National Cathedral Cuts Jobs, Programs

Just six months after its last round of cuts, the century-old institution plans to shut down a historic building on its grounds, cut back on choir performances, shrink its lecture and class schedule, outsource its retail operation and rely on volunteers to take over other functions, the Rev. Samuel Lloyd III, dean of the Episcopal cathedral, said in an interview yesterday.

"This is a very difficult time and it breaks my heart what we're doing with our staff," Lloyd said.

The stone cathedral, whose Gothic towers loom over Northwest Washington, attracted 435,500 visitors last year. It serves as the cathedral for the Episcopal Diocese of Washington and as a symbolic gathering place for the nation. Three presidential funerals have been held there.

Cathedral leaders said that worshipers at the five Sunday services probably will notice only subtle changes -- fewer altar flowers, thinner worship folders. The thousands of tourists who stream through each day will see few signs of the cuts.

But the cathedral's wide variety of other activities -- weekday worship services, lectures, classes and seminars -- that attracts thousands and keeps the building occupied from dawn until well past dusk faces sizable reductions, they said.

The cathedral is self-supporting and does not receive funds from either the Episcopal Diocese of Washington or the national Episcopal Church. Nor does it receive government funding -- a fact that many visitors and potential donors do not understand, Lloyd said.

The cathedral -- the second largest of any denomination's in the United States -- has been battling financial problems for months. After three years of rapid growth under Lloyd, who had launched an ambitious expansion, its financial condition began to deteriorate earlier this year as the economy slowed. In May, in the midst of its centennial celebration year, it laid off 33 employees, reduced its budget by $3.5 million and shuttered its popular greenhouse.

Now, the slumping economy has forced more extensive reductions, said Lloyd and Kathleen Cox, the cathedral's chief operating officer. In all, the cathedral's staffing will fall to 94 once the latest cuts take effect over the next several months -- about half of what it was six months ago. The cathedral's budget in the current fiscal year, which runs until June, will plummet 40 percent, to $14.4 million from $24 million.

"When we saw the issues in the spring . . . we went right to work on them and addressed them as straightforwardly as we could," Lloyd said. "We thought the economy had done what it was going to do, and we'd made the correction we needed to make and we could move on. But we saw . . . as the summer unfolded, that there were some more surprises in the economy in store for us."

The cathedral's endowment, valued last spring at $66 million, has declined about 25 percent since then, Cox said. Cathedral leaders have opted to draw $1 million from it instead of the usual $3.5 million. Anticipating the effects of the economy on all nonprofits, the cathedral is budgeting for a drop in donations and program revenue, even though it is ahead of projections right now. "We're budgeting to be conservative and responsible," said Michael Hill, the cathedral's executive director for external affairs.

To cut overhead, the cathedral plans to outsource its retail operations, which bring in about $4 million a year, to Event Network, a San Diego-based company that runs gift stores at cultural attractions.

Approximately 11 retail workers will be laid off and 30 in other cathedral posts will be let go, officials said. Layoffs are expected to begin today.

Historic programs are facing trims, too. The cathedral plans to shut an adjacent building that houses Cathedral College -- a closing date has not yet been set -- and suspend its 84-year-old residential program for visiting preachers until it can be revived in better times, Lloyd said.

Consultants familiar with nonprofit operations say the National Cathedral's problems are not unique. Many large organizations that rely on endowments and donations are facing cuts because of current economic conditions.

"I don't think anyone thinks this will blow over anytime soon," said Kris Putnam-Walkerly, president of Putnam Community Investment Consulting, which works with philanthropic foundations and nonprofits.

In Sunday's sermon, Lloyd appealed for donations from worshipers. "If you are a part of the cathedral's life, or a friend of the cathedral's in any way, we need your big, generous, ambitious support," he said. "If you have not heard from us yet and we have your name, you will. We will find you."