Homeless service providers receive millions in PPP loans
As the rest of D.C. was shutting down amid rising cases of the coronavirus this spring, at least 14 homeless service providers and community organizations received support from the Paycheck Protection Program, a relief measure designed to help cover payroll costs and keep workers employed during the pandemic.
[Disclosure: Street Sense Media received funds from the Paycheck Protection Program]
The organizations, which provide the District’s most vulnerable residents with critical services spanning case management, free meals, medical clinics and matches to housing programs, received millions in PPP loans guaranteed by the Small Business Administration, according to data released on July 6. Multiple organizations that returned requests for comment said they used the loans to cover payroll costs and other operating expenses like utilities.
Catholic Charities, which offers a whole host of services in addition to operating low-barrier shelters across the city, received a loan between $2 million and $5 million and was able to retain a total of 439 jobs, according to the data. Among those jobs were more than 100 employees who were brought back from furlough, a spokesperson wrote in an email.
“The ability to have staff working allowed the agency to keep most of our almost 60 programs open, including medical clinics and mental health services, and to expand food programs to meet an unprecedented demand for food,” the spokesperson said. Since March, Catholic Charities has served more than 500,000 meals through its expanded food programs.
[Read more: Catholic Charities also tasked one of its programs with helping homeless clients claim their stimulus checks]
Bread for the City had to make extensive changes to its services due to the public health emergency, according to Kristen Kozlowski, the associate director of development. The nonprofit provides meals, clothing, health care and social and legal services.
Instead of distributing groceries at its two food pantries, the organization is now delivering them to residents at their homes, Kozlowski said. The medical clinic remains open but is only offering COVID-19 testing and urgent care. Primary care and behavioral health visits have been shifted to telehealth appointments. And most legal and social services are being offered remotely.
Kozlowski said the organization applied for its loan, which was for between $1 million and $2 million, in April and received approval within a week. The loan allowed Bread for the City to retain all of its 108 employees and was used for payroll and utilities. In addition to the PPP loan, the organization has also applied for federal and local grant funding and has “actively fundraised” from private foundations and individual donors, Kozlowski said.
[Read more: DC service organizations to stay open amid coronavirus-related closures]
Since the application process opened in April, lenders have approved more than 4.9 million PPP loans totaling $518 billion in relief, with the average loan amount being $105,000. Under the SBA’s guidelines, recipients can apply to have their loans fully forgiven as long as they meet certain criteria, including using at least 60% of the loan to cover payroll costs.
But the process to apply for loan forgiveness has been confusing and time-consuming for both lenders and recipients. As of now, Bread for the City, which intends to apply for loan forgiveness, still has not received “clear guidance” on the application process, timeline and audit, Kozlowski said.
A new Senate bill introduced by Sen. Kevin Cramer (R-ND) last month would automatically forgive PPP loans that don’t exceed $150,000 after recipients submit a one-page form. During a congressional hearing on Friday, Treasury Secretary Steven Mnuchin endorsed the idea of automatic forgiveness for loans under a certain amount, but did not specify what the threshold should be.
N Street Village, another service provider, which offers meals and health care and is contracted by the city to operate permanent supportive housing and shelter housing, received a loan between $350,000 and $1 million. According to CEO Schroeder Stribling, the organization applied for its loan on April 21 and received the funds within 10 days.
The loan was used entirely for payroll costs, and allowed N Street Village to retain 101 employees. They’ve added a few additional employees since applying for the loan, Stribling said in an email. In addition to the PPP loan, the organization also received $30,000 in general operating grant funding from Wells Fargo early on during the pandemic.
“We are grateful that these funds were made available so quickly,” Stribling said, referring to the PPP loan. “They are absolutely necessary for the ability of N Street Village and other frontline organizations addressing homelessness in DC to continue with our mission. And we are glad that the program is being updated to address issues that became apparent during execution.”
[Read more: Despite COVID-19 closures, restaurants and other nontraditional sources are feeding people in need]
Stribling said that while N Street Village has avoided curtailing any of its services, there have been some changes to its operations. Day services have been moved to Patricia Handy Place for Women, a women’s shelter in Chinatown, and case management has been conducted virtually — a change that may be preferable and worth making permanent.
“Tele-case management turns out to be working better — and at least as well — for some of our residents,” Stribling said. “Speaking to a FaceTime Case Manager over the phone in your apartment can feel less intrusive than the actual person in your apartment to some of our residents — especially those with a trauma history.”
As the District proceeds with phased reopening, currently in Phase Two, N Street Village is “in a position of strength,” having recently diversified its revenue and undergone a financial restructuring. But in the long-term, there remains “significant uncertainty due to the potential impact of a sustained economic recession on private donations and government contract revenue,” Stribling added.
In the meantime, Stribling said N Street Village is focused on continuing its services unimpeded for its current clients while preparing for a greater demand in the coming months. “Those already on the margins will be further destabilized and there will be more need – at least in the short-term – for our services.”