Pink Slips at Nonprofits

Mike Umlandt is Mr. Mom. He didn’t ask for the role, but his wife and three children are doing whatever it takes to make up for his layoff in December from a $50,000 a year job as editorial director of the Luis Palau Evangelistic Association (LPEA) in Portland, Oregon.

Umlandt wants to stay in the Beaverton area and work as a freelance writer so his daughter, April, a sophomore, can finish high school there. “My wife started working, my boys are delivering newspapers, and I am doing the housework. We don’t eat out, and we don’t spend money on anything we don’t absolutely need.”

In addition to laying off employees at its headquarters, the LPEA, an $11.5 million ministry, recently closed its offices in Guatemala and Argentina. Spokesman Kevin Palau said the organization used up its $500,000 reserve fund, cut spending by $1 million, and still lost $100,000 in 2002.

Other prominent ministries are also cutting back, not filling open positions, and laying off workers, according to the Evangelical Council for Financial Accountability. Paul Nelson, ECFA president, told The Gazette of Colorado Springs that donations to many, but not all, Christian organizations are down.

Several ministry officials cited various factors for the decline, including Y2K worries, the recession, an unstable stock market, the September 11 terrorist attacks, fears of future terrorism, and the Iraq War. A recent poll found that 42 percent of Americans said 9/11 disaster relief controversies reduced their faith in nonprofits.

According to The Chronicle of Philanthropy, the percentage of Americans who donated to charity declined from 87 percent in 2001 to 77 percent last year. Private donations to colleges and universities dropped by 2.5 percent in the same period. This was the first decline in 15 years.

Budgets slashed

Among the major cutbacks in key ministries:

Moody Bible Institute in Chicago, facing a budget gap, in February announced a major restructuring of its acclaimed missionary aviation program. It also closed Moody magazine. At the end of March MBI announced another round of layoffs and budget cuts.
Focus on the Family let go 34 people in January. These were the first layoffs in the ministry’s 26 years. Focus, which has employed 1,300 people, has left another 66 open positions unfilled. The ministry also cut this year’s $130 million budget by $5 million after showing a $7 million deficit in fiscal 2002, said Paul Hetrick, vice president of media relations. Giving was down $2.5 million from 2000 to 2001, according to the ECFA. Giving figures were not available for 2002.
Relocating from Minneapolis to Charlotte, the Billy Graham Evangelistic Association plans to drop about 100 positions from its almost 500-member staff, according to Preston Parrish, executive vice president. ECFA reports the BGEA saw a $20 million giving decline, from $107 million to $87 million, from 2000 to 2001. The organization said part of the reason for the decline was the leadership transition from Billy Graham to his son Franklin. Donations were down 1 to 5 percent in 2002, Parrish said. Parrish cited the relocation, a poor economy, the stock market, and an expensive technological upgrade for the ministry as factors pressuring BGEA.
Jews for Jesus laid off 14 of 214 employees. Donations and expenses matched last year, but income trailed the $15 million budget by $3 million in both 2000 and 2001. Part of the reason was an ambitious and costly evangelistic campaign, “Behold Your God.”
World Relief, the development and refugee assistance arm of the National Association of Evangelicals, did not lay off any of its 1,200 employees worldwide because workers are voluntarily cutting back on hours, said Dale Hanson Bourke, former vice president of marketing. Income for 2002 fell about $3 million short of the $39 million budget. Income for 2001 was much higher, at $45.8 million. “Church offerings and business giving were down due to the economy and fear of the future,” Bourke said. In addition, she said, “about half our income is from government grants for the U.S. Refugee Resettlement Program. But the government’s money priorities shifted toward national security and defense, and they cut back on the refugee program.”
World Vision’s budget fell short by $2 million in 2002, said Brian Peterson, communications director. “With increased worldwide crises come increased needs,” Peterson said. World Vision, with 835 paid staff, laid off nine people last year and seven more this year.

Other factors

The sagging economy is not the sole reason donations are down, says Sylvia Ronsvalle, executive vice president of empty tomb, inc., which tracks church giving.

Ronsvalle is the coauthor of The State of Church Giving through 2000, a comprehensive study that begins in 1968. “If giving reflects the economy,” she said, “then why didn’t the study show giving going up when the economy was good?”

The empty tomb study shows that in the year 2000, church members in eight mainline denominations gave an average of 3.2 percent, while church members in eight evangelical denominations gave an average of 4.1 percent. Overall giving among members in twenty-seven denominations was 2.6 percent.

Scott Preissler, president of the Christian Stewardship Association, believes many donations moved elsewhere. “Look at all the money that went to New York City after September 11,” Preissler said. “The Red Cross and Salvation Army were flooded with donations.”