The Foundation for the Carolinas has received a $2.3 million loan from the federal Paycheck Protection Program, money its CEO says will help avert layoffs as revenues fall.
The idea behind the PPP is to keep workers employed during business shutdowns due to the coronavirus pandemic. Foundations, arts and religious groups and other nonprofits are eligible, in addition to small businesses.
The Charlotte-based foundation manages $2.3 billion in charitable funds for wealthy people and nonprofits. But it's basically a small business. It has 135 employees and an annual budget around $16 million.
A spokeswoman for the foundation said nobody was available for an interview. But in a statement, CEO Michael Marsicano says the money will go for payroll, utilities and other operating expenses.
So why is it needed? In two words: lost revenue.
The foundation charges fees based on the market value of the 3,000 funds it manages, but U.S. market indexes are down 10-15% this year. And as those funds decline in value, so do the foundation's fees. Marsicano also says it's losing money from rentals of its event spaces and other other revenue sources.
Marsicano says the money will help avoid layoffs. During the Great Recession in 2008, the foundation laid off 10% of its staff.
SBA will forgive loans if employees stay on the payroll eight weeks. If lost revenues aren't as bad as expected, Marsicano says the foundation will pay back part of the loan.
Meanwhile, the foundation is busier than ever helping clients make grants from all those funds, many to help with COVID-19 related needs. In four months of 2020, they've handed out 33,000 grants -- more than they've ever made in any full year.
"This already far exceeds our record full year of grantmaking, which was 27,000 in 2017," Marsicano said. "Many team members are also involved with fundraising and grantmaking for COVID-19 Response Funds established throughout the 13-county region we serve. These efforts provide critical support to nonprofits on the front lines of serving those affected by the pandemic."
Other nonprofits and arts groups around the region have also gotten PPP loans, including WFAE, which received $617,392 for payroll, rent, and utilities. The station has 44 employees.
Blumenthal Performing Arts got about $1.7 million in the second round of PPP funding. “The money allowed us to avoid layoffs and furloughs since performances are suspended through July 7,” said CEO Tom Gabbard.
Another is the Arts & Science Council of Charlotte. It's using $610,300 in federal money to support its payroll. Leaders there also have taken pay cuts ranging from 10%-50%, according to a spokeswoman.
According to a report in the Charlotte Observer, The Foundation for the Carolinas' Marsicano had a 2018 total compenstation of $843,589, and he said the foundation's board has not asked him to take a pay cut.
Editor's Note: This story has been updated to reflect that WFAE also received a PPP loan.
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