Washington, D.C. — The Institute for Policy Studies has agreed to repay a loan received through the Paycheck Protection Program (PPP).
Like millions of other small businesses and non-profit organizations, IPS applied for financial assistance through the PPP to help cover payroll costs during the pandemic. The Small Business Administration approved two loans, one in 2020 and another in 2021, and forgave their full value.
Unlike the first PPP loan program, the second excluded any organization that is "primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents."
IPS does engage in public policy research and has described itself in some public documents as a think tank. But as a non-partisan 501(c)(3) nonprofit organization, IPS is not "primarily engaged in political or lobbying activities."
All 501(c)(3) organizations spend less than 15 percent of their time lobbying — in our case, it's less than 1 percent. We interpreted our status as consistent with the restriction and applied in good faith based on that interpretation.
In its review of the eligibility criteria, the government disagreed that IPS was entitled to the second payment, but nonetheless agreed that it was not appropriate to resolve the dispute under the False Claims Act. Accordingly, in a civil settlement based on contract claims, not fraud, IPS has agreed to repay the 2021 loan and associated lender fees, plus 1.5 percent interest, but with no penalty. IPS fully supports the PPP and efforts to end fraud in the program.
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