What role do faith-based organisations play in supporting people in financial need?

Faith&Finance 2In the current climate of financial austerity, faith-based organisations and charities are making a significant contribution to alleviating poverty and providing welfare support, tackling financial exclusion and advocating ethical products and interest-free forms of credit.

Our research on Public Faith and Finance is uncovering the ways in which different faith organisations are addressing some of the most challenging aspects of the financial crisis and developing initiatives to help people in need. We are particularly interested in finding out what types of faith-based lending and welfare provisions are available to those experiencing financial hardship? What kinds of measures help to address financial exclusion? To what extent do faith and non-faith organisations work with each other to deliver assistance, counselling and support? Does the current policy climate enable or undermine faith-based initiatives?

Drawing on preliminary results from our Survey on Faith and Finance, we are building a detailed picture of the kinds of challenges affecting faith communities and local neighbourhoods. So far, the top three issues affecting communities reported by our respondents are financial hardship, debt and lack of access to sustainable financial services. Depending on local areas, some members of communities are more affected by financial exclusion than others. A clear tendency reported by our respondents is for faith-based organisations to offer support to anybody who needs it – regardless of their religious affiliation or lack of it.

Different forms of faith-based support, campaigning and ethical finance

We are uncovering a great variety of faith-based provisions and interest-free initiatives, as well as strategic partnerships to tackle financial exclusion and reform existing services. Large umbrella bodies and small charitable trusts, credit unions and institutions offering sharia-compliant products, places of worship and community centres are all actively engaged in helping vulnerable members of society.  Muslim, Jewish and Christian organisations, including Al-Mizan Charitable Trust, Interlink and Bethany Christian Trust, are providing small grants to assist with everyday costs of living including education, household items, medical and funeral costs, mobility and subsistence.

With a growing threat of high costs of borrowing and lack of affordable housing, many are turning to faith organisations for advice on money matters and personal indebtedness. Organisations such as Community Money AdvicePaperweight Trust and others are offering advice and counselling for people with debt problems, alongside the Citizens Advice Bureau and Money Advice Service.

Dealing with the consequences of financial austerity is not limited to financial assistance. A number of organisations are creating and promoting foodbanks and providing free meals. The Christian-based Trussell Trust remains the fastest growing foodbanks network. However, minority faith organisations are also developing initiatives and programmes designed to alleviate food poverty, with Sufra Food Bank, Midlands Sewa Langar and Bhagwan Valmik Sabha Bedford being just a few organisations working in this area.

While many faith organisations are supporting people to deal with day-to-day issues of financial hardship, others are engaged in campaigning to reform existing financial arrangements and deliver more ethical services and responsible banking practices, including Canary Wharf Chaplaincy, the Churches and Industry Group, Jubilee Debt Campaign  and the Ecumenical Council for Corporate Responsibility. Some recent campaigns for socially-just and responsible services include the Citizens UK Living Wage campaign, and ‘Your Faith Your Finance’.

Interest-free lending and alternative forms of credit are valued by faith organisations for their spiritual emphasis on sharing and fairness, generosity and a sense of duty. Alternative forms of credit lending are on the rise, including Islamic products such as 1st Ethical’s Halal Money project and Christian-based credit union schemes advocated by Together Lancashire or the Diocese of Hereford. Approaches to ethical finance and justice are also debated by Sikh and Hindu organisations, as evidenced by a recent report by City Sikhs.

Interfaith cooperation and policy engagement: is it working?

Our survey indicates that while some issues, such as personal debt, are believed to be better solved inside one’s own community, there is a willingness among faith organisations to work with other faiths and civil society partners. Cooperation with other faiths or community-based organisations is particularly strong in the areas of sharing information and directing people to available services, campaigning against poverty and unfair welfare policies, such as universal credits, or lobbying for ethical engagement with money.  While multi-faith engagement happens more in the area of campaigning, faith organisations are collaborating with Citizens Advice services or financial institutions to develop forms of financial support. Many faith organisations lack information, however, on what sorts of partnerships are available and how their members can benefit from closer cooperation with each other.

We are also noticing interesting developments in faith-based activities in light of the current policy climate.  Do policies on welfare and finance help or hinder the work of faith-based organisations?  While many of our respondents express a degree of disillusionment with some government policies, including welfare reforms and tax credit cuts, there is support for certain initiatives such as the Banking Reform Act of 2013, or government support for Islamic finance. For example, some of larger organisations have taken part in the Financial Conduct Authority work on payday lending regulation and government consultation on sharia-compliant student finance.

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With just two weeks remaining till our online survey officially closes, have you had your chance to contribute to our research and tell us about your work? What are your views and experiences of faith-based activities and their contribution to financial provisions, welfare support and alternative forms of credit?

Please contact our research team by emailing: katya.braginskaia@bristol.ac.uk

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