Financial Crisis Will Shape Long-Term Religious Ethos


A deeper and prolonged financial crisis will likely result in a survival-of-the-fittest scenario among local and national faith organizations, which, in turn, will reshape the religious ethos for years to come.

Local media reports suggest an anxious Salvation Army—one facing fewer gifts and greater demands for services in a halting economy in which the financial markets have bludgeoned personal wealth and battered institutional reserve funds.

National media reports about high-profile Christian organizations also offer bad news about budget deficits, staff layoffs and sharply reduced 2009 budgets.

Focus on the Family announced plans to lay off 149 staff members and leave vacant another 53 positions. Including October layoffs, staff size dropped from 1,200 last year to 950.

Founded by Christian Right leader James Dobson, the Colorado-based organization's 2008 fiscal year budget was $160 million, compared to its 2009 budget of $138 million.

At the other end of the theological spectrum, the Washington National Cathedral disclosed plans to cut its 2009 budget from $24 million to $14.4 million, a 40 percent reduction, and to lay off more than 40 staff members.

That announcement came after the Episcopal cathedral cut $3.5 million from its 2008 budget in May and dismissed 33 employees.

The cathedral's endowment of $66 million reportedly lost 25 percent of its value.

To balance its 2009-10 budget, the Presbyterian Church (U.S.A.) reported that it drew some $7 million from its reserve fund of over $21 million. By the time the denomination met in the fall, its reserve fund had dropped even more, making the prospects of future funding from reserves a significant challenge.

Before the fall meetings of the Southern Baptist Convention's state affiliates, the Florida Baptist Convention reported that giving was behind by $773,000 and projected up to a $2 million shortfall by the end of the year. The FBC said it would reduce personnel and programming costs.

In November, a number of SBC state affiliates adopted smaller 2009 budgets and announced cost-saving measures.

The largest such body, the Baptist General Convention of Texas, approved a budget for 2009 that was 8 percent smaller than the 2008 budget.

The Baptist Convention of Maryland/Delaware adopted a 2009 budget which was almost $1 million smaller than the previous fiscal year. Officials announced staff eliminations, account freezes and no salary increases.

The Georgia Baptist Convention accepted a 2009 budget at least $2 million smaller than the previous year, while the Baptist State Convention of North Carolina cut almost $4 million from its budget.

Facing a half-million-dollar shortfall in 2008, the Baptist General Association of Virginia adopted a budget of $13.8 million for fiscal year 2009, which was $560,000 less than the previous year.

Not all Baptist state conventions reported budget deficits and reduced future budgets, however. In fact, some increased their budgets, although none came close to matching the Southern Baptists of Texas Convention, which increased its 2009 budget by a whopping 14 percent over its 2008 budget.

The California Southern Baptist Convention increased its 2009 fiscal year budget by 4.73 percent, compared to the Alabama Baptist Convention, which adopted a budget that was 3.17 percent larger than last year.

Baptist state conventions in Arkansas, Kentucky, Louisiana and Oklahoma also increased next year's budgets.

One ray of hope for Mainline Protestants was the Episcopal Church, which reported an expected budget deficit of $2.5 million for its 2007-2009 budget, but said that 2007 and 2008 surpluses could result in a balanced budget.

The Episcopal Church endowment fund was reportedly down 30 percent.

The nation's financial crisis cuts across theological ranks, creating a patchwork of reports, most of which are troubling to terrible. Even those bodies that have increased their 2009 budgets have no guarantees that they will meet their paper pledges. Many depend on a mix of church gifts and endowments.

Given the lag time between the receipt of gifts in churches and churches sending those gifts to partner organizations, the financial picture for denominational and religious non-profits may actually be much worse than what is currently reported.

A deeper and prolonged financial crisis will likely result in a survival-of-the-fittest scenario among local and national faith organizations, which, in turn, will reshape the religious ethos for years to come.

Robert Parham is executive director of the Baptist Center for Ethics.

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