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Aspen Institute

Aspen Institute to return $8M small business loan after uproar – POLITICO

Congress appropriated the PPP to help fight layoffs during the Covid-19 pandemic. | Andrew Harnik, File/AP Photo

The Aspen Institute think tank on Thursday said it will return an $8 million loan it received through an emergency small business rescue program, the latest major organization to relinquish the aid following a public backlash.

The Washington-based nonprofit — which disclosed having a $115 million endowment in 2018 — said it planned to return the government-backed loan after talking with “our stakeholders.” The group in recent days faced criticism for accepting the money, which Congress appropriated to help fight layoffs during the Covid-19 pandemic.

The Paycheck Protection Program loans can be forgiven if businesses maintain their payrolls. That has made the program wildly popular, with 75 percent of the country’s small businesses having sought the loans, said the Census Bureau Thursday.

The Aspen Institute had previously defended taking the loan, saying it was hit hard by pandemic-related shutdowns because a significant portion of its revenue comes from in-person events. It projected a $14 to $17 million loss. But the think tank became the target of scrutiny that earlier forced companies such as Shake Shack and Ruth’s Hospitality Group to return Paycheck Protection Program loans they received.

“We believe that our application, which was made in the first week of the PPP, was consistent with the goals of the program,” said the institute in a statement Thursday. “Upon listening to our communities and further reflection, we have made the decision to return the loan.”

The announcement illustrated public concern about the implementation about the small business aid program, which Congress is preparing to revamp.

Reflecting worries about loan money going to well-financed elites, House Democrats on Thursday unveiled plans to limit the aid from lining the pockets of political insiders.

As part of a $3 trillion economic relief package the House will vote on Friday — a bill that would expand Paycheck Protection Program access to all nonprofits including business trade associations — Democrats announced an amendment that would prohibit lobbyist compensation from counting as payroll costs when an organization seeks a loan. The amendment would also impose restrictions on nonprofits applying for the loans if they engage in political activities.

New government data released on Thursday underscored the vast demand for the program, which Congress has funded with about $670 billion since its creation in March.

According to a U.S. Census Bureau survey, 74.9 percent of small businesses sought assistance under the Paycheck Protection Program and 38.1 percent received it. The survey, which collected data between April 26 and May 2, targeted businesses with fewer than 500 employees.