Public assistance’s promise as a support for meeting basic needs is regressing. (Brady and Lee 2014; Häusermann and Palier 2008). In 2016, more than 12 % of the US population lived below the poverty line, currently $20,420 for a family of three (Semega, Fontenot, and Kollar 2017; U.S. Department of Health and Human Services 2017). Individuals and families that live even slightly above the poverty line can find it difficult to pay for housing, food, education, and health care (Mutchler, Li, and Xu 2016; Putnam 2015). Exacerbating families’ financial challenges, general (public) assistance that was provided by state governments has almost disappeared. Programs to help people get out of poverty are underfunded and underrepresented. With the current political climate, there is little evidence that the poor will receive more government-sponsored resources. We see these reductions in government-supported welfare options for the poor as a shift from the era of the pseudo-welfare state to the New Public Management (NPM) age. When NPM emerged, it called for public efficiency that mirrors the private sector (Andrews and Steven 2013). As a result, federal and local government shed some social welfare responsibilities, which increased use of contract welfare providers (Kumlin 2007). One aspect of NPM is cross-sector collaboration in the area of public service delivery (Kettl 2006; O’Leary 2015). This brand of NPM calls for the extension of public services delivery to non-public partners and citizens (Emerson, Nabatchi, and Balogh 2012).
The poor continue to experience poverty (e. g. social inequality, inadequate income), while the public sector is not in a mode to form new welfare services. Given concerns of insufficient income, health care affordability, and the capacity to meet basic needs, people within the United States will continue to seek support from nongovernmental resources (Delaney and Thompson 2016). Historically, in the dearth or absence of governmental support, civil society organizations (e. g. nonprofit organizations, local religious organizations) provided resources for those in need (Bluhm, White, and Chow 2003; Laudarji and Livezey 2000).
Rather than government taking sole responsibility to care for the inhabitants of the country or city, civil society organizations assist in the process of policymaking and service delivery (Kingsley and Gibson 1997). A lag exists between creation and implementation. As a result, the poor suffer as policies are presented, debated, and even rejected. In many cases, religious congregations serve as surrogates in the times where the government is debating and may subsequently fail to support the poor. Issues such as health care and minimum wage debates, the poor are constantly left out of the discussions and have to deal with the repercussions of the decisions. However, religious congregations have the opportunity to help people go beyond poverty and reduce the amount of people having to wait on governmental decisions that could change with the next congressional election.
From the Clinton administration to the Obama administration, religious congregations helped care for the poor (White House Office of Faith-based and Neighborhood Partnerships 2016; Wright 2009). Religious congregations are organizations led by people with a shared faith tradition and spiritual purposes (i. e. worship, pray, socialize, support) (Brooks and Durfee 2003; Ammerman 2009). These traditions and purposes exist both within their closed groups and spreads outside to their immediate and extended communities. They are also a part of the civil society that provides services to help support people experiencing poverty. Congregations provide an amalgam of services— (1) affordable childcare for working adults; (2) food for needy people; (3) cloth people when winter approaches and have thrift stores year round; (4) provide school supplies; (5) help with paying bills (e. g. utility bills, rent); and (6) offer space for support groups (i. e. 12-steps groups, crisis counseling families) (Chaves 2004; Cnaan et al. 2006). In short, congregations’ work complement government efforts by helping poor people survive within poverty, but they do not directly work on alleviating poverty.
More than most civil society agencies, religious congregations aim to ameliorate the pain of poverty (Cnaan and Curtis 2013). These services, however, are often not intended to move poor people out of poverty, but to make the experience more manageable. With the 2016 election of more conservative leaders in all branches of government, meeting social needs will likely not come from extended government services. Viewing religious congregations as a part of the civil society, the response to the seemingly inevitable trend of poverty and rise in social needs is to provide ideas for religious congregations to address these concerns. The question we pose in this paper is simple: As a part of the civil society, how can religious congregations address poverty in a way that moves beyond temporary management of its symptoms to broader alleviation of it as a whole?
Unlike traditional organizations in civil society, religious congregations must abide within theological, social, and organizational frameworks. Before reviewing religious congregations’ options for alleviating poverty, this paper highlights theological tenets centered on moving beyond poverty management to poverty alleviation. This portion is added as a support for religious congregations to reference as they discern whether to be a part of shifting to a more alleviative approach to poverty. What we present is a rarely highlighted set of theological dicta calling for poverty alleviation. Ideally, congregations will focus on these poverty alleviation theologies that convey moving beyond supporting poor people to changing the economic status quo. Subsequently, the paper will focus more on the approaches—community development and financial development—for religious congregations to consider for addressing poverty alleviation in the age of new public governance.
2 Theology and Social Response
Religious congregations are faced with working under both theological and social ethics. While this is not a theological or religious comparison paper, it is important to understand that theological tenets are often the guiding principles within various faith traditions that determine engagement with the poor. There is not always full agreement on how much congregations should provide support, even within the same religious tradition. Therefore, this paper gives a brief overview of poverty alleviation concepts within different religions. We do not intend to give an in-depth telling of religious histories and all of their intricacies, but to highlight how some primary and secondary religious texts support poverty alleviation.
This concept of congregations helping to shift people out of poverty must start with their theological focuses, as it grounds much of their actions and initiatives that they support. Therefore, this section of the paper discusses some theological tenets that are important to several religious traditions in the United States as congregations may require theological reasons to move forward with some of the suggestions posed later in the paper. Clergy who wish to transform their congregations from only supporting poor people and mitigating the pains of poverty to active poverty alleviation would need appropriate theology. Many clergy observe the “For the poor shall never cease out of the land” principle, rather than we can help people out of poverty. In order to stress the link between theology and poverty alleviation, we briefly introduce poverty alleviation theologies of four major religions in the US— Buddhism, Christianity, Islam, and Judaism. Primary and secondary sources are used in the next section to highlight some of the theological tenets that align with their religious traditions, but may not be discussed as often as poverty management rhetoric (e. g. feeding and clothing the needy).
A key focus of Buddhist thought stands against the concept of allowing poverty or conditions where basic needs systematically go unmet. Buddhism is not anti-wealth, but centers itself on the importance of people having enough resources to live a life with dignity. A secondary telling from Presmasiri (1999, 1) notes that, “the ultimate goal of Buddhism is the conquest of the miseries of existence” which would include poverty because it impedes on the ability for people to exist in a world that ensures adequate food, decent housing and health, all of which poverty consistently threatens. However, Buddhism highlights poverty as a concern of distributive economic justice, which makes it difficult for people to live their lives free of hunger, homelessness, and disease (Loy 2001). Buddhism seeks to ensure that some people do not have extreme excess while others have insufficient resources, as disparity directly conflicts with a peaceful society. As a result, Buddhism supports “the elimination of poverty needs to be demonstrated by the establishment of a society free of crime, social tensions, wars and conflicts where people can live in harmony, friendship, and peace” (Premasiri 1999, 5)
Buddhist tradition proposes the need to provide food, housing, and health. These are basic conversations that may happen within Buddhist temples. Reminding Buddhist congregants of their commitment to anti-poverty and how systems can be changed through their own actions can shift the discourse within Buddhist traditional conversations and acts of benevolence.
Christianity is known for its congregations’ affinity toward charity (e. g. food pantries, holiday baskets), which are largely reserved for the poor. Following the notion of helping the poor, widow, and orphan, there is a concern for caring for those in need as a core tenet of Christian faith. Assessing Biblical text, in both the Old and New Testaments, there has always been a reprimanding of governmental leaders and the rich for taking advantage of the poor, especially when it came to preventing them from obtaining their own financial independence (Blomberg 2012). Carried over from Jewish tradition, Christians share stories about farms and land being returned to families every 50 years, known as the Year of Jubilee. This tradition ensured that losing land or making a financial mistake would not doom a family into poverty in perpetuity. As a result, Jubilee restored economic independence back to families, in a way similar to our modern concept of poverty alleviation (Anderson 2005). For the purposes of this paper, Jubilee is highlighted in the Christian section, as it was most recently used as an option to end international poverty. In the late 1990s, Christian groups around the world petitioned the World Bank and International Monetary Fund (IMF) to consider a Jubilee Year in 2000, where policies were implemented for countries that owed much of their debt to richer nations could be relieved of debt (Berger 2003).
In an effort to expand beyond charity, the concept of a social theology is closely linked to poverty alleviation. Twentieth century theologian Walter Rauschenbusch is known for advocating for Christian churches to refocus their morality toward the social realm, which was later coined the “social gospel.” In discussing poverty, Rauschenbusch (1907, 304) argued, “other organizations may conceivably be indifferent when confronted with the chronic and acute poverty of our cities. The Christian Church cannot.” The social gospel has expanded to focus on “curbing the excesses of industrial capitalism, improving conditions for workers, creating at least a minimal social safety net for families, and ameliorating structural inequities in American political and economic life” (Matthew 2009, 194). Not all Christian congregations follow the same social gospel tenets. There are, however, many Christian-based, theological tenets that align with an affinity toward poverty alleviation. Despite the differences of opinions within denominations, poverty alleviation is a core Christian tenet that is a starting point for taking action. While this paper does not propose that Christian congregations should rally toward a Jubilee Year, the key focus is for congregations to see that their theological tradition supports action that takes people out of poverty.
Similar to Buddhism, the Islamic faith is not opposed to wealth. However, there is a moral imperative to support those in need that ranges from general charity to a requirement of donations that help alleviate poverty. A common story assertion shared from the Prophet Mohammad is that people who sleep peacefully while their neighbors are hungry are not connected to the faith. Additionally, some Muslim children are taught that Ramadan, the time of sunup to sundown fasting, is a time to remember the poor who have to go without eating (Jones 2008). This view of Ramadan is seen as a way to prepare children to observe the other practices of the Islamic faith, such as zakat, which is almsgiving. Zakat is explained as a practice in which “you have to seek out people who are less fortunate than you. For most Muslims, it’s around 2 ½ percent of your wealth” (Jones 2008, 137).
At the nexus of the Islamic faith, there are historical reports that “Zakat, Sadaqah (charity), Waqf (donation) and Qard Al-Hasan (loan nonprofit) were practiced to reduce poverty in the time of Prophet Mohammad (PBUH) and his companions” (Aziz and Mohamad 2016, 573). One of the most well-known concepts are the waqf (which work similarly to trusts) where the wealthy place money for the poor. However, a key component of the waqf is that the wishes of the person who donated the money had to be followed exactly, despite the changes in the situation. Over the last several decades, there has been a push to use this Islamic ethical concept of perpetual charity more expansively, such as towards projects that include poverty alleviation as a chief operative and using waqf funds more flexibly (Sadeq 2002). The aforementioned historical concepts have formed the basis of the attempts to alleviate poverty by Islamic countries and Muslims. Segments of Islamic faith can support actions that lead to poverty alleviation.
Charitable giving is a large part of the Jewish faith tradition, which is recognized by the Hebrew word “tzedakah.” Tzedakah is charity with a moral obligation that “recognizes and respects the dignity of the person who is being helped-which is also, obviously, a requirement of justice” (Walzer 2011, 73). Jewish tradition promotes shifting from giving money to a stranger to journeying with a person to ensure that they are no longer impoverished. In modern Judaism, the concept Tikkun Olam, “fixing the world,” (Dorff 2007) is of great importance. Judaism accepts that the world is in a state of disrepair and with human suffering that needs to be fixed (Lee 1990). Many Jewish people, especially young and non-Orthodox, assume that in the context of post-modernity, they are called to help alleviate poverty and redress societal injustices. This modern “fix the world” approach aligns with the historic traditions of extending beyond simple charity.
The Jewish scholar Maimonides who lived in the twelfth century formulated eight levels of charity. At the top of the list is what is known as the concept of “teaching a person to fish rather than giving him a fish to eat.” The translation of the highest level of charity is as follows: “The greatest level, above which there is no greater, is to support a fellow Jew by endowing him with a gift or loan, or entering into a partnership with him, or finding employment for him, in order to strengthen his hand until he need no longer be dependent upon others” (Maimonides, n.d., 1) The idea is to help a person become productive and able to sustain themselves. According to Maimonides, helping people out of poverty is superior to assisting. This worldview is not innovative in the Jewish theology, but is held in high regard. Maimonides predicated his articulation of stages of charity on previous rulings and doctrines of interest free loans to support self-sustainability. The ancient scholars who interpreted the sacred texts in the Mishna and the Talmud already set the charity bar high and called for help that changed life’s trajectory of the poor. While the aforementioned stories are nestled within the Jewish tradition, they are not always the stories shared during religious services. If these stories were shared and paired with poverty alleviating projects, then the discourse and future actions could be changed. Ideally, this could benefit their religious community, the people that have been supported, and the larger society.
2.5 Theology Overview
The above sources indicate that economic justice is an important tenet across religious traditions. Theology “influences [their] social values, political agendas, attitudes on issues and candidates, and, not least, feelings about political activity” (Guth et al., 1997, 43). However, theology is often a choice within any faith tradition. What faith leaders prefer to emphasize at any given time may influence their adherents’ behavior. Some faith leaders would prefer to see their congregants’ role regarding the poor as limited to providing basic needs. Others would emphasize the role religion should have in poverty alleviation by providing ways to make money (e. g. job provision, lobby for policy changes). Our response to the seemingly inevitable trend of poverty and social needs provide ideas for religious congregations to address the concerns connected to poverty alleviation. These following examples seek to align with the aforementioned theological beliefs and have the capacity to move people out of poverty.
3 Faith Community and Poverty Alleviation
Religious congregations are called to be active participants in poverty alleviation (Cnaan and An, 2016). As we noted above, congregations are more accustomed to helping people live with poverty than actively helping with poverty alleviation. Therefore, in this section, we address poverty alleviating options under two key approaches which can and should overlap: (1) community development and (2) financial development. Community development consists of projects taken out by congregations to build enterprises or coalitions that offer employment or job opportunities and also participation in protests and campaigns for economic justice. These are activities that are conducted outside the congregation and benefit the community. Financial development is conducted internally. They teach and enhance financial skills and debt-free practices with a focus on congregational members.
Interest in this research began with congregational observations in Philadelphia and Pittsburgh. Upon those visits, poverty alleviation initiatives were identified (e. g. social enterprises and anti-debt campaigns). Subsequently, we conducted a literature review on congregational involvement in poverty alleviation. Additionally, we consulted with five experts on innovative programs. We compiled a list of community development and financial development approaches that seek to alleviate poverty and align with the theological tenets of religious congregations of different faith traditions and denominations. The list is not exhaustive, but provides examples for congregations that are willing to actively engage poverty alleviation. We were careful not to include the work of faith coalitions or denominations, but only activities carried out by local congregations.
Depending on the congregation, some will want to focus on a more macro level that affects more than a couple of people in the community. Poverty is largely connected to a lack of policy, which are addressed via community development approaches (i. e. social enterprises and community advocacy). On a micro level, members and interested community residents can help themselves via financial literacy programs, investment clubs, debt-free campaigns, and credit unions. The following examples are from Christian congregations, but have transferable qualities for all religions and faith traditions.
4 Community Development Approaches
Religious congregations are a part of communities (e. g. neighborhoods, city initiatives) that support the life of individuals. However, faith traditions, particularly Christian and Jewish faith traditions, require that they go beyond their personal needs and engage in work that helps others. Therefore, community development approaches such as creating enterprises provide congregations with the opportunity to support themselves by earning an income. The following approaches are initiatives that can be modified to align with the goals of many congregations, as they seek to create congregation-based projects. Additionally, the community development approaches can bring congregations and other community associations together in the effort of poverty alleviation.
4.1 Congregations and Social Enterprises
Using the logic of social enterprise, congregations can open a small business that provides local people with job experience. There is not complete agreement on the definition of social enterprises. It is, however, assumed that social enterprises are businesslike organizations that generate income by charging for products or services, while maintaining both a social and economic bottom line (Peattie and Morley, 2008). Religious congregations can be used as examples of being involved in such social enterprises (Krinks, 2016; Oham, 2015). The following are a few examples of social enterprises carried out by religious organizations.
4.1.1 Everyday Café
An example of a congregational social enterprise is ‘The Everyday Café’ a coffee shop established by Bible Center Church, in Homewood, Pennsylvania—the poorest neighborhood in Pittsburgh. On November 18th, 2016, ‘the Everyday Café’ opened. The café offers the delicacies of posh coffee shops paired with breakfast and lunch options. Additionally, the cafe provides a community meeting place with free Internet service. As Pittsburgh’s first cashless café, it only accepts electronic payments to reduce robbery and crime. The employees are neighborhood youth who gain work skills and work history, as well as college and university students looking for financial opportunities during vacations. While this endeavor seems out of reach for most congregations, it is achievable through private funding. The church was awarded financial support from local foundations to pay for start-up costs. Any profits made from the café are planned to finance after-school services run by the church. In addition to bringing a new enterprise to the neighborhood, the café brought innovation, crime reduction, and financial opportunity.
4.1.2 Homeboy Industries
Most famously, Homeboy Industries in Los Angeles, CA has been operating for more than 28 years (Boyle, 2010). It is known for finding and creating employment for poor, seemingly unemployable gang members. Started by Jesuit priest Father Gregory Boyle, Homeboy Industries seeks to reduce gang violence and find alternatives to activities that contribute to mass incarceration. Over the years, it has employed thousands of ex-gang members, many of whom moved on to find other jobs. Currently, Homeboy Industries has numerous employment opportunities (e. g. bakery, coffee shop, screen-printing and embroidery, catering).
4.1.3 Belay Enterprises
Another well-known social enterprise is Belay Enterprises, a faith-based nonprofit in Denver, Colorado. Belay Enterprises provides vocational training for people recovering from addiction, experiencing homelessness, and returning from prison. In 2015, 75 people worked in Belay’s businesses, such as its home improvement thrift store. Belay realized over half a million dollars in revenue from sales. All profit is earmarked to create new businesses that will enable more people to be employed or trained.
While there are numerous examples of large social enterprises, many are not associated with congregations. Some social enterprises, like Homeboy Industries, are run by clergy and maintain a spiritual atmosphere, yet label themselves as non-religious. This disassociation may make it harder for some religious congregations to commit. Additionally, starting such operations can be difficult for congregations, particularly those without large endowments. However, the concern of reduced resources is common for traditional non-profit organizations, and can be overcome (Smith and Phillips, 2016). In considering some of the previously mentioned concepts within this paper, it is clear that community-based funds within religious congregations can be utilized to fund other poverty alleviation ventures. Using waqf funds, for example, mosques and other nonprofits could pool resources to build enterprises that are important to the needs of people while serving as an opportunity to collaborate with nonprofits, philanthropic organizations and other congregations to create opportunities within communities. Any congregation that establishes a social enterprise that provides people with new employment opportunities can be instrumental in poverty alleviation.
4.2 Community Organizing
Community organizing is at the heart of many policy changes that address the concerns of people within a specific community. The work of community organizers is to rally people to identify and create a plan to address the needs of the community. Larger organizations utilize faith-based groups, such as religious congregations, to garner political power among people within their own communities to address specific policy issues (e. g. health care, jobs, and education). Ideally, the professional organizers from national networks (e. g. Gamaliel Foundation, Industrial Areas Foundation, National People’s Action, and PICO National Network) help religious congregations push policy efforts for change in their communities. One or all of the aforementioned professional organizing networks have local federations within different regions across the United States.
Many organizers are associated with protests and hold meetings with political leaders to discuss pressing topics. However, there are also many community organizers who follow the Saul Alinsky model of working with the community to ensure that all issues of the community are heard, and their key concerns are met and solved by community members (Wood and Fulton, 2015). The beginning process often requires that community organizers train the involved community members about the history of the concerns that they seek to address. Afterwards organizers engage community members around topics such as political elections and lobbying techniques, to create an organized approach on how to mobilize people to act. In the best situations, the organizers from the larger organizing groups “have organized and trained long-standing teams of leaders in communities that previously suffered from a lack of effective democratic representation” (Wood and Fulton, 2015, 11). Wood and Fulton (2015) also report that in the past two decades, faith-based coalitions (where congregations are the majority) focus more on racial and economic justice. They call upon local, state, and federal governments to make poverty alleviation policies.
While the work of community organizers seems more political than many religious congregations acknowledge, faith communities frequently serve as a front-line response, after governments leave many of the basic needs of the poor to individuals and nongovernmental agencies. Therefore, a feasible option for congregations is to connect with one of the community organizing groups to address the issue of poverty alleviation from a political perspective. The following is an example from the City of Philadelphia and a PICO National Network local federation, Philadelphians Organized to Witness, Empower & Rebuild (POWER). POWER is a faith-based organizing group of religious congregations in the greater Philadelphia area that addresses social issues that are identified by the community. The work extends to political issues, such as redistribution of wealth and economic justice, which are closely connected to poverty alleviation. In 2014, the group organized workers and leaders within the community to rally around the issue of minimum wages for contract workers at the Philadelphia International Airport. The contract workers made an average of $7.85/hour with the Pennsylvania minimum wage being $7.25/hour (Jones, 2014). Despite being 60 cents above the minimum wage, the workers were surviving below livable wages. Following negotiations, the airports contractors’ hourly wages increased to $10.88/hour (Christman, 2014; Jones, 2014). Additionally, the $10.88/hour is set as a standard for any future subcontractors for the City of Philadelphia. Nonetheless, POWER and religious congregations are organizing to increase the minimum wage in Philadelphia to $15.00/hour.
The type of work that organizations like POWER are able to accomplish is important in changing policies that directly affect lives. Additionally, the affiliation with such organizations allows the faith community to do important work in coordination with other congregations and community members.
5 Financial Development Approaches
With financial development opportunities (e. g. entrepreneurship, financial investing), targeted to middle to upper-level classes, the poor tend to be left out of those prospects. This is an opportunity for religious congregations, such as Buddhist and Islamic faith traditions, to address economic inequity. Some initiatives could include increasing financial literacy, enhancing investments and reducing debt. These financial development approaches are appropriate methods for religious congregations to help the poor and abide within their faith tradition.
5.1 Financial Literacy
Financial literacy is an important aspect to alleviate poverty. While a large part of poverty alleviation is having enough money, it is also critical for people to learn to manage their existing money and any future increases. There is literature about congregations providing financial literacy courses (Sheppard, 2016).
Some credit union representatives also have programs that teach people about financial literacy. While it is important to focus on economic justice or distribution of wealth, it is equally important for people to understand how to best preserve their own resources. Therefore, the work of financial literary remains important, particularly as the poor suffer the most from financial illiteracy (Klapper, Lusardi, and Van Oudheusden, 2015). According to the Standard & Poor’s Global FinLit Survey of 2014, “33 percent of adults worldwide are financially literate” (Klapper, Lusardi, and Van Oudheusden, 2015, 7). However, there are opportunities that are provided for free to help families get out of debt and prepare children to avoid it, as they face a future where they will likely be responsible for much of their welfare (e. g. health care, retirement, education).
The Cecil Murray Center for Community Engagement (2017), based in the Center for Religion and Civic Culture at the University of Southern California, operates a financial literacy program designed for leaders of faith communities. Clergy, congregational staff, and lay leaders are trained to facilitate financial literacy courses within their congregations and communities. The curriculum includes non-profit leadership, fundraising, bank financing, investments, home ownership, and credit repair. Bringing a financial literacy course into the congregation can be key for the economic development of congregational and community members.
In addition to focusing on adults in these financial literacy programs, there are many financial literacy curriculums for adolescents. For instance, Jump$tart is an organization centered on providing financial literacy training for youth ranging from elementary to high school age (5–18) (Jump$tart Coalition for Personal Financial Literacy, 2017). Many studies report that the earlier children are introduced to the tenets of finance, the more they understand as adults, which could lead to a reduction in poor financial decisions or devastating effects during financial downturns (Drever et al., 2015; Jorgensen and Savla, 2010; Lai, 2010). With only 50 % of the population in developed countries being financially literate, it continues to be a key component in the work of poverty alleviation (Klapper, Lusardi, and Van Oudheusden, 2015). While financial literacy opportunities exist, many people do not make enough money to save or invest enough money to escape poverty. Thus, disparities in income distribution are a core reason to have religious congregations focus on both income disparity and poverty alleviation (McCarthy et al., 2016).
5.2 Investment Clubs
As noted above, many poor people and people without access to the financial sector are excluded from making prudent financial decisions. Furthermore, they are uneducated regarding wise investing. In order to address this aspect of financial exclusion, some congregations offer the opportunity for investment clubs. Investment clubs are groups of members who combine their money into a large pool to invest in stocks and bonds. Clubs are usually organized as a partnership of about 15 people. The members agree on a monthly (or other period) investment amount. Shanks, Boddie, and Wynn (2015, 70) suggested “by investing small amounts consistently over a long period of time, investment club members often are able to amass sizeable portfolios within the club on their own.”
Some groups have a leader who is an investment expert, while others are composed of only members. It is common in many investment clubs for the organizers to teach the participants about the nature of investment and core investment concepts (e. g. compounded interest, stock, stock options). Members often review their portfolios, discuss new stock ideas, and make joint decisions regarding buying or selling stock. In some groups, once a member’s portfolio reaches a certain value it is often assumed that this person will start investing separately from the group. Yet, in many cases the group bonds and people decide to stay with the group and keep investing collectively.
Congregations are settings where members may have higher levels of trust with each other. The average investment club has a value of $15,000 per year (Cox and Goff, 1996; National Association of Investors Corporation, n.d.). A report by Cnaan and Partners for Sacred Places (2016) indicates that in a study of 90 congregations, three of them (3.33 %) reportedly held investment clubs. Given the economic opportunities of investment clubs, we suggest that more congregations offer them to their congregants.
5.3 Debt-Free Campaigns
While religious congregations are known for conducting fundraisers and debt-free campaigns for their building maintenance and special initiatives (e. g. college scholarships, disaster relief), helping congregants to reduce their own debt is imperative. The concept of allocating money within congregations is not new. However, there can be an impactful shift where congregations can create the space for debt-freedom to be a supported tenet. This is a message that is important for both those in dire poverty and the middle class, who are often affected during economic downturns. Many poor and middle class people who accumulated large debts are unable to apply for mortgages and are forced to remain as renters. Therefore, it is critically important for congregations to be supportive in helping congregants eliminate their debt.
In the city of Philadelphia, the pastor of St. Paul’s Baptist Church stands before her congregation to celebrate key milestones on the first Sunday of every month. The main celebration is birthdays and wedding anniversaries, but she also makes the call for celebration of sobriety and debt-free statuses. The latter two topics are not as common within congregations, but it is important to see that there are congregations thinking about the importance of debt freedom. Celebrating debt-free status from credit card debt or student loans are also important, as they are great hindrances to poverty alleviation for many people. Student loan debt is oftentimes noted as a “good debt,” because people are hopefully employed with better jobs than they would without the degree. However, in the event of an economic downturn and, given the desire to overcome poverty, all debt is a hindrance that must be addressed. In fact, over 40 million people in the United States have approximately $1.3 trillion in student loan debt (Friedman, 2017).
Beyond student loans, many people amass astounding amounts of credit card debt. Hill (2014) reported that Christ Our Redeemer AME in Irvine, CA, called for members during a Sunday sermon to take scissors and cut up their credit cards. The pastor explained that many congregants do not understand the concept of accumulated compounded interest and their debts keep growing. The temptation of getting today and paying tomorrow is enticing, however, high interest rates put people in debt. To be debt-free, the pastor of Christ Our Redeemer and many others across the country encourage people to avoid their credit cards and live according to their means. While understanding that most people cannot survive without some level of debt, congregations can start small groups on debt management led by professionals from local credit unions or financial groups. Ideally, the congregation ensures that the speakers are not there simply to sell products, but to help people create plans to reduce their debt. Similar to mortgage burning celebrations at congregations, the congregants can “burn” their own debt.
5.4 Credit Unions
Credit unions were briefly mentioned above regarding financial literacy. In addition to being a component of financial literacy, their nature and frequency within congregations set them apart as an important method for poverty alleviation. Commercial banks make their profit by levying charges on financial transactions and charging interest on loans. For customers with good credit and enough money deposited in the bank, many charges and interest rates are waived or lowered. The poor and almost poor, however, are disproportionally charged with the highest transaction costs and interest rates on loans (Goldsmith and Martin, 2014). Commercial banks justify the higher fees by labeling most poor people as a higher defaulting risk. One important alternative to this financial impediment is to form credit unions.
Credit unions are member-owned financial cooperatives. They are democratically controlled by its members and operate with low costs, while providing competitive rates. Salaries of the credit union are modest in comparison to their counterparts in the private sector and profits are not distributed to owners, but are used to benefit the members (MacPherson, 1999). Credit unions alone cannot uplift a large amount of people out of poverty, but they are capable of lowering the cost of financial transactions, providing advice about financial literacy, and offering alternatives to both commercial banks and pay-day loans (Klein, Laczniak, and Santos, 2017). By working on a no-frills model, credit unions are the only financial institution to regularly provide poor people with bank accounts, check books, and debit and credit cards. Min (1992) reported that one of the appeals of Protestant churches to new Korean immigrants is their credit unions. Some faith-based institutions, such as the United Methodist Church, operate a denominational credit union that assists both members and congregations. Henry G. Cisneros, who was Bill Clinton’s Secretary of Housing and Urban Development, (1996) claimed that credit unions by churches are important tool for providing mortgages. Alone or in collaboration with other congregations, credit unions can be tools to help many low-income people while also supporting the congregation financially.
Congregations are frequently seen as first responders to the needs of the public, particularly the poor. The wide geographical distribution of congregations and their physical proximity to people in need paired with connecting to charity, make congregations highly involved with the poor. The question we posed in this article is simple: As a part of the civil society, how can religious congregations address poverty in a way that moves beyond temporary management of its symptoms to broader alleviation of it as a whole? We started this article showing that, theologically, many world religions call for adherents to help people out of poverty. The famous phrase, “teach a person to fish rather than give a person a fish,” is the foundation of poverty alleviation. The drawback of poverty alleviation from a congregational perspective is that it is a process that takes time and can often fail. In contrast, feeding poor people is immediate and instantly gratifying.
The reality is that congregations often extensively help people living in poverty to cope with the travails of living a life where their needs have not been met. In order to shift the discourse towards poverty alleviation and changing the social order, we searched for models of congregational activities that are geared toward poverty alleviation. These programs are limited in number and are carried out by few congregations. Yet, if these activities were to be replicated widely, then the picture of poverty in America could be dramatically different.
Poverty is largely maintained via a lack of inadequate policy or policy implementation. Congregations have and can continue to progress in times when policies and their implementations are slow to serve. However, the work of congregations will hopefully lead to poverty alleviation of the poor and serve as a guide for policy making. In fact, future research should assess the types of governmental policies that could support congregations as they work to alleviate poverty.
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About the article
Published Online: 2018-03-23
Published in Print: 2018-03-26
Citation Information: Nonprofit Policy Forum, Volume 8, Issue 4, Pages 391–410, ISSN (Online) 2154-3348, DOI: https://doi.org/10.1515/npf-2017-0013.
© 2018 Scott and Cnaan, published by De Gruyter. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License. BY-NC-ND 4.0