This whitepaper examines some of the reasons why nonprofit organizations in California that are animated by Catholic values and/or formed to engage in apostolic endeavors should consider incorporating as Nonprofit Religious Corporations, even if such organizations are not directly tied to the hierarchy or a religious order. Before determining the appropriate form of corporation for your organization, you should consult with an attorney who is licensed in California and familiar with nonprofit corporate law.

The loan forgiveness opportunity included in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Paycheck Protection Program (“PPP”) loan is perhaps the program’s greatest feature. Indeed, many nonprofits and for-profit small businesses that might otherwise have shut down were able to stay in business because of this financial relief. In June 2020, the PPP Flexibility Act further adjusted the terms of the PPP to the benefit of borrowers, expanding the availability of loan forgiveness.

Increasingly, the daily headlines feature allegations of misconduct by the leaders of churches and religious tax-exempt organizations. [2] Typical stories describe an insider’s use of the tax-exempt organizations’ assets, such as a private plane, funds, or business opportunities, for the benefit of the insider or a favored person. Even if misconduct allegations are later shown to be unfounded, such stories can permanently harm an organization and, perhaps worse, the people it serves. Trustworthiness in fact and appearance is critical for religious organizations, especially if they are donor funded.