The Magazine of The Evangelical Lutheran Church in America


February 4, 2009

Lutheran social ministry organizations affected by economic downturn

A Lutheran social service agency in Florida is operating on a deficit for the first time in 10 years. A social ministry organization in California reported that many families in the Santa Clarita Valley are sleeping in their cars. In Iowa philanthropy is being hurt, not only by the economic downturn but also by donor fatigue as a result of tornado and flood disaster response work in 2008.

Lutheran health and human service organizations across the country are seeing an increase in the demand for services in the current economic downturn. But government cutbacks are leaving Lutheran social service providers with dwindling resources in which to respond.

"The government is cutting back at the very time human needs are increasing," said Jackie Nelson, Lutheran Social Service of Minnesota (LSS-MN), St. Paul. "Given that many experts believe we are facing the most significant economic challenge since the Great Depression, we expect things to get worse before they get better," she said.

LSS-MN is one of 300 social ministry organizations of the Evangelical Lutheran Church in America and the Lutheran Church-Missouri Synod. These organizations participate in an alliance known as Lutheran Services in America (LSA), which serves more than 6 million people annually in the United States and Caribbean. The aggregated budgets of these organizations total over $10 billion.

According to a Jan. 9 LSA news release, the State of Illinois is also behind in its payments to Lutheran Social Services of Illinois, Des Plaines, and Lutheran Child and Family Services, River Forest, Ill. Despite recent borrowing by the state to pay down some of its outstanding debts, the state currently owes LSSI more than $4 million for services provided under contracts with the state.

"Our concern for these organizations is that their ability to serve people on behalf of the church is going to be compromised," said Ruth A. Reko, director for social ministry organizations, ELCA Church in Society. "We have been so pleased and supportive of strides our (social ministry organizations) have made over the years in reaching out to their communities with valuable services for people who are in need," she said.

Among the greatest need in the next two years will be to meet the demand for families "struggling to keep their heads above water," Nelson said. She said more assistance is needed for families experiencing layoffs and reduced incomes, which make paying bills difficult. The risk to these families is that good solutions, such as housing or financial counseling, may not be readily available, she said.

"When such services are not available, debt settlement scams, credit repair clinics and bankruptcy ads sound appealing for families who are facing desperate financial situations," Nelson said. "These kinds of services often bring even more financial harm."

LSS-MN is the state's largest provider of foreclosure prevention counseling. The number of families requesting such counseling has increased from 3,000 families in 2005 to 18,000 in 2008, according to Nelson.

"This is an extraordinary time," said Mark Peterson, LSS-MN president and CEO. "In Minnesota some public officials fear there could be as much as a 25 percent reduction in publicly-funded service for vulnerable people. It's difficult to overstate the dimensions of the challenge to assure the dignity and safety of our most vulnerable brothers and sisters."

Peterson said that "now is the time, more than ever, for the Lutheran community to stand for the neighbor."

"The Lutheran health and human service organizations that comprise Lutheran Services in America report a range of impacts from the recession," said Jill A. Schumann, LSA president and CEO, Baltimore.

"While a few organizations indicate that they have not yet felt significant effects, and others were struggling prior to the recession," said Schumann, "most report concerns as a direct result of the recession in six main areas: an increased demand for services; decreased, delayed and declined government investment in services; decreased private funding from individuals and foundations; negative impact on volunteer capacity; credit issues, and other factors in the external environment.

Lisa M. Carr, LSA senior director of public policy, Washington, D.C., and others met Jan. 16 with appropriations staff of the U.S. Speaker of the House to discuss what the economic recovery package should contain to secure affordable housing for individuals and families facing homelessness.

LSA requested that the package include $45 billion to create affordable housing and rental opportunities. "Instead, $17 billion has been proposed," said Carr. She said the reason for the lower amount was due to the concern of the appropriations staff that it takes time to produce affordable housing structures.

"They understood that we wanted more money (and) agreed that this isn't really the best bill," Carr said. "We argued back, saying that we could move quickly and that we have architectural plans available. They said that they've advocated for as much as they could, hoping that the $17 billion amount would stay throughout the process and not decrease."

In addition to affordable housing funds, Carr said LSA is advocating that the economic package include:

• A plan for assuring that efficient and effective nonprofit organizations can meet the current increased demand for services

• $2.8 billion for the Social Services Block Grant, designed to meet the increasing demands for health and human services on the local level

• An additional $100 million for the Office of Refugee Resettlement Match Grant Program, designed to help refugees become self-sufficient

• A $24 billion increase in the Supplemental Nutrition Assistance Program

• $100 billion in temporary assistance for states to secure health care services

More: Read "A one-stop center for life change," a feature article about Lutheran Social Service of Minnesota. The article appeared in the December 2008 issue of The Lutheran.

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