A Message from the Board of Trustees; Repayment of the Federal Paycheck Protection Program (PPP) Loan

Dear First Unitarian Members,
As you may know, the Board of Trustees voted at its March 17, 2021, meeting to
repay the federal Paycheck Protection Program (PPP) loan that the First Unitarian
Church of Pittsburgh received in April 2020 rather than to seek loan forgiveness.
The $71,200 loan (along with $661.28 in interest) was repaid on March 24, 2021.
We were required to either seek forgiveness or repay the full loan amount (i.e.,
we couldn’t keep part of it and pay back part of it).

Realizing that congregants may have questions about this decision, the Board would
like to take this opportunity to explain the rationale for it, as well as what it may
mean for both the finances and the overall life of our church going forward.
Generally stated, the Board weighed the financial risk of repaying the loan against
its charge to discern the vision, identity, and mission of our church. In the end, the
Board decided that repaying the loan not only was financially possible but also
created an opportunity to protect the church’s reputation while promoting greater
accountability, both to our church’s financial health and to each other. We believe
that repaying the loan can help to increase fundraising and membership, while at
the same time deepening the personal commitment we feel toward each other as we
seek to build the kind of Beloved Community that we aspire to be.

The Original Loan Decision
The current Board believes that the decision by the 2020 Board to apply for the PPP
loan was entirely justified. In early 2020, there was considerable uncertainty about
both the general U.S. economy and specifically the finances of our church. We knew
that we faced a loss of rental income due to the closure of the church building. We
did not know whether or by how much pledge fulfillments and yields on our
investments would be reduced.
Without the PPP loan, it’s very likely that—out of an abundance of caution—we
would have seen fit to furlough some staff, eliminate positions, drastically curtail
program funding, or a combination of all three. The loan was an excellent insurance
policy against financial volatility.

How the Board Made the Decision to Repay the Loan
Our Treasurer, Controller, and Assistant Controller were satisfied that the church
met the conditions for loan forgiveness, should we decide to apply for it. The
Finance Committee recommended to the Board that we apply for loan forgiveness,
citing the following reasons, among others:
We were fully compliant with the legal requirements for loan forgiveness, having
maintained payroll and paid for essential operating costs as required under the
terms of the loan.
The church operated at a loss in 2020. Our loss of rental income alone was
almost a third of the value of the PPP loan.
The financial security that would come with receiving loan forgiveness would
make it easier for us to consider future new expenses, such as increasing the pay
rate and hours for our childcare givers once the church reopens, presumably
later this year. This would in effect allow us to make up for some of the
compensation that was lost during the pandemic.
During the period covered by the loan, we spent more than the full value of the
loan on maintaining salaries, not counting the other expenses, such as utilities,
that the PPP loan could also be used to cover.
The UUA is supportive of congregations applying for loan forgiveness.

The Board also considered the following factors:
• 2020 Financial Performance
In the past year, our church has not experienced the kind of negative financial
impact that we were concerned about at the time we decided to apply for the
PPP loan. We ended 2020 with a deficit of approximately $8,400, which was fully
covered by a surplus from 2019. Most importantly, the church was able to retain
and pay all of our staff during this time—an outcome we can be very happy
At the same time, church members stepped up and donated close to what they
pledged, a testament to the value they place on this religious community, even
during a time when in-person meetings have been impossible. Thank you to
everyone who has provided this needed financial support to our congregation.
We couldn’t have met our obligations without it.

2021 Budget Estimate
We don’t yet know what the full impact of the pandemic will be on our church’s
finances in 2021. However, our 2021 budget (which the Board approved in
December 2020) projects a spending deficit of about $65,000, about 31% of
which can be attributed to one-time expenses related to welcoming a new
settled minister (search expenses, moving expenses, etc.). The 2021 budget was
prepared in the expectation that the church can cover this deficit through a
combination of the remaining 2019 surplus and de-obligating certain reserve
A balanced budget should always be the goal of financial decision-makers for any
organization. However, the Board felt that taking a one-time distribution of
reserve funding to cover the 2021 budget deficit was justified, given the
extraordinary challenges of the pandemic and the added ministerial expenses we
incurred this year. The Board in no way intends this to be a precedent for future
church spending or budget balancing. On balance, however, we believed that we
could clearly afford to repay the PPP loan.

Optics of Repaying the Loan vs. Applying for Forgiveness
The Board considered the possibility that applying for the forgiveness of the PPP
loan might create less than favorable optics for our church. As churches go on
the record for whether or not they took advantage of PPP funding, the public
could seek to portray such funds as a windfall, especially for churches of more
than modest means. We believed that by repaying the loan, we would be clearly
seen as a religious community that acknowledges its privilege, plans for
contingencies, take precautions and pays back its debts when it can. The
decision to repay the PPP loan, however, is not intended to preclude the Board
from considering or accepting other opportunities for financial support that may
arise in the future.

Future Fundraising
The Board was also concerned that, if we applied for and obtained forgiveness of
the PPP loan, some church members and friends might become complacent in
their giving habits or in volunteering their time to support fundraising efforts.
While trusting that this wouldn’t happen, we decided to repay the loan in the
hope that this would signal to the congregation that giving and volunteering are
centrally and vitally important to our financial health.
To that end, the Board will be fully engaged in supporting the church’s
fundraising efforts, including this year’s Annual Budget Drive, in every way that
we can. We ask you to continue to do your part to ensure that the spirit of
generosity remains strong and vibrant in our church so that we can move
forward with financial confidence.

Building a Beloved Community
Finally, the Board considered that, if we truly care about our religious
community, we can make the necessary commitments to allow it to thrive. If
other financial crises pop up, we can band together and weather those storms,
too. With a new settled minister in place, and with the wealth of leadership and
creative talents that so many members of our congregation possess, we can
strive to deepen the bonds among current church members while at the same
time growing our membership rolls. But that can only happen when members
feel fully invested in the church.

Moving Forward
Our congregation can be proud that it has stepped up to the plate and enabled our
church to financially weather the pandemic. We kept our staff employed and met all
of our financial obligations. These are amazing accomplishments that we can build
on. It can spur us to continue building the Beloved Community we have been in the
process of realizing for the last two centuries.
If you have questions or concerns, please contact the Board at board@firstunitarian-pgh.org, or contact any Board member. If you use the Breeze Church
Directory, you can find Board members by using the tag “Board of Trustees.”

Respectfully submitted, Trustees
Scott Smith, President
Heather Masterson, Vice President
Eleanor Mayfield, Secretary
Kyle Gracey, Treasurer
Lee Carnes
Julie Downs
Sam Hens-Greco
Lynne Porterfield
Kate Snow