The Knights of Columbus will provide up to a $1 million secured
line of credit per diocese.
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.
Allison Bell, ThinkAdvisor's insurance editor, previously
was LifeHealthPro's health insurance editor. She has a bachelor's degree in
economics from Washington University in St. Louis and a master's degree in
journalism from the Medill School of Journalism at Northwestern University. She
can be reached at abell@alm.com or on Twitter at @Think_Allison.
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