Nonprofits Behaving Badly: Paycheck Protection Program Recipients

 More questionable behavior from big nonprofits is in the news lately, centering around millions of dollars received through the Paycheck Protection Program.

Let's start with the Catholic Church, which used a specially crafted and unprecedented exemption from federal rules - customarily churches and faith-based nonprofits promoting religious beliefs aren't eligible for SBA dollars - to land more than $3.5 billion in coronavirus aid. Much of this money went to dioceses that were required to pay huge settlements and/or applied for bankruptcy protection because of sexual abuse scandals. The Conference of Catholic Bishops lobbied vigorously to be included in the program, and for waivers from standard SBA rules:

• A West Virginia diocese, where an investigation last year revealed that the Bishop had embezzled funds and made sexual advances to young priests, received a log of $2 million.
• Saint Luke Institute, a treatment center for priests accused of sexual abuse, received a loan of close to $1 million.
• The New York Archdiocese received a special waiver from the 500-employee cap specified in the Paycheck protection Program in order to receive its funding.
• Four dioceses in bankruptcy proceedings due to mounting sexual abuse claims received loans, despite standing SBA rules prohibiting loans to applicants in bankruptcy.

And then there are the public charter schools, which downplayed their public status to grab some cash. In Chicago, numerous public charter schools received PPP money - despite the fact that all of these schools were already fully funded for the school year, and were slotted to receive extra funding through the CARES Act designated to help offset the pandemic's extraordinary costs. Recipients included wealthy charter school networks like Summit, which has assets of $43 million, a substantial endowment, a CEO whose salary is $500,000 -- and received recent donations from Michael Bloomberg, Bill and Melinda Gates, and the Bezos Foundation.

But this one was the topper for me: the Ayn Rand Institute, a think tank focusing on exalting capitalism, rejection of any kind of social welfare program, and dedicated to the proposition that we are not our brother's keepers, received $1 million.

These well-heeled nonprofits, which by law are supposed to be dedicated to charitable and ethical purposes, managed to manipulate the political system to get public funding that should have been used to help small grassroots organizations that actually make a difference in the world. Let's hope the next round of funding is done with more oversight, less rule-bending, and a true focus on helping essential small nonprofits that are struggling to continue to do important work during this pandemic.