Economy forces churches to scale back

When the stock market soared, the worldwide network of United Methodist missionaries thought big.

About $3 million was to go for a hospital in Kazakstan. Another $2 million was budgeted for land mine removal, and money was also earmarked for helping U.S. convicts rebuild their lives. Then the market tumbled, and with it went the bounty from the missionary division's investments. The group has lost about $21 million in 2001, forcing administrators to lay off 45 employees.

"Next year will be one of the worst," said Randolph Nugent, who manages the agency, called the Board of Global Ministries.

Other denominations also are feeling squeezed by the recession these days. Money for good works, once plentiful in the 1990s, has been drying up.

Adding to the churches' woes are a steep increase in health insurance costs and a post-Sept. 11 drop in contributions, as the faithful have redirected their giving to victims of the terrorist attacks.

In Boston, that means the Roman Catholic archdiocese is scaling back some programs, though it won't say which ones. Both Boston and the Erie, Pa., diocese have imposed hiring freezes.

The Presbyterian Church (U.S.A) expects a deficit of about $2.5 million in its $136 million budget next year.

Gay clergy issue

Beyond the recession, that denomination is losing money because of a fierce debate over whether to repeal a ban on gay clergy. Some conservative congregations are withholding payments to headquarters while the issue remains unresolved, though no numbers have been released.

Brad Hewitt, chief administrative officer of the Lutheran Church-Missouri Synod, among the few faiths not facing losses, met last week with financial administrators from other large, Christian denominations.

"I would describe the mood as concerned, not alarmed -- more of a wait- and-see attitude," Hewitt said. "Although, I would say that a few of them, if their numbers were as bad as they sounded, would have to take some layoffs."

The Presbyterians, to address their shortfall, plan to cut up to 15 jobs and reduce administrative expenses, said Joey Bailey, the denomination's chief financial officer. A Presbyterian foundation that manages denominational assets has already eliminated 20 positions due to losses in the stock market.

In Erie, the troubles for Catholic Bishop Donald Troutman began more than a year ago, when factories started shutting down in his blue-collar city. About 3,000 jobs will be gone by next year.

Some of the unemployed have moved away, leaving collection plates a little lighter on Sundays. At the same time, health insurance costs for the diocese's 109 employees rose by 14 percent, and the interest income Troutman had been using to cover some expenses evaporated when the stock market fell.

"What we've tried to do is not have any new programs and that's hurt us because we see a need for new programs," Troutman said. "There are no layoffs at this point. We're hoping not to do that, especially around Christmas."

Competition for money after the attacks has also hurt the bottom line of some denominations. The Greek Orthodox Church saw giving to its national office dip dramatically after Sept. 11, while donations to its social service ministries rose.

"It seems a lot of parishioners are donating to our relief funds rather than sending us their obligated payments they have to make on a monthly basis," said John Barbagallo, the denomination's finance director.

Not all hurting

Not all denominations are suffering. The Evangelical Lutheran Church in America saw income rise through Sept. 30, compared with the same period last year, but that was mainly due to bequests and large gifts.

For Nugent, who oversees more than 2,500 missionaries, the last several weeks have been a painful dismantling of projects for the desperately needy.

Nugent has tried to make the biggest cuts in administrative expenses, thereby preserving aid programs, but he still has had to shift money away from projects like land mine removal, hospital building and prison ministries.