July 7, 2009
Economy Closes one Relief Group, Forces Cuts at World Vision
International Aid closes while World Vision cuts 75 positions.
A Michigan-based Christian relief group, International Aid, has closed its doors amid financial struggles while World Vision, one of the largest evangelical relief agencies, has eliminated about 75 positions.
International Aid needed to collect about $1.5 million in the past two months to balance its $70 million budget, but only gathered between $150,000 and $200,000, according to CEO Gordon Loux.
"Since we have insufficient funds, the board felt it was prudent to cease operations," Loux said.
The Spring Lake, Mich.-based Christian nonprofit has offered health and humanitarian support worldwide since 1980. Loux said he is in discussions with six or seven nonprofits about rolling some programs into other organizations.
About 40 people were employed by International Aid, roughly half of the organization's staff a year ago. The company also has 32 employees working in Honduras and the Philippines who will be out of jobs.
Meanwhile, about 50 members of World Vision's 1,200-member staff were laid off and about 25 open positions will not be filled, said spokesman Dean Owen.
"We can no longer avoid the painful cost reduction steps that many organizations have already implemented," said Richard Stearns, president of World Vision, U.S. "The efforts of our faithful employees and donors have allowed us to swim against the tide longer than almost any other
Private cash donations, which increased 4 percent during the last quarter of 2008, have begun to decline. In the first quarter of 2009, donations dropped about 3 percent. Between April and June, they were about 18 percent below the previous year.
Despite the drop in donations, most child sponsors "remain loyal," Stearns said, giving about $30 a month that is designated to aid a particular needy child.
Among other cost-cutting measures, World Vision is canceling merit raises for the second year in a row and increasing employees' premiums for health benefits. Owen said the layoffs were the organization's first since 1995.
Owen said the layoffs are only occurring among U.S. staff and should not affect the global work of the organization. "Part of the point of this was to make sure we were able to fulfill our funding obligations to our programs around the world," he said.