By Professor Anthony Rivieccio MBA PFA
When the pandamic first hit in March and Congress was trying to find ways to help “small business,” it created the Paycheck Protection Program, or as we know it, the PPP.
It was designed to give small business assistance by keeping their employees on payroll. Many Democrats and meda pundts quickly denounced it as a “gift” to Majority Leader Mitch McConnell’s Republican friends.
Generally speaking, it was designed as a three-month loan, but if businesses used 70 percent of it for payroll, then the loan would become a grant. In simple terms, FREE government money.
Now I don’t know, maybe it’s me but when I think of a small business I think of a one-person owner with a small staff providing goods and services. Small businesses — not partnerships, not corporations — generate over 60 percent of US economic wealth. Yes, your bodega, grocery store, and diner create tremendous job growth.
So, are world-renowned, not-for-profit arts & cultural institutions small nusiness? Are places like the Bronx Zoo and The Metropolitan Museum of Art eligible for the PPP?
The New York Botanical Garden, which has been closed since March, applied for and was appoved for a $5-$10 million PPP loan in April.
On its application, the NYBG indicated it had 55 employees and total payroll expenses of about $24-$48 million a year.
So let’s do some simple math:
If we assume that the “loan” was for $8 million for three months, based on 55 employees, it comes out to $11,189 per employee, per week. If the Garden used seventy percent for payroll, that would amount to $7,832 per employee per week.
Assuming this was applied on an annual basis, the average employee would presumably earn an annual salary in excess of $407,000. Really?
But even stranger is that these figures don’t jibe with the NYBG’s LinkedIn page which boasts employing over 200 staff members.
According to its 2015 tax filing, their salaries totaled $46 million — and increasing approximately 8 percent a year.
If we applied the same “3-month cycle” as the PPP, those salaries would total $12 million in expenses.
The discrepency begs the question: “Did 55 employees get paid or did 200 get paid?
Let’s assume all 200 staff received equal compensation, then , based on the $8 million dollar loan, then it would have been $2,154 a week. Assuming that would have been a year, then the average staff would have made $112,000 annually.
But the shfting data gets even murkier when you examine the NYBG’s profile in Zippia, an online review site:
“The average employee at New York Botanical Garden makes $38,865 per year, which is competitive for its industry and location. New York Botanical Garden is a medium-sized organization with 450 employees and an annual revenue of $75.0M that is headquartered in New York.”
Fifty-five. Two hundred. Four hundred fifty. Which is it, NYBG?
A Google search reveals even more confusing data:
The New York Botanical Garden Salaries
- Visitor Services Associate salaries – 2 salaries reported $12/hr
- Research Assistant salaries – 2 salaries reported $36,336/yr
- Visitor Services salaries – 2 salaries reported $11/hr
- Manager salaries – 2 salaries reported $64,835/yr
The New York Botanical Garden Director Salaries
The typical The New York Botanical Garden Director salary is $93,058. Director salaries at can range from $87,844 – $100,648 (Oct 22, 2019).
What we do know is what’s on their PPP application: A $5-10 million loan for three months claiming 55 employees. And don’t forget- if the loan is used for payroll, then it is not a loan, it is a grant — or FREE money.
Or maybe to ask a simpler question: Why is a not-for-profit cultural organization with $75 million in annual revenue being defined as a small business? Were they like the nearby stores on Fordham Road that were looted two months ago? Or your local diner or corner grocery store? Or the many mom-and-pop businesses that are now struggling? Maybe the bigger question is: Wasn’t the botanic garden closed when the pandemic struck?
Consider that a three-month $8 million dollar loan could have been a boon to at least forty stores in the Fordham Road business district. A PPP loan would have provided up to $15,340 per week . Too much? Not enough? It surely would have helped to keep people working.
Nevertheless, if you had to make a choice, which would it be. Would you have preferred to save the 200 (or 55) staffers at the NYBG or 200 jobs in the Fordham Road business district?
The PPP program is still open. The Government will reinstitute stringent rules on its next rollout very soon.
If you are or know of a mom-and-pop store needing assistance to stay afloat, please refer them to their financial institution or an advisory firm (including yours truly) NOW! This is one situation where I would strongly encourage the sooner, the better.
I’m a big fan of both, business districts and botanical gardens. No one wants to lose his or her job during a pandemic. But these are just two examples of how the PPP program works — or in my opinion, should not work.
Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.
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