The Fair Finance Co. turmoil is affecting the way the memorial rose garden at the historic Pilgrim United Church of Christ in Cuyahoga Falls will be cared for this year.
''One of our families had given $15,000 to maintain the garden and encouraged the church to invest it with Fair Finance because they believed the company had an honest reputation,'' said the Rev. Kirk W. Bruce, pastor at Pilgrim. ''For eight years, there has not been an issue, and all of a sudden, the company is not there.''
Fair Finance, an accounts receivables and consumer loan company, had eight offices in the region that closed after the FBI raided its Akron headquarters and a related business in Indianapolis late last year. The federal government initially indicated that the company was under investigation for a Ponzi scheme. No one has been arrested or charged in connection with the investigation.
Frustrated owners of the company's investment certificates forced Fair Finance into Chapter 7 bankruptcy in February in an attempt to protect assets and recover some of their money. Eighty-five percent of the more than 5,000 creditors holding more than 13,000 outstanding investment certificates (totaling more than $208
million) live in the Akron-Canton area.
Those investors include family college funds, trusts, community cemeteries, fraternal organizations, pastors and more than 16 churches, such as Pilgrim and Greater Bethel Baptist Church in Akron.
The Rev. Melford Elliott, pastor at Greater Bethel, said news of the potential loss of the $40,000 invested by the church in 1999 is unsettling. Elliott, who became pastor of the church in 2001, said the money was moved to Fair Finance after the church took a ''considerable loss'' through an investment program at a local bank.
Elliott said the church took a chance with Fair Finance because the company had a good reputation and longevity in the community.
The company, established in 1934, had a long history of paying higher-than-market rates on its uninsured certificates. The company was sold in 2002 to two Indianapolis-based business executives, James F. Cochran and Timothy Durham.
Neither Bruce nor Elliott recall receiving information about the change of ownership.
''It's disheartening that we had to find out about the change in ownership in the newspaper, and it's discouraging to think that we may have lost this money outright,'' Elliott said. ''We don't really know where we stand at this point. We pray that we can have great resolve. It doesn't look hopeful, but God can do anything. I still believe in miracles. At this point, we need one.''
The money invested by Greater Bethel could best be described as ''rainy day'' funds. Elliott said the money could have been used for outreach and renovations at the church, which will celebrate its 90th anniversary this year.
Much like Greater Bethel, the Northwest Avenue Church of Christ in Tallmadge invested $10,000 in Fair Finance as a reserve. Northwest Avenue's pastor, the Rev. Scott Baker, said it is disturbing for parishioners to give money to the church and have it go to something other than building the kingdom of God.
''If we lose the money, it's not going to devastate us, but those are kingdom dollars that could have been put to good use to help someone in need,'' Baker said.
Economy hurts giving
Baker and the other two pastors agree that the possible financial loss comes at a tough time because the economy has caused giving to churches to decrease. Results of the State of the Plate survey released last week show that nearly 40 percent of churches across the country experienced a decline in offerings in 2009.
This represents the second consecutive year of decreases. While megachurches and West Coast churches were hit hardest in 2009, the research shows that 32 percent of the churches in the Great Lakes region (Wisconsin, Michigan, Illinois, Indiana and Ohio) experienced a decline in giving.
The study, conducted by Maximum Generosity and Christianity Today International, also showed that a growing number of churches increased their giving to help people with financial needs and actively taught biblical financial and generosity principles through sermons, classes and seminars, and volunteer financial counselors and coaches.
Eric Coffman, a financial adviser with Fairlawn-basedPoitinger Redmond Lyons Kura Walker & Co., advises all investors to do their homework before deciding where to put their money. He said consumers can begin by getting a referral from a trusted source and checking with organizations that help consumers protect their investments, like the Financial Industry Regulatory Authority. FINRA (http://www.finra.org) is the largest independent regulator for all securities firms doing business in the United States.
''Oversight is critical. You want to make sure that good, prudent practices are being followed. And you want to know if the rate of return is guaranteed. If it is, you want to know by whom,'' Coffman said. ''And if it sounds too good to be true, it might just be.''
Coffman also suggested that consumers consider the worst that can happen before making an investment.
Bruce said the family that donated the money to maintain the rose garden at Pilgrim thought the worst that could happen at Fair Finance was that the initial investment would be returned. He said the family had been investing with Fair Finance for about 50 years; he knows of at least three families in his church who invested with the company.
The family that gave the money has committed to caring for the garden this year. Bruce said he expects other volunteers to help with the upkeep. He encourages those who invested with Fair Finance to hold firm to their faith, which can take them through good and bad times.
''My heart breaks for the people who have invested their life savings. I think everyone was accepting of reasonable risk and Fair Finance did a very noteworthy job of touting its 75 years of being reputable in the community,'' Bruce said. ''If individuals in the company have done something inappropriate, they should be forced to lose anything of value and spend years in prison. The assets should be distributed among the investors to recoup as much as possible.''
Colette Jenkins can be reached at 330-996-3731 or firstname.lastname@example.org.