In Short

Traditionally, Houses of Worship (HoW) have been beacons in their communities.  In recent years, the attendance of HoW has been declining.  In 1999, 70% of Americans were members of a HoW whereas the current number is 50%.  On top of that, Covid-19 brought already declining attendance to zero and critically sharpened the needs of many HoW that rely on donations of their members.  

Often, HoW are buildings with a large footprint.  Although they are a blessing for flourishing congregations, they often become a liability for the declining ones.  HoW are left with a hard decision whether to close their doors and end their mission in the community. 

Pre-Covid-19 the average Banks’ underperforming loans percentage  was approximately 1%; during the Great Recession the number was 5%.  At that time, close to 5000 HoW had been closing each year.  Hundreds of HoW were sold after defaulting on their loans where 90% of the sales were foreclosures.  

Banks that hold loans with HoW that are declining have one of two choices:  they either continue holding the risky loans on their balance sheets or foreclose on the HoW.  The impact of foreclosure on communities is devastating, and banks are often criticized for making strictly business decisions.  

The instability of HoW has a spillover effect on the communities that host them.  A HoW is usually an active participant in its community offering family-friendly services such as childcare, pre-school, ESL classes for immigrants, or community kitchens.  Once a HoW is unable to address these needs, there is an immediate void which is difficult to fill.  

Foreclosures on these large buildings put a stain on the community.  The neighborhoods become less attractive to families and more attractive to crime.  

HoWs are overlooked by impact Investors although approximately a 1/3 of HoW are located in OZs.     ​