your church to receive a stock gift. Ordinary people make these extraordinary gifts each year. Because of Char’s example, I actually made my own stock gift a few years later to support the church’s capital campaign.
I was fortunate enough to have David Nash (a financial guru) to guide me on receiving this gift. Not every church will have a David Nash. You don’t need special knowledge to accept a stock gift. You just need the right connections. If you are a United Methodist in the Dakotas, the Dakotas United Methodist Foundation is your David Nash.
Normally I aim for helping church finance committees, pastors, and other leadership. With this pandemic, a lot of energy has gone towards helping the church as a small business, but what about the church as a group of individuals? If you go to long without considering the well-being of the individual, the church is going to struggle.
While there’s a ton in the CARES Act to benefit folks, I see three that are probably the biggest ones directed to individuals. Most of this is with the United Methodist pastor in mind, but they definitely do apply more broadly.
Many churches recently applied for the Paycheck Protection Program through the Small Business Administration (SBA). It’s all well and good to receive those funds, but will you receive forgiveness from the SBA? The forgiveness will depend on your churches ability to properly track expenses related to this program.
I used to be an auditor for the State of North Dakota. The government isn’t too forgiving when you don’t follow their rules. If you don’t watch the video, here’s my key advice: Read the loan agreement and take notes. I know we usually don’t read those long documents, but this pain could save you from a whole lot more future pain.
A lot of businesses are struggling during the COVID-19 crisis. Many people are staying home…either out of work or working remotely? This is a perfect opportunity for one business to flourish…the Email Scammer. Think about it. How many more emails are we sending to the people we work with? How many us are used to conducting business like this? How many of us are a little panicked or on edge? This is a perfect storm for email scammers. Here’s some helpful hints:
Check the email address: Depending on the scammer, sometimes the incoming email address looks fine, but when you reply, it’ll reply to a different email address.
Does the email sound right: While scammers can make an email look like it’s coming from the person in charge, they can’t impersonate the tone. Does it sound like the Pastor or the Boss? Does it have their regular email signature?
Text or call to confirm: If something looks fishy, but you still aren’t sure, instead of emailing back, give them a quick text or phone call.
Below is a video where I document an attempted email scam. After seeing a TED Talk by James Veitch where he messes with email scammers, I decided to have some fun too. I figure that if I’m wasting the scammers time, he’s not ruining anyone else’s finances. Someone was pretending to be my co-worker Sheri so I played along. I’m not recommending you do this with any scammer.