The Michigan-based relief group, International Aid (IA), is ceasing operations while World Vision, with its headquarters near Seattle, is laying off staff members and cutting unfilled positions in an attempt to balance their budget.
The financial struggles for Christian relief groups are due to the decrease in donations and difficulty in raising support in this economic climate.
IA's Board Chair Roger Spoelman said the board voted July 2 to shut down the agency.
"While this was a tough decision for all of us who believe in the mission of the organization, we simply do not have the resources to continue even another day," said Spoelman.
IA acting CEO Dr. Gordon D. Loux informed the agency's 40 U.S. employees July 2. The shutdown also immediately affects 32 employees in Honduras and the Philippines according to IA's press statement.
Loux said the agency would continue shipments of medical equipment and supplies. He said he would be working with vendors and creditors affected by the shut down as well as notifying the agency's corporate and other partners.
In an attempt to balance its budget, World Vision is also reducing employee benefits and is freezing wages for the second consecutive year.
"We can no longer avoid the painful cost-reduction steps that many organizations have already implemented," World Vision U.S. president Richard Stearns, said in a prepared statement. "The efforts of our faithful employees and donors have allowed us to swim against the tide longer than almost any other non-profit."
World Vision is expecting a $39 million shortfall in donations; however, income from child sponsors remains strong.
"This is a time for us to come together in prayer for one another, asking for God's grace as we deal with the impact of the hard decisions that we have had to make," Stearns said. "We have an opportunity and responsibility to model Christ-like attitudes and behaviors in the midst of troubling times and to stay focused on World Vision's mission to which we've been called."
In fiscal 2008, 87 percent of all donations to World Vision in the United States were used for current and future ministry programs, including overseas relief and development programs, as well as U.S. projects.
Founded in 1980, International Aid provided health care services, technology, training and supplies to the poor in developing countries around the globe in addition to emergency aid for those affected by natural disasters.
International Aid has provided help and critical resources to millions in response to disasters like Hurricane Katrina, the 2004 tsunami, and 9/11.