PPP Loan Helps Congregation Weather Financial Storm

For many congregations combating declining membership and budgets, the COVID-19 pandemic exasperated already drained resources.

For Good Shepherd Lutheran Church in Royal Oak, Michigan, pandemic resulted in temporarily closing the congregation’s building and transitioning to the now infamous virtual church of Zoom meetings, recorded services, cameras, and ring lights.

Krister Ulmanis, Pastor of Good Shepherd said, “We have not lost many people during the pandemic, but the financial income continues to trend downward.”

Giving has plummeted over the last five years from $225,697 in 2011 to $148,709 in 2020. Ulmanis additionally shared that during the past five years the congregation has experienced budget deficits as high as $53,000.

“Through tight financial management we have managed to keep the actual deficit each year to between $10,000 to $15,000,” Ulmanis said. “This has been covered by designated funds [and] investments, which have now been reduced to the point that this is no longer an option.”

Additionally, the financial situation has been further exacerbated by the retirement of many of the most active financial members. From 2019 to 2020, the congregation lost 11 donors. Further, members who donate $1,500 or less per year now make up more than 50% of the congregation’s total giving, “which is not sustainable even for the minimal budget that we operate with currently,” Ulmanis said.

But as bleak as the situation appeared, shutting the church was never an option.

“Our regular bank told us point-blank that we could apply but there would be no guarantee that they would even review our application.”

Ulmanis and the leadership team at Good Shepherd discussed applying for the government PPE Loan when they first heard about the program that provides small businesses with funds to cover up to eight weeks of payroll and applicable overhead costs. As the discussion wore on, Good Shepherd missed out on the first round of availability. When the second round began, leadership went to the church’s regular bank to ask if they could apply.

“Our regular bank was slow to respond, but when they did respond, they told us point-blank that we could apply but there would be no guarantee that they would even review our application,” Ulmanis said. “This was discouraging news for the congregation.”

Taking advantage of the Paycheck Protection Program (PPP). Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020, the congregation applied through the ELCA Federal Credit Union. Guided by the staff through the process, Ulmanis said,“We felt very good being treated with the courtesy given us, and the help provided. The ELCA credit union and MIF were truly ministering to our congregation in our time of financial need.”

Receiving $23,990, the church was able to pay utility bills and salaries for a three-quarter-time pastor, a part-time administrative assistant and a part-time organist.

“There is no doubt the PPP loan through the ministry of the ELCA credit union and MIF was truly a lifeline for the congregation,” he said. “This was great news for the parishioners, as those who are attending are extremely dedicated to the congregation.”

Recommending PPP loans to other congregations, Ulmanis expressed his gratitude to the ELCA Federal Credit Union.

Source: Living Lutheran