ELCA NEWS SERVICE

February 3, 2009  

Economic Downturn Impacts Lutheran Social Ministry Organizations
09-030-MRC

     CHICAGO (ELCA) -- 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 (ELCA) 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 (LSSI), 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
- - -
     Information about Lutheran social service organizations
is at http://tinyurl.com/cr5lx3 on the ELCA Web site, and
information about Lutheran Services in America is at
http://lutheranservices.org on the Internet.

For information contact:
John Brooks, Director (773) 380-2958 or [log in to unmask]
http://www.elca.org/news
ELCA News Blog: http://www.elca.org/news/blog