Popular nonprofits obtained pandemic aid

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Some 1,100 local nonprofits received federal aid to soften the pandemic’s economic blow, and the list of recipients reads like a who’s who of prominent cultural, medical, religious and educational institutions. 

The Chautauqua Institution and Buffalo Philharmonic Orchestra. Mercy Flight and the Erie County Medical Center. The Diocese of Buffalo and The Chapel at Crosspoint. Nichols School and Nardin Academy.

Even a sovereign state, the Seneca Nation of Indians, received a $1.5 million loan under the federal Paycheck Protection Program.

Nonprofits with religious affiliations received the most number of loans, 406. That’s more than one-third of the 1,080 loans extended to nonprofits. 

But in terms of loan dollars distributed, no one received more than nonprofit health care providers, including medical practices ($33.3 million), hospitals ($30 million) and nursing homes ($19.1 million). By contrast, schools, churches and social services with a religious affiliation received $20.3 million.

Who got what: Search our database of WNY recipients

Nonprofit leaders, much like business operators, told Investigative Post the federal aid was critical. 

Ray Ganoe, CEO at Evergreen Health Services, told Investigative Post that he at first feared the organization, which offers health care services to underserved people, was too large to qualify as a small business. Ganoe said he was glad to make the cut — the loan “saved” the operation.

“This was a lifeline for us,” he said. 

The loan helped the region’s largest arts and education center, as well. The Chautauqua Institution’s summer season and live performances, its lifeblood, were canceled due to the pandemic. Michael Hill, the institution’s president, said the year’s revenue cratered without the expected 100,000 visitors. But it’s not just the institution that was affected, he said.

“These were body blows to our region,” he said. 

Coming up

• Tuesday: Overview of $2.4 billion program.
• Wednesday: Companies receiving the most aid.
• Thursday: Notable nonprofits that received funding.
• Friday: The have-nots, and how to improve on a successor program. 

U.S. Rep. Brian Higgins said the inclusion of nonprofits in the aid program was important, in part because they assist some of the community’s most vulnerable people. However, he said the Investigative Post analysis suggests the program fell short regarding nonprofits.

“We could’ve done better and we should’ve done better,” he said. 

Health care providers obtained most aid

Nationally, $523 billion in loans were disbursed through the Paycheck Protection Program. Funds went primarily to companies and nonprofits with up to 500 employees. Sixty percent of each loan was earmarked to cover 2.5 months payroll; the balance could pay for other operating expenses, including rent. The loans — ranging from up to $10 million to under $1,000 — are forgivable, if spent according to the rules. 

Altogether, 1,081 Western New York nonprofits received $272.5 million. That accounts for 12 percent of the $2.4 billion the eight counties of Western New York received in PPP loans.

Doctors and their medical practices as a group obtained more PPP loans than any industrial sector, $117.2 million, including both for-profit and nonprofit operations. Nineteen nonprofits accounted for $33.3 million of that figure. Among the nonprofit recipients was the oncology unit at Roswell Park Cancer Center, which obtained a $1.6 million loan.

ECMC led the list of nonprofit hospitals that obtained loans. In addition to borrowing $10 million, the hospital also obtained $51.6 million in federal relief funds under the CARES Act. (That money was not included in our analysis.) Six other nonprofit hospitals in the region also obtained loans, including Eastern Niagara in Lockport, Jones Memorial Hospital in Wellsville and Brooks Memorial Hospital in Dunkirk.

The $26.7 million lent to primary and secondary schools ranked second only to health care providers among nonprofit recipients in Western New York. 

Schools receiving loans included parochial high schools such as St. Joseph’s Collegiate Institute and Canisius High School, as well as charter schools, like Tapestry and Elmwood Village. 

Private colleges, which collectively received $5.8 million, included Trocaire, Hilbert and Medaille.

Largest nonprofit recipients by sector

Source: Small Business Administration.

E.J. McMahon, a senior fellow at the Empire Center for Public Policy, an Albany-based research think tank, said the distribution of loans reflect the region’s economic dependence on education and health care. The region’s medical sector alone employs 93,000, according to 2019 federal data.

“It’s enormous, which is what ultimately accounts for the big money there in the nonprofit sector,” he said.

Lending to religious organizations

The loans to 406 religious organizations far outnumbered those given to other types of nonprofits. The sector receiving the second most loans, 48, involves civic and social organizations, such as the Boys and Girls Scouts, the Buffalo Niagara Medical Campus and Habitat for Humanity. 

Altogether, faith-based organizations received $20.3 million. The Chapel at Crosspoint, a Getzville-based megachurch, received the largest loan, $900,000. 

The Diocese of Buffalo received $335,512 after filing for bankruptcy due to civil lawsuits filed by survivors of sexual abuse at the hands of priests. Last month the state Attorney General filed a lawsuit that accuses the church of using its charitable assets to help cover up the crimes.

Two related organizations also received funding: Catholic Charities of Buffalo received $3.7 million and the for-profit Catholic Cemeteries of the Roman Catholic Diocese of Buffalo obtained  $645,305. 

The ZIP code that received the most money for nonprofits — 14203 — covers parts of Allentown and extends south to the waterfront through the downtown center. The City Mission and the Erie County Bar Association’s Aid to Indigent Prisoners Society fall within it, as does the Jacobs Institute and Buffalo Institute for Medical Research. In all, 36 entities received $16.8 million.

Seventeen medical and dental practices associated with the University at Buffalo received loans worth $18.9 million collectively. Most of them send 5 percent of their gross monthly revenue to the university. 

Evergreen used the $5.2 million it received to keep on staff who provide medical and mental health services to at-risk people. The loan preserved its syringe exchange program, the only one in the region, where drug users, diabetics and others can exchange used needles for clean ones, said Ganoe, Evergreen’s CEO.

“If we were not able to be open as frequently, we know that more of them would have died,” he said. 

Largest individual nonprofit recipients

Source: Small Business Administration.

Neighborhood Legal Services received $800,000, which enabled it to retain lawyers who provide assistance to low-income or disabled clients. Among their constituents: the homeless.

“No one else has that level of expertise,” said Deputy Director Penny Selmonsky.

Two nonprofit media outlets obtained loans. WNED, which operates public television and radio stations, received $1,011,000. Investigative Post received $43,778.

Nonprofits with economic clout

Other nonprofits, despite their tax status, are important to the local for-profit economy.

The Erie County Agricultural Society, which manages the annual Erie County Fair, received $600,000. Mike Bolas, the organization’s chief financial officer, said the money was initially used to plan the fair this past summer. Nearly all of it was earmarked for payroll and benefits.

Public health and financial risks led to the cancelation of the fair, the organization’s single-largest revenue generator at $7 million. 

“It was a gut-wrenching decision,” Bolas said.

The cancelation triggered furloughs for 30 of the 45 staff members. Seven have returned to work since. Those still on lay-off had their health insurance coverage extended through the end of the year.

Like the fair, the Chautauqua Institution is a major economic engine for the surrounding area. It’s also one of its county’s largest employers.

When the institution’s summer season was canceled, projected annual revenues dropped from $34 million to $1.7 million and 1,300 seasonal employees weren’t hired, said Hill, the organization’s president.

The $3.3 million PPP loan was “instrumental” in supporting the remaining 120 employees, Hill said. They built the digital infrastructure that enabled the institution to present virtual events.But the institution still had to spend 80 percent of its reserve funds to survive.

“We understood the ripple effect that might occur if there were large layoffs at the institution,” Hill said. “You can feel and see those things in rural areas sometimes more than you can in urban areas.” 

“There’s a compounding impact of us not being open.”

Phil Gambini