After the first Covid-19 stimulus bill was signed into law, the San Francisco Opera received an $8.9 million loan under the bill’s Paycheck Protection Program to keep about 400 employees on payroll and out of the unemployment lines. The loan was crucial, opera officials say, and hasn’t had to lay people off partially as a result of that loan.
But as the pandemic’s disruptions endure, the opera is ineligible to apply for a second PPP loan because lawmakers, when crafting the second round of the Covid-19 stimulus bill, restricted the program to businesses and nonprofits with fewer than 300 employees, down from a cap of 500 in the first round.
So as the application period for the second round opened last month, San Francisco Opera General Director Matthew Shilvock instead held out hope that other aspects of the new stimulus bill, such as the Save Our Stages program, would provide support for the opera and other arts organizations that have been hammered by social-distancing mandates that shuttered concert halls.
“It does appear that in this latest legislation, there are a number of different avenues which will allow arts companies to take advantage of federal support at a critical time when so much has now run out from the initial federal offerings,” says Shilvock. “Our hope is — for both the company and the broader arts community — that between PPP and Save Our Stages and the employee-retention tax credit, there will be options for companies even if they are not eligible for that second round of PPP.”
The minute there’s a shutdown, all bets are off.
The San Francisco Opera is not alone. Hundreds of nonprofits that received a PPP loan in the first round are now trying to figure out how — if at all — they can get federal funds from the second round of the stimulus now that they exceed the loan program’s employee cap. According to data from the Small Business Administration, at least 1,873 nonprofits with more than 300 employees applied for the first round, receiving $6.4 billion in loans designed to support payroll for roughly 747,570 workers for 12 weeks. The true number is likely higher, as roughly 25 percent of the organizations that received PPP loans do not have employee counts recorded in the error-riddled government data.
Keeping Watch
Mark Boyd, CEO of Goodwill Industries of Southern New Jersey, hopes he does not need a second PPP loan. In the first round, his organization got a $4.2 million loan to support payroll for 453 employees. The loan was crucial and prevented the organization from embarking on steep layoffs early in the pandemic when public health officials in New Jersey shuttered in-person retail stores. Now that the stores are open, albeit at socially distanced occupancy levels, Boyd said he would not apply for the program a second time even if he were eligible.
“The PPP loan was critically important to us,” said Boyd. “As long as I am not shut down, then I don’t need the PPP program. I know we can generate the revenue we need to make our payroll.”
But as case numbers continue to surge after the holidays, and new more \contagious Covid variants emerge, Boyd worries he could be caught off-guard if spiking numbers cause public-health officials to shutter retail again.
“I am very concerned about another shutdown,” he said. “As long as we are allowed to stay open, then I don’t need that. The minute there’s a shutdown, all bets are off.”
The Chinese American Service League, which provides social and medical services to Chinese Americans in the Chicago area, also has seen its finances stabilize in recent months. When the pandemic began, the social-distancing mandates forced the charity to shut down operations temporarily while it figured out how to safely execute its mission. The group makes money by charging a fee for its services so when it wasn’t providing services, it wasn’t bringing in revenue.
“When the pandemic first hit, there was no precedent,” said Jered Pruitt, chief operating officer. “A lot of our seniors were very worried about catching Covid and suspended their services, and we had a lot of staff who said they didn’t want to work a lot of hours right now, so we had a decrease in our revenue stream.”
Since then, the group has seen its revenue rebound as it has adapted to the need for remote and Covid-conscious service delivery, such as virtual child-care support and “family-based” home care in which relatives are paid to provide care to seniors. The changes were implemented over the summer, in the relative calm between pandemic spikes. In November, as numbers began to increase again, Pruitt said, there was less disruption. As a result, he doesn’t see a need for a second PPP loan.
“We did not see the panic of the first phase,” said Pruitt. “Even if we were qualified, we would not apply for it.”
Other organizations that had more than 300 employees and received PPP loans in the first round say they still plan to apply for the second round because their staff count has dropped below the threshold. Such is the case for the Boys & Girls Clubs of Puerto Rico. The group saw corporate support erode through the pandemic, and officials described the financial impact as “massive.” In the first round, it received a PPP loan for $1.4 million to cover payroll for 447 employees. Because grant-funded projects have run their course, officials said the group now has fewer than 300 employees and plans to apply for the second round.
“We are right below 300 people because I have been terminating people where the grants have expired,” said Olga Ramos Carrasquillo, president of the Boys & Girls Clubs of Puerto Rico. “We have made the decision that we are going to give the clubs more flexibility to offer community services,” offering only programs paid for by grants.
