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Taxpayer Subsidized PPP Funds Went to Charities with Failing Grades

   May 25, 2022

The Paycheck Protection Program (PPP) was a lifeline for so many charities that otherwise may not have had the ability to sustain themselves through the financial hardships brought on by the COVID-19 pandemic. Unfortunately, the public may have been better served had some of these charities been allowed to fail. While first and second draw PPP loans, many of which were later forgiven and converted into grants, required charities to meet certain requirements for financial need and projected qualified expenses, the financial efficiency with which charities operate was not a qualifying eligibility factor for PPP funding approval. What this means is that many highly inefficient charities with histories of very low program spending and "F" ratings from CharityWatch received taxpayer subsidized PPP funds that could have been better utilized by other, much more efficient nonprofits. 

PPP funding was distributed in two, separate rounds, each with their own eligibility requirements. To qualify for first round funding, a charity had to meet basic criteria such as being in operation since at least February 15, 2020, having 500 or fewer employees, and attesting that it would incur qualified expenses for payroll, rent or mortgage, utilities, and other expenses eligible under the PPP. Qualifying for second round funding was more difficult, namely because charities were required to meet additional criteria such as demonstrating financial need by providing evidence of revenue declines in the current accounting period relative to the same accounting period the prior year.

The amounts of first and second round funding each charity received were largely based on the amount of qualified expenses it substantiated in its PPP application(s); i.e., a charity that could substantiate a higher amount of qualified expenses would be eligible to receive more PPP funding than a charity that could substantiate a lower amount.

Nonprofits Currently Rated "F" by CharityWatch that Received PPP Funding*
 1st Round  2nd Round TotalRating Based
CharityRating Funding  Funding PPP Fundingon Fiscal Year 
Planet AidF $         2,665,700 $  2,000,000 $        4,665,70012/31/2020
AMVETS National Service FoundationF $         1,691,342 $  1,691,342 $        3,382,6848/31/2018
Vietnam Veterans of AmericaF $              695,482 $      681,918 $        1,377,4002/28/2019
Salesian MissionsF $              916,600--- $            916,60012/31/2020
Help Heal VeteransF $              468,302 $      359,550 $            827,8527/31/2020
International Union Of Police Associations AFL-CIOF $              356,060           --- $            356,0603/31/2020
United Breast Cancer FoundationF $              107,836 $      139,330 $            247,16612/31/2020
Heritage For The BlindF $              120,000 $         50,000 $            170,00012/31/2019
Disabled Veterans National FoundationF $              169,600--- $            169,60012/31/2019
Operation Finally HomeF $              168,460--- $            168,46012/31/2020
The Gaia Movement Living Earth Green World ActionF $                 83,400 $         83,400 $            166,80012/31/2018
Kids Wish NetworkF $              160,900--- $            160,9005/31/2020
SPCA InternationalF $              112,500--- $            112,50012/31/2019
Cancer Recovery Foundation InternationalF $                 55,140 $         55,140 $            110,28012/31/2020
Childhood Leukemia FoundationF $                 69,870--- $               69,87012/31/2020
Dakota Indian FoundationF $                 31,779 $         34,814 $               66,5936/30/2021
Firefighters Charitable FoundationF $                 61,750--- $               61,75012/31/2020
National Cancer CenterF $                 30,392 $         29,091 $               59,4833/31/2020
United American PatriotsF $                 53,212--- $               53,21212/31/2019
California Police Youth Charities F $                 19,000 $         23,279 $               42,27912/31/2018
Dreamchaser PMU Rescue & Rehabilitation F $                 18,625 $         20,780 $               39,40512/31/2019
United Cancer Support FoundationF $                 36,400--- $               36,40012/31/2020
National Cancer Assistance FoundationF $                 31,920--- $               31,92012/31/2020
Autism Spectrum Disorder FoundationF $                 11,655--- $               11,65512/31/2020
Defeat Diabetes FoundationF $                 10,390--- $               10,39012/31/2020
Veterans Relief NetworkF $                    9,208--- $                  9,20812/31/2019

*NOTE: This chart represents a sampling of nonprofits that meet the following criteria: (1) received PPP funding and (2) are currently assigned an "F" rating by CharityWatch due to financial inefficiency. Data was compiled using each nonprofit's audited financial statements and/or ProPublica's "Tracking PPP" database. "F" ratings are based on CharityWatch's analysis as of May 16, 2022. Due to the timing of when updated financial data becomes available and the time-intensive nature of CharityWatch's in-depth analyses, this chart is not a comprehensive accounting of all such nonprofits that received PPP funding. More comprehensive data can be found on the ProPublica website and in the Analysts' Notes section of the charity rating profile pages of each charity on charitywatch.org.

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