| | | Elite D.C. School, Sidwell Friends, Takes $5.2 Million Small Business Loan
PART OF CORONAVIRUS IN THE D.C. REGION
 Debbie Truong
Sidwell Friends, a vaunted private school, has campuses in Bethesda, Md. and Northwest Washington (pictured above).
Debbie Truong / WAMU
Sidwell Friends School, the exclusive D.C. private school, accepted a $5.2 million loan from the federal government through a program intended to help small businesses and nonprofits stay afloat during the coronavirus pandemic.
In a letter to families and alumni Wednesday, the school’s Board of Trustees said it applied for the Paycheck Protection Program to avoid layoffs and furloughs.
“The Board determined that accepting the loan was appropriate and fully consistent with its fiduciary responsibilities, as well as our Quaker values,” the letter said. “We need to protect people — teachers and staff members — who provide the foundation for our community.”
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Some Sidwell alumni quickly denounced the decision, saying the money should go toward struggling shopkeepers. They argued the school, which has campuses in Northwest Washington and Bethesda, Md., should draw from its $53.4 million endowment or apply for other loans.
Niki Afsar, a 2011 graduate, said she felt accepting the money conflicts with values the school espouses, such as equality and community.
“I just found that to be extremely hypocritical,” Afsar said.
The small business loan program was established through the federal CARES Act, a $2 trillion relief package approved by Congress in March. The Paycheck Protection Program was primarily designed for small businesses with fewer than 500 employees. Non-profit organizations are also eligible.
Loans qualify for forgiveness if 75% of the money is spent on payroll. The rest may go toward rent, mortgage interest or utilities. The first pot of $349 billion in loans was depleted in less than two weeks, spurring officials to make available another $311 billion.
Large companies that employ fewer than 50 workers in a single location, such as Shake Shack and the parent company of Ruth’s Chris Steakhouse, were sharply criticized for accepting the money. Shake Shack eventually returned its $10 million loan.
Some elite colleges and universities with large endowments, including Harvard University, have also turned down federal relief money.
In the letter to families, Sidwell board members said the K-12 school will use the loan to keep workers employed and pay for health insurance. The school expects to take a financial hit from lost tuition, fundraising and program fees.
“We recognize that our decision to accept this loan may draw criticism from some quarters of the community but are fully united in our decision,” the letter said.
Randa Tawil, who graduated from the school in 2005, said many small businesses could use the money more than Sidwell, where tuition runs upward of $44,000 a year.
She said the school should seek alternatives, such as money from its endowment.
“These are millionaires who are getting money to subsidize the workers who are teaching their children, in order for their children to get into elite institutions, in order for them to become millionaires,” Tawil said. “This is a place that reproduces an elite class of people in this country.”
A spokeswoman for the school, Hellen Hom-Diamond, said most of Sidwell’s endowment cannot be spent on salaries and other operating costs. She added the school can only draw 4.5% from its endowment each year.
Hom-Diamond said the school stopped filling non-teaching positions and that more families are seeking financial support. The school learned it received the loan on April 14, about a week after it applied.
Still, Sarah Remes, another alum, said it was inappropriate “for an institution as rich and as well-connected as Sidwell to take money from a pot meant for small businesses.”
Remes, who graduated from Sidwell in 1995, sits on the board of the School Justice Project, a non-profit that provides legal services to students with disabilities who are incarcerated.
She said the School Justice Project is spending more money during the pandemic on technology for students, including paying for students’ cell phone plans after they are released from incarceration. The organization is also buying tablets so students can participate in distance learning while the coronavirus keeps campuses closed.
Remes said the organization applied for a loan through the Paycheck Protection Program in the first round of funding but was told the money ran out. They are awaiting a response for the second round of federal loans.
“Every penny Sidwell gets,” she said, “is a penny that another organization that doesn’t have Sidwell’s resources is not getting.” |
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