Churches need to focus on prevention as well as cure to address debt epidemic
New research on church-based debt and money advice schemes suggests there is a great opportunity for more local churches to get involved, with demand far exceeding capacity ...
Latest research from Jubilee+ covering interviews and surveys with 120+ UK church respondents on the impact of church-based debt and money advice initiatives shows that whilst activities are predominantly connected with crisis debt advice, there is a great desire to spend a greater proportion of time on preventative actions in areas such as financial education.
However, constraints of staff and volunteer resource, as well as finance, mean that demand for services exceeds capacity.
The research suggests church-based initiatives constitute only a small minority share of the free / charitable debt advice that is given in the UK and that there is significant scope for expansion.
Christian-based advice is making a positive difference not only in the lives of people who are heavily in debt and their families but also to lenders, agencies and the community.
A staff member of a debt and money advice initiative said, “The first thing is relief, that someone's actually listened to them...they go out of the door saying, "I feel so much better", even though nothing has changed .... the immediate impact is relief and peace.”
Benefits extend to multiple stakeholders and the financial and volunteer costs borne by Churches generate net benefit for other stakeholders. The benefit for clients who are helped is more obvious, but creditors and public services receive benefits even though their investment and engagement cost with debt and money advice services is comparatively low.
There a number of key recommendations coming from the research:
- Churches not currently involved in money advice should give due consideration to doing so. Aside from the direct benefits for those they help, there is reported benefit to all stakeholders in money advice initiatives. Further, 80% of responding churches who give debt and money advice have found a positive effect upon their wider reputation in the community.
- Local churches should consider expanding their activities in financial education. In particular, there is a new opportunity to assist schools in the delivery of financial education now that the National Curriculum will, from 2014, introduce ‘financial capability’. Some 93% of respondents agree that schools should teach money management.
- Churches should give consideration to partnering with their local Credit Union. Credit Unions offer an alternative lending model and there is considerable concern amongst churches about both the existence and business practices of providers of short-term finance (‘payday’ lenders)
- There is a wider challenge to address the cultural stigma relating to debt issues and financial education. Our survey highlighted that existing church money education initiatives have a poor take-up, which is believed by the churches providing them to be at least in part as a result of a cultural unwillingness for people to share financial matters or admit weakness in money management. The fact that so many individuals with debt issues wait until very late in a crisis before seeking help indicates that there is also a role for the Church to engage on a wider basis with communities to overcome the cultural stigma.
As a debt and money centre client puts it, “Before I contacted the centre, I wasn’t coping with living. We locked ourselves in, frightened of bailiffs and of me talking to anyone. I was ashamed, felt I’d failed my family. I was nervous all the time, tearful and frightened. Now I feel like I’ve had arms wrapped round me. Money problems and debt just destroy people.”
- Policy-makers should make policy changes regarding high interest rate loans and checks on suitability. Whilst it acknowledged personal responsibility for undertaking debt in the context of a culture of falling savings ratios, our research revealed considerable concern with lending practices. Whilst we recognise that a balanced debate around financial service regulation is complex, 90% of survey respondents supported capping interest rates on short-term loans and 90% were of the opinion that it is too easy to obtain money on credit that is unsuitable for personal financial circumstances.
One Church leader comments: "Payday loans should be regulated to make people more aware of alternatives like Credit Unions, interest rates they will be paying, the charges that will be added for even the smallest infraction of the payday loan terms. The companies should not legally be allowed to push people deeper into debt and get rich off the misery of people that are struggling.”
- Churches need to speak out regarding alternative values to a debt-based society. Churches at denominational and local level have a unique voice – one that can speak about biblical values regarding money and debt. We have a debt-based culture – encouraging consumption, instant gratification and materialism. Churches should help provide guidance, inspiration, challenge and support to Government, local authorities, businesses and citizens, presenting an alternative culture, one promoting well-being and wholeness.
As a client of a debt and money advice centre comments, “Banks are a retail industry; you can't go in without being offered a loan, or a credit card or a review of anything ... they're actively encouraging you to get into debt”
- Church-based debt and money advice services can demonstrate even more value if they capture evidence for both ‘hard’ and ‘soft’ outcomes.
Soft’ outcomes, such as improvement in mental health and suicide prevention, where evidence is not universally recorded and is sometimes only anecdotal should be captured by church-based initiatives. The funding model of most church-based money advice is dependent upon voluntary contributions of time and money, yet other stakeholders such as creditors and public sector / charitable service providers receive value well beyond the cost they incur in engaging with the church initiatives.
A debt and money advice manager has the final word, “I think the big impact is the personal impact of coming to a place of peace and knowing that things are under control again.”
The Executive Summary and full report are available HERE
More at www.jubilee-plus.org