A Catholic fraternal benefit society is trying to use its financial muscle to help pull U.S. Catholic dioceses through the economic turmoil caused by the COVID-19 pandemic.
The Knights of Columbus announced earlier this week that it has established a $100 million short-term financing fund for the dioceses.
The New Haven, Connecticut-based organization said it will provide a secured line of credit for up to $1 million per Catholic diocese.
The program will start Monday and be open for 60 days, the Knights of Columbus said.
In the Catholic church, a typical diocese is a territory that comes under the supervision of a bishop. The United States has 145 territorial dioceses, according to the U.S. Conference of Catholic Bishops.
In many parts of the United States, governors and mayors have shut down schools, banned public religious services, and encouraged or required many workers to stay at home, in an effort to slow the spread of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes COVID-19 pneumonia and other COVID-19-related conditions, such as inflammation of the heart and in inflammation of the kidneys.
The “shelter in place” orders have sharply reduced the revenue parish churches get from parish schools or from passing the collection plate at Sunday services.
The Knights of Columbus generates about $2 billion in annual revenue from selling products such as life insurance, disability insurance and long-term care insurance.
Carl Anderson, the chief executive officer of the Knights of Columbus, said in a statement about the new line-of-credit program that it’s critical for the organization to support the Catholic Church in the United States at this time, so that the church can keep its staff on the payroll, and continue to do spiritual and charitable work.
“Our fund is designed specifically to help dioceses and their parishes weather this pandemic financially,” Anderson said.
The lines of credit provided will have a two-year term.
The interest rate will be 2.25% percentage points higher than the one-year Treasury bill rate.
At the end of the original two-year term, a diocese that uses a line of credit will be able to convert the line of credit into a Knights of Columbus church loan. The interest rate will be the same as the rate for a loan made through the Knights of Columbus ChurchLoan program.
“The Knights of Columbus has been a key lender to parishes and dioceses for more than a century, and the ChurchLoan program remains a key source of financing for Catholic parishes and institutions,” the Knights of Columbus said.
The Knights of Columbus is also encouraging members to help people in need with food and other essentials, and to participate in blood drives.
— Read Fraternals Want Congress to Speak Up for IRC Section 501(c)(8), on ThinkAdvisor.