Click here to view the original June 19, 2009 story.

SAUL GONZALEZ: At the recent Worship Facilities Conference and Expo held in Long Beach, California, the business of marketing to places of worship was on full display. At this twice-a-year national convention, companies try to sell their products and services to churches and religious institutions.

UNIDENTIFIED SALES REPRESENTATIVE #1 (speaking to conference attendee): Maybe two cameras to cover the minister and the choir?

GONZALEZ: Their wares range from sophisticated video production gear to pews for churches and synagogues.

UNIDENTIFIED SALES REPRESENTATIVE #2: This is the Cadillac. This is our theater seat, a completely wooden theater seat.

GONZALEZ: Banks and credit unions that specialize in lending and financial consulting to houses of worship also attended.

UNIDENTIFIED BANK SALES REPRESENTATIVE (speaking to conference attendee): We don’t necessarily go by loan to value. We’re looking at cash flow.

GONZALEZ: Although there was plenty of hustle and bustle on the convention floor this year, the recession cast a pall over this expo.

STEVE KROH (Architect): In 25 years, it’s never hit us this hard before.

GONZALEZ: Steve Kroh is an architect whose firm specializes in church design. With congregations cutting back on expansion and new construction plans, Kroh is seeing his business plummet.

Mr. KROH: We’re not having to lay off a lot of people yet, but we’re cutting back on hours and just trying to hang in there right now. We are taking a lot smaller projects than we used to just to keep everybody busy.

ERIC KNOWLES (Founder and CEO, Church Brokers, San Diego, CA): The recession is hitting everybody, and it’s affecting churches just as much as it is the mom and pop homeowner.

GONZALEZ: Eric Knowles is the founder and CEO of Church Brokers, a San Diego firm that specializes in church real estate and financing.

Mr. KNOWLES: Right now, most of the churches we’ve been working with, probably the past year or least, they are all pulling the reins in. They’re not spending anything outside of the hard fast debt they have to pay. Salaries are getting cut back. People are getting let go. A lot of churches are letting their staff go or reducing their pay, going to part time. So it’s a challenging time for churches right now.

GONZALEZ: One house of worship struggling to keep its doors open in the down economy is Long Beach’s Immanuel Church, which is part of the United Church of Christ.

Reverend JANE STORMONT GALLOWAY (Pastor, Immanuel Church, Long Beach, CA): Foreclosure is a possibility and something that we are concerned about.

GONZALEZ: And to those out there who think of churches as being foreclosure-proof?

Rev. GALLOWAY: Oh, no. Forget it.

GONZALEZ: With revenues down, Reverend Jane Galloway’s church is struggling to pay off a more than $850,000 mortgage and loans used to pay for repairs of this more than 80-year-old building.

Rev. GALLOWAY (speaking at meeting): Talking with the mortgage — our mortgage broker. . .

GONZALEZ: To stay afloat the church has cut expenses, and Reverend Galloway has volunteered to slash most of her own pay. But despite the belt tightening, every bill that arrives brings a new challenge.

Rev. GALLOWAY: I mean we’re literally at a point where my husband walked in the other day and said this was on the side door, and it was a turn-off notice for the utilities. Now we are at a scary moment, and we know that each month, if we are unable to make our mortgage payment on time, we could be — the default process can be filed and a foreclosure proceeding could begin.

GONZALEZ: Although no single, hard number exists, banks and credit unions that lend to houses of worship report a steady increase in church bankruptcies and foreclosures. One of them is this 1,000-seat church north of San Diego. Built just in 2005, it closed last year after the church defaulted on loans. Even wealthy and powerful megachurches, such as southern California’s Crystal Cathedral, have had to cut staff and put millions of dollars worth of property up for sale to help pay off debts. Whether they’re big or small, many churches’ money troubles stem from s steady decline in giving. According to the Christian research company the Barna Group, American churches got between $3 and $5 billion less in donations than they expected to receive during the last quarter of 2008. That’s about a four to six percent decline.

Reverend PHIL HERRINGTON (Pastor, Pathways Community Church, Santee, CA, addressing congregation: I thank you to so many of you who have given faithfully using this envelope. It really helps us pay the bills and do what we do as a ministry — in helping people and loving God and loving people.

GONZALEZ: Phil Herrington is pastor of Pathways Community Church in Santee, California.

Rev. HARRINGTON: We have a number of people in our church right now that are unemployed, that have lost jobs. People who used to be significant donors in the church have just flat out lost their income. Maybe they can give in a smaller way, but that affects our overall income.

GONZALEZ: In response, Pathways has had to cut staff and fill more positions with volunteers. Houses of worship that face foreclosure and other financial troubles often get into their predicaments for the same reasons that homeowners and consumers do: borrowing and spending too much money when times are good and not being prepared when the economy goes from boom to bust.

Mr. KNOWLES: You know, churches are no different than, literally, business owners or homeowners. We all believed that everything was going continue to appreciate, that there was no turning of the curve, and so everybody was overleveraging, and churches are no different. They were not exempt.

GONZALEZ: Real estate broker Eric Knowles, a devout evangelical Christian, says churches’ financial problems are sometimes made worse by leaders who are unable to face harsh economic realities.

Mr. KNOWLES: There’s that faith, you know, that often we think that the Lord is directing us to go do something. Well, how do you refute that when I deal with a pastor that says that the Lord is calling me to buy this building? And I have many situations where it will not pencil. We run our analysis and we get real involved and detailed. But then the pastors continue to say, well, I believe God is directing me for this. Goodness. So what do you do? What do you do? We give the best counsel we can. We give it to them pragmatically, you know, documented in writing that this is where you are going to be, and often time the pastor will look me in the face and say, well, you know what? I understand what you are saying. I understand by earthly standards this will not work, but God has called me to do it. And that’s the trump card. What do you do? You’re just kind of like, okay.

GONZALEZ: In both good economic times and bad, some churches are supplementing what goes into collection baskets by finding new and creative ways to raise income. For instance, with assistance from investors Pathways Community Church purchased this once dilapidated shopping mall. The church occupies the space that was once a supermarket but rents out the rest of the center to other businesses. The revenue earned helps the church pay operating expenses and mortgage payments that total over $21,000 a month.

Rev. HARRINGTON: Right now it’s helping us survive. If we didn’t have that right now we would have to massively downsize staff and personnel and do a lot less ministry out in the community than we are doing right now. So it has opened up a lot of doors for us.

Rev. GALLOWAY (speaking at meeting): I think it could be shared space, perhaps like a collective office space . . .

GONZALEZ: But as they try to guide their churches through turbulent economic times, the strain is taking a visible toll on some religious leaders such as Reverend Galloway.

Rev. GALLOWAY: I really want this to work, and I feel a sense of responsibility. I’ll let myself be this vulnerable because you are asking me this. I feel a sense of responsibility to the people I am here for. People come here with broken hearts. People come here looking for food — looking for spiritual food, and I hear the kind of despair they are in, and I realize that it’s crazy for me to be this preoccupied with the finances of some place, when I’m here to create a place where people can come and find solace. So I feel a sense of responsibility to the people who come here for that kind of nurturance.

UNIDENTIFIED SALES REPRESENTATIVE #3: We’ve developed what we call our McDonald’s approach to church design. It’s our “church in a box.”

GONZALEZ: At the expo, those attending hoped the recession would soon end, allowing houses of worship to focus not on their money problems, but on their ministries.

For RELIGION & ETHICS NEWSWEEKLY, I’m Saul Gonzalez in Long Beach, California.

KIM LAWTON, anchor: The Obama Administration launched a new initiative this week encouraging Americans to help fight hunger in their communities. The campaign is called  “United We Serve: Feed a Neighbor.” It urges people to donate money to local soup kitchens and food banks and also to volunteer their time and talents. The effort comes amid new government reports that hunger is on the rise in the US. Forty-nine million Americans struggled to put food on the table this past year—that’s an increase of 13 million—and a record number of Americans, 36 million, now receive food stamp assistance.

Joining me with more on all of this is Candy Hill, a senior vice president at Catholic Charities USA. Candy, it seems like this time of year, every year, we hear appeals from groups saying “Oh people are hungry, you need to give.” What makes this year different?

CANDY HILL, Catholic Charities: Well, we certainly are seeing such an increase, and new people that have never come to Catholic Charities for services before. Some of them are even our donors, and some of them are our former board members, so we see a real crisis in the number of people coming and who need assistance this year over the other years that we’ve been in business.

LAWTON: And there’s been some talk of food insecurity, I mean we’re not talking about starving in the streets, but we’re talking about people who are just having a harder time feeding their families?

Candy Hill, Catholic Charities USA

HILL: Yes, and I think when we talk about food insecurity we’re really talking about people not having food for three meals a day, so we find parents who are scrimping or not having a meal themselves in order to feed their children, and seniors who are making choices between whether they buy medicine or feed themselves, and in a country as great as this country we shouldn’t have people doing that.

LAWTON: And this is a function of the economy and all of the repercussions of that?

HILL: I think this is a perfect storm. We see the economy, and the people that we serve certainly were struggling before the collapse of Wall Street, but they were struggling first and will be the last to recover in this recovery.

LAWTON: And to what extent is it difficult in these tough economic times to make appeals for groups like yours, to say to people, give money to hungry people when individuals might be thinking, you know, I don’t know how I’m going to feed my own family?

HILL: Exactly. Well, what I would say as Americans we’ve always risen to the occasion, and this is one of these occasions. Our neighbors are suffering and we need to dig deep into our own pockets. The government has a role to play, all of us have a role to play, and we need to reach out and help each other during this really tough time.

LAWTON: Well, speaking of the government’s role, the U.S. government is urging people to give more in this new initiative, but is that enough? I mean, is it enough for individuals to give $20, a $100 or whatever, or do we need systematic changes in policy?

HILL: Well, I think long term we need systematic changes, but you know that’s a long term strategy and right now we have a short term problem, and so we need people to give and we also need the government to step up and do its part as well.

LAWTON: Are you pleased that the administration is having this initiative?

HILL: Absolutely, because I think it brings, it highlights always when the administration speaks on something and gives information, it helps connect to the things that we’re doing on the ground, and so this initiative, certainly, I think will highlight the need, but also the really creative things that are happening across America to try and meet the needs of individual people.

LAWTON: Yours is a faith-based organization. A lot of groups are trying to help the hungry. What is the specific role for religious groups and those from the faith community?

HILL: Well certainly we have a 2,000-year tradition that we’re supposed to feed the hungry and we take that very seriously and so we’ve been doing this for decades across the country and we see it as a moral issue, that people shouldn’t have to go hungry in a country as rich as ours, and we’re going to continue to try and meet the needs of people in local communities across this nation.

LAWTON: Again, we hear all the time people are hungry, people are hungry, the poor are always with us. Are there solutions? Is it possible to end hunger?

HILL: I absolutely believe it, and certainly the government is calling on that and Congress is as well. We have to think creatively. We have to think about 21st century solutions to 21st century problems, and the safety net in this country is badly torn and weakened, and we need to not just fix it. A repair is not sufficient. We really need to think about how do we eliminate the need for programs like food stamps, and like donations to feed the hungry through a food bank or a soup kitchen, and if we have the political will to do it in this country we can change this. You know, Bobby Kennedy forty years ago called attention in the Mississippi Delta to children being hungry, and yet today you and I are sitting here having the same conversation four decades later. We just need to rise to the occasion and have the political will to change it.

LAWTON: All right, Candy Hill, thank you very much.

HILL: Thank you as well.

BOB ABERNETHY, anchor: Now, a special report on the rebuilding of Salt Lake City. The Church of Jesus Christ of Latter-day Saints, the Mormons, are building an enormous new downtown development—high end shops, condos, and offices. Is that emphasis on wealth and consumerism compatible with Mormon values of modesty and thrift? Does it leave any room for the poor, or for the variety that helps make up vibrant city life? Lucky Severson reports from Salt Lake City.

LUCKY SEVERSON, correspondent: By the looks of things, downtown Salt Lake City has found the pot of gold at the end of the stimulus rainbow. Where else would you find 1600 construction workers on a project so immense it will transform the core of a city? But this is not stimulus money, not even one cent of local taxpayers’ money. This project, known as City Creek Center, is funded entirely by the Church of Jesus Christ of Latter-day Saints, the Mormons, and their development partners. Stephen Goldsmith was the city planning director during the Salt Lake Olympics.

STEPHEN GOLDSMITH (Associate Professor of Architecture and Planning, University of Utah): This is unprecedented. This is the single largest private development project going on in the United States today.

SEVERSON: When it’s completed in 2012, the new city center, directly across the street from the church’s temple, will include millions of square feet of retail and office space. Only the church knows the price tag, and they declined to be interviewed for our story, but the project’s cost is expected to top $1.5 billion, a price they’re willing to pay to transform Salt Lake City. Natalie Gochnour is chief operating officer of the Salt Lake Chamber of Commerce.

NATALIE GOCHNOUR (Chief Operating Officer, Salt Lake Chamber of Commerce): We have the headquarters of an international religion. We’ve hosted the world in the Olympics. So we want to build a world city.

SEVERSON: Outsiders often don’t know that, in the city itself, a majority of residents are not Mormon, and some locals are concerned that the diversity of a vibrant downtown will give way to a squeaky-clean Mormon enclave in City Creek Center. Daniel Darger owns the Blue Iguana Restaurant not far from Temple Square.

DANIEL DARGER (Attorney and Owner, Blue Iguana Restaurant): There’s no question in my mind it’s going to fundamentally change the nature and the whole culture of that part of downtown. I think primarily their goal is to get a lot of their members here and to gain control of not only the politics, which they already have, and the economy, which they already have, but the atmosphere of the whole downtown.

SEVERSON: Before the City Creek project got underway, not many would have thought of Salt Lake as a world city. It was losing its population to the burbs. Downtown was becoming a ghost town, and that wasn’t good for business or the church’s image. Elbert Peck is the former editor of Sunstone magazine, an independent journal for Mormon intellectuals.

ELBERT PECK (Former Editor, Sunstone Magazine): When I was a child, I remember coming downtown with my grandmother, and she’d walk all of Main Street stopping off at every little shop and every little boutique. It was a wonderful, vibrant downtown.

SEVERSON: But in the late ’60s, Salt Lake began to face the suburban flight that was sweeping the nation. In an effort to reverse the trend, the church developed two downtown malls on land across from Temple Square. [CORRECTION: While the church did develop the ZCMI Center, Crossroads Plaza was developed by Crossroads Plaza Associates, an investor group not affiliated with the church. The church acquired Crossroads Plaza in 2003.] Rather than revitalizing the street life, though, the enclosed malls drew shoppers into the parking garage and then sent them right back to the suburbs, leaving the rest of downtown in bad shape.

PECK: Salt Lake City was dying, and the city was becoming seedy, and image and promotion is very important to the missionary work of the church.

SEVERSON: The church is again trying to revive the streets around Temple Square, and now to get people out of their cars they’ve got TRAX, an increasingly popular light rail system that was built ten years ago. Ryan McFarland is the economic development manager for the city’s mass transit system.

RYAN MCFARLAND (Transit and Economic Development Manager, UTA): A transit-oriented development is just this. It is a walkable community that’s typically higher density and that provides for all of your needs.

SEVERSON: Strongly opposed at first, TRAX up and running is now warmly embraced, and the transit system is expanding with 70 miles of new track, some of which is federally funded. The church strongly encourages its downtown employees to use mass transit, and the new development will be serviced by two TRAX stations.

MCFARLAND: This is the core of downtown. This is the City Center station. This will be the central business district where people don’t necessarily need their car. You can walk to the supermarket. You can walk to the restaurant you want to go to.

SEVERSON: From the beginning, Mormons have been pioneers in the field of city planning. Even before Joseph Smith was assassinated, they planned and built the city of Nauvoo, Illinois, which at the time rivaled the metropolis of Chicago, only Nauvoo was designed around the church’s temple, which is center to Mormon theology. Salt Lake City was designed in the same fashion. The new plan, though, is a little different. It incorporates the church’s values and old-fashioned capitalism. Jason Mathis is the executive director of the Downtown Alliance.

JASON MATHIS (Executive Director, Downtown Alliance): My sense is that right now people are pretty enthusiastic about this, and even some of the critics in the past have said, “Well, we recognize this is going to be a really good thing for our community.”

SEVERSON: It’s unlikely that a development of this magnitude would be possible in any other US city, because no one organization owns so much downtown property, and that will include satellite campuses for two church schools. As the church’s influence expands in Salt Lake City, the interests of the non-Mormon community often conflict with those of the church, creating what Stephen Goldsmith calls a “we-they” divide.

GOLDSMITH: The community needs to understand that we do have a certain Vaticanization, if you will, of this end of town. The changing demographics of Salt Lake City, just Salt Lake City by itself, really does create a “we-they.” There’s more of a “we-they” in this community than I’ve seen in my lifetime.

SEVERSON: The “we-they” divide became more pronounced a few years ago, when the church purchased property adjacent to Temple Square and converted it into a private park known as the Main Street Plaza. That controversy grew to a full boil earlier this year when two men were found kissing in the plaza and were evicted by church security guards.

GOLDSMITH: When we privatize the public way, which is the single most important thing in the city is that democratic space of streets and sidewalks—when we lose that, we begin to lose some of that democracy. Remember, this is now private property. City Creek Center will basically control time, place, and manner of anything that happens interior to that project. So if a couple who happens to be same-sex is kissing each other after buying a wedding ring, that could be a problem.

SEVERSON: Critics worry that the church’s social policies, such as abstention from alcohol, will dictate the city’s culture. Jason Mathis says Salt Lake is not Las Vegas and doesn’t want to be, but that people here genuinely want to welcome other people.

MATHIS: It’s something that we’re really paying attention to, really trying to break down those barriers. I want people who might come downtown and go to a bar to also feel perfectly comfortable experiencing Temple Square, in the way that Parisians might experience the Cathedral of Notre Dame whether they’re Catholic or not.

SEVERSON: Even though the city has a non-Mormon mayor, and non-members outnumber members, Salt Lake is surrounded by suburbs and towns that are heavily Mormon—people who will come to the new downtown and who rarely oppose what the church proposes, even when it hurts. That includes Janice Heilner.

JANICE HEILNER (Store Owner): When we go to the temple, everyone takes their street clothes off. They have locker rooms and you can change into a white outfit.

SEVERSON: Janice operated a successful store across from Temple Square called Dressed In White until the church moved her to another location to make room for the City Creek project.

HEILNER: I was disappointed, but I could see the greater good in the whole thing. I know we were a casualty of the whole downtown redevelopment, but I realize that downtown needed a face lift. The only reservation is, will I be able to go back? I mean, you know, a new mall is going to cost a lot of money. I might not be able to afford the rent.

SEVERSON: Her reservation is probably realistic. City Creek, after all, is a for-profit, private development which favors national chains and allows it to bypass the affordable housing requirements of public developments. Higher end condos overlooking Temple Square could go for as high as $2 million.

PECK: They’re trying to make it pay for itself, first of all, because the church doesn’t like to put in money that it’s going to lose. You can’t fault them for that. But it’s going to be a high-end mall, and it’s going to be high-end apartments. But there needs to be addressed low-income housing in the city, that’s for sure.

SEVERSON: Stephen Goldsmith, the former director of city planning, is now an associate professor at the University of Utah who teaches a class about the ethics of shaping communities. He says he sees a disconnect between the business side of the church, which is constructing 900,000 square feet of retail space, and the values the church constantly preaches.

GOLDSMITH: Some of those values are frugality, modesty, humility, and it’s interesting to see how a temple to consumerism somehow is aligned with those values. What church do you know of that’s building retail space any place else in the world?

PECK: Within the church, within the scriptures, there’s a strong river of theology that is very anti-materialistic, and so there’s a conflict there. It’s the same conflict that Christians have from the New Testament, and Mormonism has pretty well made its peace with the modern consumer, capitalistic, materialistic society, and Mormons have to deal with that individually.

SEVERSON: There are parts of the development that almost everyone can agree on. City Creek is a green project, with green buildings, recyclable water, and even though the recession has hurt most of the country, the City Creek project has sheltered Salt Lake from the worst of it.

GOUCHNOUR: You know, people say there’s no safe harbor from this recession, but in downtown Salt Lake City there is. We’re on high ground here.

MATHIS: I think, though, the church doesn’t want to lose money on this, but I think that their motives have much more to do with being good community stewards, with creating a community that is going to last for the next hundred years.

SEVERSON: As for those who have concerns—

GOLDSMITH: God grant me the strength to know the things I can change and the things I can’t. I think this is a time for the community to say let’s develop the kind of city that we want. Let them develop the kind of city that they want, and maybe we can shake hands some place along the way.

SEVERSON: The church has said that the money for City Creek will come from investments and not from members’ tithes. Funding for the project was reportedly set aside before construction began.

For Religion & Ethics NewsWeekly, I’m Lucky Severson in Salt Lake City.

ABERNETHY: That story was a collaboration between this program and public broadcasting’s Blueprint America project.

Major support for Blueprint America is provided by:

FRED DE SAM LAZARO (guest anchor): For many people struggling through these hard economic times, the church has been a place to find solace and — for some — a food shelf. However, when it comes to paying the light bill, the phone bill, and the mortgage, some churches are finding themselves as hard-pressed as their congregants. While charitable giving to churches actually went up overall in 2008, many worship communities have been forced to lay off employees. Some even face the threat of foreclosure. Saul Gonzalez has this report from Southern California.

SAUL GONZALEZ: At the recent worship facilities conference and expo held in Long Beach, California, the business of marketing to places of worship was on full display. At this twice-a-year national convention, companies try to sell their products and services to churches and religious institutions.

UNIDENTIFIED SALES REPRESENTATIVE #1 (speaking to conference attendee): Maybe two cameras to cover the minister and the choir?

GONZALEZ: Their wares range from sophisticated video production gear to pews for churches and synagogues.

UNIDENTIFIED SALES REPRESENTATIVE #2: This is the Cadillac. This is our theater seat, a completely wooden theater seat.

GONZALEZ: Banks and credit unions that specialize in lending and financial consulting to houses of worship also attended.

UNIDENTIFIED BANK SALES REPRESENTATIVE (speaking to conference attendee): We don’t necessarily go by loan to value. We’re looking at cash flow.

GONZALEZ: Although there was plenty of hustle and bustle on the convention floor this year, the recession cast a pall over this expo.

STEVE KROH (Architect): In 25 years, it’s never hit us this hard before.

GONZALEZ: Steve Kroh is an architect whose firm specializes in church design. With congregations cutting back on expansion and new construction plans, Kroh is seeing his business plummet.

Mr. KROH: We’re not having to lay off a lot of people yet, but we’re cutting back on hours and just trying to hang in there right now. We are taking a lot smaller projects than we used to just to keep everybody busy.

ERIC KNOWLES (Founder and CEO, Church Brokers, San Diego, CA): The recession is hitting everybody, and it’s affecting churches just as much as it is the mom and pop homeowner.

GONZALEZ: Eric Knowles is the founder and CEO of Church Brokers, a San Diego firm that specializes in church real estate and financing.

Mr. KNOWLES: Right now, most of the churches we’ve been working with, probably the past year or least, they are all pulling the reins in. They’re not spending anything outside of the hard fast debt they have to pay. Salaries are getting cut back. People are getting let go. A lot of churches are letting their staff go or reducing their pay, going to part time. So it’s a challenging time for churches right now.

GONZALEZ: One house of worship struggling to keep its doors open in the down economy is Long Beach’s Immanuel Church, which is part of the United Church of Christ.

Reverend JANE STORMONT GALLOWAY (Pastor, Immanuel Church, Long Beach, CA): Foreclosure is a possibility and something that we are concerned about.

GONZALEZ: And to those out there who think of churches as being foreclosure-proof?

Rev. GALLOWAY: Oh, no. Forget it.

GONZALEZ: With revenues down, Reverend Jane Galloway’s church is struggling to pay off a more than $850,000 mortgage and loans used to pay for repairs of this more than 80-year-old building.

Rev. GALLOWAY (speaking at meeting): Talking with the mortgage — our mortgage broker. . .

GONZALEZ: To stay afloat the church has cut expenses, and Reverend Galloway has volunteered to slash most of her own pay.  But despite the belt tightening, every bill that arrives brings a new challenge.

Rev. GALLOWAY: I mean we’re literally at a point where my husband walked in the other day and said this was on the side door, and it was a turn-off notice for the utilities. Now we are at a scary moment, and we know that each month, if we are unable to make our mortgage payment on time, we could be — the default process can be filed and a foreclosure proceeding could begin.

GONZALEZ: Although no single, hard number exists, banks and credit unions that lend to houses of worship report a steady increase in church bankruptcies and foreclosures. One of them is this 1,000-seat church north of San Diego. Built just in 2005, it closed last year after the church defaulted on loans. Even wealthy and powerful megachurches, such as southern California’s Crystal Cathedral, have had to cut staff and put millions of dollars worth of property up for sale to help pay off debts. Whether they’re big or small, many churches’ money troubles stem from s steady decline in giving. According to the Christian research company the Barna Group, American churches got between $3 and $5 billion less in donations than they expected to receive during the last quarter of 2008. That’s about a four to six percent decline.

Reverend PHIL HERRINGTON (Pastor, Pathways Community Church, Santee, CA, addressing congregation:  I thank you to so many of you who have given faithfully using this envelope.  It really helps us pay the bills and do what we do as a ministry — in helping people and loving God and loving people.

GONZALEZ: Phil Herrington is pastor of Pathways Community Church in Santee, California.

Rev. HARRINGTON: We have a number of people in our church right now that are unemployed, that have lost jobs. People who used to be significant donors in the church have just flat out lost their income. Maybe they can give in a smaller way, but that affects our overall income.

GONZALEZ: In response, Pathways has had to cut staff and fill more positions with volunteers. Houses of worship that face foreclosure and other financial troubles often get into their predicaments for the same reasons that homeowners and consumers do: borrowing and spending too much money when times are good and not being prepared when the economy goes from boom to bust.

Mr. KNOWLES: You know, churches are no different than, literally, business owners or homeowners. We all believed that everything was going continue to appreciate, that there was no turning of the curve, and so everybody was overleveraging, and churches are no different. They were not exempt.

GONZALEZ: Real estate broker Eric Knowles, a devout evangelical Christian, says churches’ financial problems are sometimes made worse by leaders who are unable to face harsh economic realities.

Mr. KNOWLES: There’s that faith, you know, that often we think that the Lord is directing us to go do something. Well, how do you refute that when I deal with a pastor that says that the Lord is calling me to buy this building? And I have many situations where it will not pencil. We run our analysis and we get real involved and detailed.  But then the pastors continue to say, well, I believe God is directing me for this. Goodness. So what do you do? What do you do? We give the best counsel we can. We give it to them pragmatically, you know, documented in writing that this is where you are going to be, and often time the pastor will look me in the face and say, well, you know what? I understand what you are saying. I understand by earthly standards this will not work, but God has called me to do it. And that’s the trump card. What do you do? You’re just kind of like, okay.

GONZALEZ: In both good economic times and bad, some churches are supplementing what goes into collection baskets by finding new and creative ways to raise income.  For instance, with assistance from investors Pathways Community Church purchased this once dilapidated shopping mall. The church occupies the space that was once a supermarket but rents out the rest of the center to other businesses. The revenue earned helps the church pay operating expenses and mortgage payments that total over $21,000 a month.

Rev. HARRINGTON: Right now it’s helping us survive. If we didn’t have that right now we would have to massively downsize staff and personnel and do a lot less ministry out in the community than we are doing right now. So it has opened up a lot of doors for us.

Rev. GALLOWAY (speaking at meeting):  I think it could be shared space, perhaps like a collective office space . . .

GONZALEZ: But as they try to guide their churches through turbulent economic times, the strain is taking a visible toll on some religious leaders such as Reverend Galloway.

Rev. GALLOWAY: I really want this to work, and I feel a sense of responsibility. I’ll let myself be this vulnerable because you are asking me this. I feel a sense of responsibility to the people I am here for. People come here with broken hearts. People come here looking for food — looking for spiritual food, and I hear the kind of despair they are in, and I realize that it’s crazy for me to be this preoccupied with the finances of some place, when I’m here to create a place where people can come and find solace. So I feel a sense of responsibility to the people who come here for that kind of nurturance.

UNIDENTIFIED SALES REPRESENTATIVE #3:  We’ve developed what we call our McDonald’s approach to church design.  It’s our “church in a box.”

GONZALEZ: At the expo, those attending hoped the recession would soon end, allowing houses of worship to focus not on their money problems, but on their ministries.

For RELIGION & ETHICS NEWSWEEKLY, I’m Saul Gonzalez in Long Beach, California.

MARY ALICE WILLIAMS, guest anchor: In inner cities across the US high numbers of African-American men are caught up in the criminal justice system. It’s costly to keep them in prison. It’s also costly to the communities they leave behind — and return to. Phil Jones reports.

PHIL JONES: Welcome to Brownsville — a pocket of poverty inside Brooklyn, New York, a place where crime and prison often are a way of life.

RONALD HERRON: Both my parents were drug addicts. My father wasn’t at home.

Ronald Herron

DEJUAN SMITH: I went to prison for murder in the second degree.

NATHANEL RICE: The first time for robbery — two years; second time for robbery —12 years; third time for drug possession.

VINCE MATTOS (Community Activist): I was out hustling narcotics. What I would have to tell Mom is, “Look, I found a whole bunch of money!” I would see Mom crying because she was behind on bills or something like that. I would come in and say, “Mom, look I found x, y and z.” You know, she was like, oh, you know, “God is good” — this and that.

JONES: But Vincent Mattos’s mother is proud of her 42-year-old son.

Mr. MATTOS (speaking to men): Hey brothers. How you doing?

JONES: He now roams these troubled streets as a community activist. He knows the turf.

Mr. MATTOS: Young men that’s out on the corner from sun-up to sundown, falling back to do what they know to do to earn a living because there’s no jobs for them. There’s no helpful reentry program that’s in place right now. Whatever you want, you can get it on this strip. Drugs, sex, and guns, that’s what’s major out here.

JONES: What else is major — the pervasive presence of police with the task of arresting the bad guys and putting them behind bars. There is no doubt that police activity decreases crime. But is there a tipping point, when legitimate law enforcement, designed to protect the public, may have unintended consequences: promotion poverty, even more crime?

ERIC CADORA (Director, Justice Mapping Center): The current overuse and overdependence on criminal justice is a complete failure. It’s having no impact on these issues of public safety and crime. That’s not to say there isn’t a need for a level of criminal justice. But this radical overuse is not accomplishing those goals.

Eric Cadora

JONES: In the 1970s, there were about 200,000 inmates in US prisons. Today there are about two million. For years law enforcement used crime mapping to target places where the crimes were being committed. Eric Cadora, director of an organization called the Justice Mapping Center, is an advocate for sentencing reform and prison alternatives. He proposed another use for mapping.

Mr. CADORA: I said, “Well, what if we don’t do crime mapping? What if, instead, we mapped where people lived who are going into jail and prison every year?” When we started doing maps of where people lived, we found hugely concentrated neighborhoods where vast majorities of people were going to prison and jail and coming back, and other neighborhoods where nearly none were.

This is New York City. The brightest red show the highest rate per thousand adults, male adults, admitted to prison for a single year. Let’s say there are about 100,000 people living in Brownsville — about half of them are male, that’s about 50,000. About — between 10 and 13 percent are going to prison and jail every year.

JONES: This increased prison population has come at a staggering cost to taxpayers.

Mr. CADORA: We can now calculate, block by block, how much we’re spending to remove and return people en masse from and back to that block.

JONES: This cluster of housing projects is what Caldora calls a “Million Dollar Block.”

Mr. CADORA: We found about 150 individual blocks in New York City for which we were spending more than $1 million a year to remove and return people to prison and jail.

Vince Mattos

JONES: Cadora uses dark red to show the concentrations in other states. They are maps that call for new directions.

Mr. CADORA: What these maps have done is accumulate the effect over the course of a year of a criminal justice and imprisonment system. What’s heated up here is a mass migration with the costs of having to move back and forth from this neighborhood to prisons upstate and back. So what we’re seeing here is constant grappling with resettlement, with disruption, cost of split families, tough health care.

JONES: Greg Jackson, another civic activist and a life-long resident of Brownsville, doesn’t need a map. He’s seen his own community imprisoned.

GREG JACKSON (Community Activist): Incarceration is not just the individual going to jail, but it’s the whole family going to jail, for Brownsville. Everybody’s suffering from it.

JONES: How’s that?

Mr. JACKSON: Because when this individual comes out of jail he still can’t find employment. And that person, the kids he left behind, the parents he left behind, the wife he left behind, they all suffer in the interim. So, when he comes out you think, “Wow, it’s a good time, my father’s coming out of jail, my mother’s coming out of jail.” There’s nothing good about it.

JONES: For one thing, felons aren’t allowed to live in these public housing projects, although some do. Others end up homeless, and most are jobless. Ask Dejaun Smith, still struggling eight years after his release.

Mr. SMITH: I’ve done odd jobs like — I couldn’t even begin to tell you how many. I went to an interview several months ago, and once they learned about my conviction they looked at me like, “Don’t call us, we’ll call you.”

JONES: After decades of hard-line policies on crime — tough justice — more and more communities are looking into what is called Justice Reinvestment.

Mr. CADORA: Let us take the investments that had been built up over the years from criminal justice, redirect them to investments in civil institutions in those neighborhoods — better schools, better health care, better mental health support, and so on. In many of the states where the Justice Reinvestment initiative has taken root, prison populations are either dropping or the trend line in growth has been radically reduced, and that’s from Connecticut to Kansas — liberal to conservative.

Matoka Belton

JONES: Most of the crimes are connected to violence, drugs, and alcohol. But researchers found another culprit for the increased prison populations.

Mr. CALDORA: We found states where 60 to 65 percent of everyone entering prison each year were entering as a result of a revocation of parole and probation.

JONES: That was the case in Kansas, so legislators passed a new law — a new direction —committing taxpayer dollars to cities and communities that change parole and probation regulations that’ll reduce the prison population by 20 percent.

Mr. CALDORA: That’s kind of what the reinvestment project is about. It’s about saying, “Look, if you can reduce it, we’ll give you the money to keep reducing it.”

JONES: According to Caldora, states are being forced to rethink their hard line throw-the-criminals-in-jail attitude because, especially in these hard economic times, the criminal justice system is too costly, both financially and psychologically.

Mr. CALDORA: They realize that this overwhelming overuse of criminal justice is one of the greatest threats to sort of civil society.

JONES: This threat to society, this impact on communities in prison, can be felt on the streets and inside the crowded housing projects. We met Matoka Belton. She didn’t want us to see her three children. Their father went to prison.

(to Ms. Belton): What was he in prison for?

MATOKA BELTON: A number of things, and it was due to survival.

JONES: What was impact on the children of him being away?

Mr. MATOKA: It’s hard because they’re like, you know, what “school” is this, because you try not to say he’s in prison. “What school is this that they don’t come home? College?” But then it comes to the point where they’re a certain age and you can’t lie anymore. I was once an inmate myself. I know what it was like for my children to feel like, “Wow, my mother’s not here. Why can’t mommy come home with us?” It’s hard to leave a visit.

JONES: It’s a cruel cycle — poverty, crime, prison — passed from one generation to the next. A child whose parent went to prison is likely to end up behind bars too.

Mr. MATTOS: When you look at a kid and you say, “How could that kid, you know, have done such a crime like that?” Because he was never really told that was something wrong to do. He never celebrated Christmas with the family or sat down at the dinner table with the family.

JONES: About 700,000 inmates come back home every year. Most are unprepared for re-entry, and their communities are unprepared for their return. As the US government is making huge investments in industries and businesses, it is now being forced to also address a broken justice system, a system in desperate need of a stimulus package of sorts — justice reinvestment.

For RELIGION & ETHICS NEWSWEEKLY, I’m Phil Jones in Brooklyn, New York.

BOB ABERNETHY, anchor: Now, a special report on religion and the economy. According to new figures from the U.S. Labor Department, more than six million Americans are now receiving unemployment benefits. Every metropolitan area in the country has seen a rise in unemployment rates over the last year, and the biggest jump was in Indiana’s Elkhart County. Kim Lawton went to Elkhart to find out how the religious community there is responding to the crisis.

KIM LAWTON: In Goshen, Indiana, just outside Elkhart, it’s the annual Family Fest at Bethany Christian Schools. Usually, it’s a time of joyous community celebration. But this year there was a new note of anxiety as the area reels from one of the worst unemployment crises in the country.

Allan Dueck

ALLAN DUECK (Principal, Bethany Christian Schools): People are recognizing this as a widespread need and know that “there but for the grace of God go I.” It could be me tomorrow or my family member, and so I think there’s a real sense of pulling together in ways we can.

LAWTON: This is RV country, where more than 60 percent of the nation’s recreational vehicles have been manufactured. But in tough economic times when gas prices are unpredictable, when people aren’t buying luxury items and when banks are restricting loans, the RV industry has collapsed. Factories here have closed or made drastic cutbacks, and the ripple effect is touching virtually everyone.

According to the Indiana Department of Workforce Development, since the beginning of this year the unemployment rate in this area has jumped to nearly 20 percent. That’s well over twice the national unemployment rate, and many believe the rate here is actually much higher, because the official numbers don’t include those who don’t file for unemployment benefits. In this area that includes large numbers of laid-off undocumented immigrants and Amish people who took factory jobs when they couldn’t make a living on their farms.

Derald Bontrager is president and COO of the Jayco RV company, which his parents started 41 years ago on his family’s farm. At Jayco’s peak two years ago, they were producing nearly 40,000 campers a year. Now they’ve had to cut that in half.

DERALD BONTRAGER (President and COO, Jayco): It’s a gut-wrenching experience to go from 2,200 employees down to 1,100, particularly in this environment, because you know that each one of those employees you lay off, that the chances of finding any meaningful employment in the near future is almost non-existent.

LAWTON: Bontrager, who is a leader in his local Mennonite congregation, says he’s dealing with a difficult moral equation.

Derald Bontrager

Mr. BONTRAGER: In many cases, the people that we’re no longer able to employ are the same people that I go to church with on Sunday. I see them at the basketball games on the weekend; I see them at the restaurants. But you really have to try to separate that from knowing that we have a real obligation to make sure that we survive as a company in this environment, because we still are employing 1,100 people.

LAWTON: Bontrager says he’s relying on his faith.

Mr. BONTRAGER: You need to draw strength from somewhere, and I can’t think of anywhere else I’d rather draw strength from than God.

LAWTON: In this overwhelmingly Christian community with a significant Mennonite population, churches are being called upon more than ever to help meet physical and spiritual needs. One of the most prominent efforts is Church Community Services, a ministry supported by Mennonite, Catholic, mainline Protestant, and evangelical congregations. CCS has several programs, including a food pantry that is seeing all-time highs in the number of requests. They also provide emergency assistance to people who can’t pay for rent, utilities, and prescription medicine. Dean Preheim Bartel is executive director.

DEAN PREHEIM BARTEL (Executive Director, Church Community Services): To me, it’s a way of Christians actually putting their hands and their feet to what they believe. So it’s not just something in their head, but it’s something they are actually doing. They’re putting their heart and soul into it.

LAWTON: The needs are now so great CCS is moving to a bigger space to better handle the situation. Resources are being stretched thin. The agency has been seeing between 300 and 400 new clients every month. Many have worked their entire lives and never needed outside help.

SHARLEE MORAIN (Volunteer, CCS): And these people, they’ve not been in the system before. They just got laid off, and they’re, like, “Ugh, I don’t know what to do,” and the system just beats you up.

Dean Preheim Bartel

LAWTON: The agency is sponsoring a job-training program for women called Soup of Success or SOS. It’s a holistic project that teaches women how to be good employees as they work in a small business packaging dry soup and cookie mixes into gift baskets. They learn life skills as well as job skills. Preheim Bartel says through it all CCS is trying to instill hope amid tough times.

Mr. PREHEIM BARTEL: Sometimes as an agency we can’t provide the tangible things people need, but what we can do is we can treat them with dignity and respect, and we can provide them with an atmosphere that’s hopeful.

LAWTON: Requests are also dramatically up at the Maple City Health Care Center, which provides sliding scale discounts for people who can’t afford medical care. Until now, they’ve always required patients to pay at least 10 percent of their costs.

Dr. JAMES GINGERICH (Family Practice, Maple City Health Center): When you start having families come in where the kids are only really getting meals at school for free lunches and breakfasts, and they’re choosing between food and healthcare, a 90 percent discount doesn’t cut it.

LAWTON: The health center has begun asking patients to volunteer at a local charity in exchange for $10 credit toward their medical bills. Dr. Gingerich says the program has been especially meaningful for the area’s growing number of unemployed Latino immigrants, many of whom are undocumented.

Dr. GINGERICH: Those people don’t have access to food stamps. They don’t have access to unemployment. They don’t have a safety net that other unemployed people do, and they’re often socially much more isolated because they don’t — they’re immigrants. They don’t have generations of connections in the community.

Dr. James Gingerich

LAWTON: The trickle-down effect of the unemployment crisis is hurting businesses and nonprofits across the board. Bethany Christian Schools is a Mennonite school for about 280 students in grades 6 through 12. They’ve been trying to provide tuition help so unemployed families can keep their kids in the school. Bethany’s main fundraiser is an auction at the annual Family Fest. People donate items to be auctioned off, such as handmade quilts and furniture. This year’s event fell short of what they made last year. Principal Allen Dueck says the school faces a tight budget.

Mr. DUECK (Principal, Bethany Christian Schools): Teachers are looking at a zero increase this year, and we hope that will be enough to make things work. We may have to reduce staffing a little bit, depending on how enrollment shakes down for next year.

LAWTON: Churches, which support these community ministries, are facing their own budget shortfalls at a time when they are being asked to do more. Many congregations have established job counseling programs and support groups for the unemployed. Church leaders say the situation has taken a heavy spiritual toll.

At Elkhart’s Associated Mennonite Biblical Seminary they’re teaching future pastors how to counsel people affected by the crisis. Seminary president Nelson Kraybill says it starts with listening.

NELSON KRAYBILL(President, Associated Mennonite Biblical Seminary): You don’t come with quick and easy answers, and anyone who does, saying, “Well, this is what you ought to do” or “This is where you’ve made a mistake” — if you start with that I think you have defeated the entire purpose of the pastoral encounter.

LAWTON: Rick Yoder was laid off in September after working for a major RV manufacturer for 25 years. He’s in a church support group.

Rick and Joy Yoder

RICK YODER: Some people are executives. I come in as a laborer, forklift driver, truck driver, and we all say the same things. It’s about our identity, our livelihood, and changing. It’s the hardest thing to do.

JOY YODER: It’s probably the biggest challenge for me. I pray a lot, and I journal a lot, and it fluctuates from day to day, because I’m the main bread winner now, and I’ve never been in that role before.

LAWTON: Rick’s wife, Joy, works in the kitchen at Bethany Christian Schools, so she gets a discount to help with their daughter Jama’s tuition. But she doesn’t earn enough to cover all the family’s bills. Church friends have stepped in to help.

Mr. YODER: Right away some people come to me from our Sunday School class and said, “We know you need a roof on your house, and we want to do something.” That was so hard to accept, but I had to. But, you know, you do, and someday I’ll be on the other end giving.

Ms. YODER: We are used to giving and helping needy people here, and I think that’s been one of the biggest struggles, but also an area that I’ve had to learn to — the people want to help, and to say no you’re hurting them, and you’re taking that gift away from them.

LAWTON: Laid-off executive Michael Stevens says unemployment has made his faith stronger. A cradle Catholic, he’s spending more time at church and in prayer. He believes God will provide him the right job at the right time.

MICHAEL STEVENS: Even though it’s devastating to lose your job, as one door closes another one opens, and people should really embrace that and pray to God about that and look to go into that next open door, because that might be the door that he’s calling you to.

LAWTON: Kraybill says the entire community is learning important spiritual lessons.

Mr. KRAYBILL: When I have my bank account and my retirement and secure employment and my mortgage pretty well paid off, it’s pretty easy for me to get spiritually smug and think I don’t need God, and it’s in the people around us who are the most vulnerable where we are going to see the face of God.

LAWTON: Despite all the bad news, local leaders say faith and a strong community spirit are prevailing.

Mr. BONTRAGER: We’re still a very vibrant community, and people are committed to making it work—and we’re not going away.

LAWTON: They say that spirit will get them through this crisis. I’m Kim Lawton in Elkhart County, Indiana.

LUCKY SEVERSON:  Not too long ago, it would have been almost impossible for General and Candice Sutton to buy a home without violating their faith. They are both devout Muslims who want to finance their new home by following Islamic law, known as Shari’ah, which forbids paying interest.

CANDICE SUTTON:  For us, religion and our faith is — we’d like to incorporate it to every means of our life.

GENERAL SUTTON:  Islam is not just a religion — it’s a way of life.  So when you look at a way of life, you have, you know, different ethical things that you should do, should not do not do.  We are not supposed to be paying interest because that’s not in our way of life.

SEVERSON:  Ibrahim Warde is a professor at Tufts Fletcher School of Law and Diplomacy.  He teaches a class that’s increasingly popular on Islamic banking and finance and says it was the Prophet Muhammad, himself a merchant, who condemned the practice of charging or paying interest, called “riba” in Arabic.

Professor Ibrahim Warde

Professor IBRAHIM WARDE (International Business, Tufts Fletcher School of Law and Diplomacy): There used to be a very common practice of “riba,” which was periodic doubling of the interest.  So, in other words, if you owed money and were unable to pay it, then it would have to be doubled and the whole process would end with enslaving the debtor.  So with the advent of Islam, there was an end to that practice.

SEVERSON:  Candice, who is a transportation engineer, and General, a software developer, are looking for a home closer to work and closer to their mosque.  Their real estate agent is Roma Elhabashy, a Muslim himself, who felt guilty about buying his own home through conventional financing.

ROMA ELHABASHY:  I waited for a long time then I made a mistake and bought a house with regular financing and I couldn’t live with it so I actually had to sell the house for that reason.  Taking advantage of someone who needs money by charging them more money doesn’t make sense.

SEVERSON:  He says it’s not just Muslims who are inquiring about Shari’ah financing.  It’s non-Muslims as well who share General Sutton’s point of view.

Mr. SUTTON:  A lot of the finance companies who are not taking interest, you know, they don’t seem to be as hurt as much as these other companies.  And, you know it’s all driven by money. So it’s all about greed.  You charge interest, you want more money and that just leads to more things that leads to a bad path.

UNIDENTIFIED LOAN OFFICER (Guidance Residential, talking on phone):  How much of a loan are you looking for?

SEVERSON:  This is Guidance Residential, in Reston, Virginia, one of a growing number of companies catering to Muslim home buyers, by devising ways to finance mortgages without levying interest charges.  Candice and General plan to finance their home through Guidance.

Hussam Qutub

Here’s how it works: Candice and General would make a qualifying down payment and Guidance and the Suttons would then purchase the home as co-owners.  But instead of charging interest, Guidance would assess a monthly tax-deductible fee.  Hussam Qutub, is the Director of Communications for Guidance, which has financed more than 5,000 home purchases since 2002.

HUSSAM QUTUB (Director of Communications, Guidance Residential):  Now, in that monthly payment portion, there are two elements.  One is the acquisition element — acquisition portion of the payment.  And the second is the charge.

SEVERSON:  The fee?

Mr. QUTUB:  The fee.  With every payment the customer is increasing his or her shares in the property and ours are decreasing.  And at the same time, their fee is decreasing because we owning less.

SEVERSON:  Professor Warde says skeptics who argue that the finance fee is really not much different than interest are missing the point.

Prof. WARDE:  The example I typically give is religiously inspired dietary rules, in that if some people don’t want to eat food that is not halal or kosher, then a nutritionist can come to them and say, “Why are you doing that?”  But for these people, for religiously minded people, how the food is prepared is quite significant.

SEVERSON:  There are other significant differences.  For instance, the late fee at Guidance is never more than $50.  Shari’ah mortgage holders are also less likely to default on their payments.

Prof. WARDE:  If there’s nothing else you could do in terms of paying a debt and you’ve tried to repay it, then the logic of the Shari’ah is that the loses should be shared by both the borrower and the lender.  But it is definitely a sin to be able to repay and yet not to repay it.

SEVERSON:  But it would also be a sin for Guidance to foreclose on someone without trying to work things out.

Mr. QUTUB:  If for some reason the property value, just as we are seeing today, decrease and we are stuck with proceeds that are not even close to what we are owed on our share, we won’t pursue our partner.  We won’t pursue their savings accounts.  We won’t go after their personal assets.

Prof. WARDE:  One interesting statistic about Muslims in the U.S. is that although they tend to be wealthier than the average American, the rate of home ownership is lower, so most sociologists explain that in terms of some misgivings that Muslims might have about interest-based mortgages.

Zulikha Hussain

ZULIKHA HUSSAIN:  I know a lot of friends who were just renting homes and they were not comfortable because of the simple fact that they strongly had this feeling that it’s definitely a sin to do when you are taking interest or even giving back interest.

SEVERSON:  When Zulikha Hussain and her husband and four kids were relocated to Northern Virginia, she was aware of Shari’ah financing but her husband’s company required that the family use conventional mortgage financing.  Zulikha decided to refinance the house the Shari’ah way so she could perform the fifth pillar of Islam, the pilgrimage to Mecca, with a clear conscience.

Ms. HUSSAIN:  It’s recommended that you are free of debt before make that pilgrimage. That’s why a majority of the Muslims prefer not to get into that particular situation.

SEVERSON:  Shari’ah compliant financing is now moving beyond home mortgages to investments in things like mutual and equity fund.  For the past 10 years, there’s been a Dow Jones Islamic Market Index where investment opportunities are monitored to see that they comply with Shari’ah law.  Islamic market investors, it turns out, have not been hit as hard as conventional investors in the current economic meltdown.

Prof. WARDE:  Shariah compliant mutual funds do not invest in financial institutions.  And given the collapse in the value of financial institutions in the last couple of years, Islamic mutual funds have done quite well, which is also one reason why many non-Muslims have been attracted to Islamic mutual funds.

SEVERSON:  The Dow Jones Islamic index also excludes investments in things like gambling, alcohol, cigarettes, pornography and pork, as well as companies that are highly leveraged or that have shown ethical lapses.

Mr. QUTUB:  Certainly there was an incredible amount of speculation, incredible amount of unknowns and risks were taken.  And that is something that we know in Islam is really heavily prohibited, where you are in essence almost gambling, and gambling is something that is not permissible in Islam.  But for Muslims like Zulikha, Shari’ah compliant financing is about more than money.

Ms. HUSSAIN:  I feel like God’s showing me, “Hey, I’m giving you this opportunity to refinance.  I’m giving you this opportunity to see that this is out there for you.”  So when I do go and perform the pilgrimage, I’ll feel very good about myself that I have completed all the tasks that I needed to do.

SEVERSON:  Shariah financing and investments are still only a tiny portion of the financial market, but growing.

For RELIGION & ETHICS NEWSWEEKLY, I’m Lucky Severson in Ashburn, Virginia.

UNIDENTIFIED NUN (making announcement on the PA at a day center): Attention in the shelter.  We are now ready to serve breakfast.  Families with children at the beginning of the line.

LUCKY SEVERSON: What Americans don’t want to hear right now is more bad news, but it should come as no surprise that so many of our neighbors and fellow citizens — more than one in 10 of us — are either experiencing hunger or staring it in the face.

SHANNON: We’re getting ready to sell the house because we’re going to be going into foreclosure.

SEVERSON: People like Shannon and Erin simply can’t hang on any longer.

ERIN: Our payments are going up. Every six months they keep going up, and we don’t make enough to cover the mortgage and all the other necessities — you know, electric, gas, food.

SEVERSON: If not for churches and charities manning the food banks and mobile pantries, many more would be hungry. If not for friendly volunteers, the ordeal of asking for a handout would be even more demeaning.

Melody Wattenbarger

This is the Roadrunner Food Bank in Albuquerque, which is funded almost exclusively from private and corporate donations, from companies like Costco for instance. The food goes from here to over 600 outlets throughout New Mexico, the majority of them faith-based. It’s an impressive operation. Roadrunner is a member of Feeding America, formerly known as Second Harvest, the country’s largest hunger relief agency. Melody Wattenbarger is Roadrunner’s executive director.

MELODY WATTENBARGER (Executive Director, Roadrunner Food Bank, Albuquerque, NM): Food banks are sort of like the canaries in the mineshaft.  We’ve been saying for a long time that things were not going well — that families were struggling. The frustrating part is that the need has been going up 30 or 40 percent, and I said yesterday now we don’t need canaries in the mineshaft anymore. Everybody knows. Everybody knows how bad it is.

SEVERSON: Feeding America gives food assistance to over 25 million Americans. Nine million are kids; three million, seniors. The nonprofit supplies over 200 food banks in every state that, in turn, distribute to food pantries like this one in Riverhead, Long Island managed by the Long Island Council of Churches. Reverend Tom Goodhue is executive director, and he’s not happy.

Reverend TOM GOODHUE (Executive Director, Long Island Council of Churches): We’re more and more feeding people now who are employed fulltime and can’t make ends meet. It makes me angry. I got to tell you, to see hardworking people who are still employed full time and are doing the best they can and can’t make ends meet really, really makes me mad.

SEVERSON: In New York City, nearly two-thirds of the food agencies haven’t had enough supply to meet the demand. Joel Berg is the executive director of the New York City Coalition Against Hunger.

JOEL BERG (Executive Director, New York City Coalition Against Hunger): If things had gone in the last few years from bad to worse, the last year things have really gone from worse to worser.  That’s horrible English, but that really describes what’s happening.

SEVERSON: A recent survey by Feed America found that three out of four food pantries nationwide are faced with rationing food. This small outlet north of Albuquerque called People Helping People has had to close its doors on occasion. This is Chris Hoyle:

(to Ms. Hoyle): And you’re really under siege right now, aren’t you?

Chris Hoyle

CHRIS HOYLE (People Helping People): Yes, we are. Yes, we’re struggling right now without finances.

SEVERSON: Because?

Ms. HOYLE: Because our donations are down and our numbers are extremely high.

LINDA STEVENSON (People Helping People): We are probably looking at about 50, 60 families — new families — a month.

Ms. HOYLE: Yes, we’re seeing a lot of people who have never come, and they’re just in need now. They’ve hit at a place in their life when they’ve been laid off, they’re in between jobs, and they simply need food.

SEVERSON: People we’ve spoken with who feed the poor say this hard time stands above all others they can remember because of how deep it reaches and how widespread it is. They say an increasing number of people who were once donors themselves are now coming in for help, and they say that churches and charities can no longer feed all the Americans struggling with hunger.

The hunger situation in New Mexico is even worse than other parts of the country. Here, one in six adults can’t put enough food on the table. One in four kids are hungry.

Ms. WATTENBARGER: Almost half of the people being served by our mobile pantries are children. What we think is happening is that people are able to swallow their pride when their children are involved, and if there weren’t children, they likely would just make do in some kind of way.

SEVERSON: Many feel that they are forgotten victims of circumstances beyond their control. Some are angry but they don‘t quite know who to blame.

Ms. STEVENSON: There are people making paychecks that are absolutely ridiculous, and there are people that are hungry. How do they sleep with their conscience? How do they do that? Obviously they — I’d love to invite them here, see what the real world is like.

SEVERSON: One of the biggest increases in demand comes from folks on fixed incomes, like Betty Orwick, a long-time volunteer.

BETTY ORWICK: Fixed income — Social Security goes just so far. Food prices are way up.

SEVERSON: Has that been one of the big problems—that food prices have gone up so much?

Ms. ORWICK: Yes sir, yes sir, and I speak for a neighbor of mine. They decide whether or not they should get food or whether they have to get their medicine. That’s hard.

Ms. WATTENBARGER: My heart really goes out to people on fixed incomes, because there isn’t anything they can do. They have so much pride, and they just will almost never seek help.

Lindsay Work

SEVERSON: Near downtown Albuquerque, the St. Martin’s day center and soup kitchen feeds about 400 people a day. Many of the clients here are chronically homeless. As many as three out of four have a mental or physical illness. These are not the people who lost jobs in the suburbs from huge chains like Circuit City and Linens ’n Things. Most here lost minimum-wage jobs in places like fast food establishments. Some, like Lindsay Work, can’t go back to work until they get medical care, which is way beyond their means.

LINDSAY WORK: I was a security officer for about the last 17 years, and I had a massive seizure working security at the state fair, and after that I just lost everything.

SEVERSON: Now he and his wife are sleeping in shelters.

Mr. WORK: You got to make the choice of either food, rent, or bills. You know, whatever gets — keeps you safe, and right now it’s the thing of food. You’ve got to put food in your stomach.

SEVERSON: Linda Woods Fuller is the director at St. Martin’s, up against lagging donations and vastly increasing need.

LINDA WOODS FULLER (Director, St. Martin’s Hospitality Center): We help with the near poor. You know, we don’t just say homeless, because the near poor is that population that is steadily increasing.

SEVERSON: Here’s the good news: People are less oblivious to the misery around them. They’re helping more.

Rev. GOODHUE: One of the great things that I think is happening in this recession is the people are much quicker to see that their neighbors are in the same boat that they are in. So there’s been really a huge outpouring of generosity from people saying, “I want to make sure my neighbors don’t starve.”

SEVERSON: And some pastors report that more people are going to church and volunteering in food pantries like this one sponsored by the Evangelical Church of Philadelphia in Albuquerque. Pastor Joe Romero:

Pastor JOE ROMERO (Church of Philadelphia, Albuquerque, NM): Every time there’s a crisis and it seems like it’s desperate — and it’s always at the end of the rope — and when people feel they’re at the end of the rope they start turning towards God, you know.

SEVERSON: The bad news is that the need is so great, all the churches and charities put together can’t feed all the hungry.

Mr. BERG: Saying that we can end hunger with a few canned food drives—a problem that impacts 36.2 million Americans, a population larger than the state of California—just isn’t true. The only way to make a serious difference in actually reversing the trend of growing hunger in America is for the federal government to once again play the leading role, which I am thankfully able to say under the Obama administration it’s actually starting to do.

SEVERSON: Berg says hunger costs the U.S. $90 billion a year in medical costs and lost productivity. A few years ago, the Department of Agriculture devised a new measurement called the Food Insecurity Index. In New Mexico, it’s 16 percent. Melody Wattenbarger doesn’t like the term. She says maybe if we called it what it is, we would treat it more seriously.

WATTENBARGER: It is a cruel circumstance for people, and to call it other than what it really is — it’s people skipping meals, children going without food. It’s hunger.

SEVERSON: According to Feeding America, the president’s stimulus package will add $20 billion to help relieve hunger among America’s families. It’s by far the largest increase of its kind in history. This means a family of four on average should receive an additional $80 a month in food assistance for the next three years.

For RELIGION & ETHICS NEWSWEEKLY, I’m Lucky Severson in Albuquerque.

President BARACK OBAMA: “…a situation where greed, excessive compensation, excessive risk taking have all made us vulnerable and left us holding the bag.”

ABERNETHY: We want to pursue the moral issues of the meltdown with David Miller who teaches business ethics and directs the Faith and Work Initiative at Princeton University, after a career in corporate finance. His most recent book is “God at Work.”

David, welcome. Let’s begin with the enormous gap in pay between the richest few and the average employee. Is that difference in your judgment fundamentally unfair?

Dr. DAVID MILLER (Director, Princeton University Faith & Work Initiative): It’s a great question. In fact, the final exam topic I’ve given my students in the business ethics class is this: “Is executive compensation just or just obscene?” In some cases multiples of 350 times the lowest paid employee is outrageous and not just, not moral. But there are cases when people have added value to society, to their organization; created jobs; dealt in highly risky industries in prudent and responsible ways, and we should reward those people handily. But, indeed, there are some egregious examples, particularly those who get paid for it in non-performance.

ABERNETHY: And the consequences of that for young people, bright young people coming into the workforce? You’ve talked about that.

Dr. MILLER: Yeah, I think there’s a bit of a shift. People going to college and they’re bright and excited. They want to go out and change the world and make a contribution, and then they get lured to Wall Street. Indeed, I’ve been there myself, so I understand the attraction — the competition, the high salaries. But maybe this is a chance for people to rethink — that they ought to become teachers or dentists or scientists or technologists and use their great intellect and skills in ways to create value for society other than through financial engineering. I don’t want to minimize financial engineering, but there are other great ways that some of our minds have not been looking at over the past decade or two.

ABERNETHY: And President Obama has been talking this week, this past week about precisely that — some kind of change in the corporate culture, the business culture. What would that look like?

Dr. MILLER: Well, it’s such an important issue — how can we have a culture, a corporate culture that accents character, that accents the common good and not just earnings per share or a penny more per share per quarter? That’s a new culture. Is it possible that companies can make a decent profit — create wealth, create jobs, provide goods and services for society and maybe even be a moral community to develop its people? I think it can, but it will take leadership that’s committed to a new vision.

ABERNETHY: And when a corporation has enormous power, such power that if it messes up it can hurt the entire country and perhaps the entire world? Should that corporation have a special degree of regulation?

Dr. MILLER: I’m reluctant to pick out or single a particular corporation, but certainly, and we’ve done it historically, certain industries—the energy industry, the communication industry—some are so big and so important that we do regulate them. I don’t know yet if the problem with our current financial meltdown is that we need new regulation or that the existing regulators didn’t do their job — the SEC, the ratings agencies, the actuarial firms. A lot of people could of caught this and didn’t. Certainly people need to do their existing jobs better as far as oversight is concerned. Whether we need new regulation — the jury’s out on that.

ABERNETHY: You, as I said, you used to work in the financial business. What do your friends there, the friends that you have who’ve worked there — what do they tell you about what went wrong; how they feel about it; what they might have done wrong?

Dr. MILLER: Yeah, I work with a group up in Greenwich, Connecticut—we were known as the hedge-fund capital of the world—a group called Greenwich Leadership for people trying to connect their faith and their work and their morals and their values. Some people feel a bit beleaguered by the current situation, because they love their job and they’re good at it, and they are trying to do it in a moral, ethical way and create liquidity and creative instruments for companies. Others, however, realize they’ve bought into something. They’ve almost become addicted to the power and the money. One friend who recently was laid off by AIG, is part of their troubles, privately said he felt that he had made his company his false idol, if you will—that work had become, in his company that he is very proud of actually, had become a false idol, and he was now trying to reorient his life to have balance where faith, family, and other priorities, including his work, would have the right balance, the right perspective

ABERNETHY: David Miller of Princeton University, many thanks.

Dr. MILLER: Thank you, Bob.