Church of the Brethren to spin off craft business New Windsor service to turn independent

November 01, 1998|By James M. Coram | James M. Coram,SUN STAFF

The Illinois-based Church of the Brethren has decided that a $5 million-a-year New Windsor handcraft business that supports Third World artisans should make it on its own.

The church's general board voted 18-5 during its fall meeting in New Windsor to make Sales Exchange for Refugee Rehabilitation Vocations International, or SERRV, a separate, nonprofit organization. The change ends SERRV's 49 years of service as an agency of the Elgin, Ill.-based church.

The organization, which sells handcrafts created by Native Americans and Third World artisans in 30 countries, "has no plans to move at all" from the Church of the Brethren Service Center in New Windsor, said Kathleen Campanella, the center's coordinator of public information.

The church sent 90-day termination notices to SERRV International's 25 full-time employees on Oct. 1.

"All were offered and all have accepted jobs in the new organization," Campanella said.

New Windsor Mayor Jack A. Gullo Jr. is pleased that SERRV will remain in the community.

"It would not be a good thing if they moved," he said. "We're hoping [the divestiture] is for legal and technical reasons," not a shift in policy.

"When people think of the Brethren Center, they think of the international gift shop -- 'The place where they have those lovely gifts,' " Gullo said. "No matter where I've gone, when I mention New Windsor, someone always says 'That's the place that has the gift shop that helps Third World nations.' It is a good advertisement for the town."

Establishing SERRV as a separate entity that will continue to have close ties to the church "will help SERRV maximize its ministry to the many current and future artisans who depend on this income for the basic necessities of life," said Mary Jo Flory-Steury, chairwoman of the church board, in a prepared statement.

Founded by the Church of the Brethren's general board in 1949 to "promote social and economic progress in developing regions of the world by purchasing and marketing their crafts in a just and direct manner," SERRV has assets of $1.2 million.

It conducts most of its $5 million-a-year business through catalog sales from 300,000 mailings and in gift shops sponsored by 27 denominations throughout the United States. SERRV also leases retail space at Cranberry Mall in Westminster.

The decision to make SERRV independent came Oct. 15, culminating what Campanella called a two-year "redesign process" aimed at limiting the church's financial liability.

The final vote came after several hours of "methodical and deliberate debate" in which the board sought to "determine whether SERRV would be able to function more effectively as a separate nonprofit corporation," Flory-Steury said.

The board likened the divestiture to "a child growing up," saying its members "hope that SERRV will maintain its strong ties to the Church of the Brethren" once the separation becomes official, Campanella said.

Although SERRV is to become fully independent, its newly appointed seven-member board of directors will include four people who are members of the Church of the Brethren.

The idea is to "maintain close ties" despite the new, independent relationship, Campanella said.

Denominational members appointed to SERRV's board would not report to the church board, she said.

The divestiture depends on SERRV being granted nonprofit status from the Internal Revenue Service.

When SERRV applied for that designation in July, officials were told the IRS probably would rule on the request within 90 to 120 days, Campanella said.

SERRV is to begin operations on its own Jan. 1, but that may be delayed if the corporation's nonprofit status has not been approved by then.

"Separation cannot occur without nonprofit status," Campanella said.

The divestiture agreement calls for the Church of the Brethren board to lend SERRV $650,000 for three years.

Traditionally, the church has provided SERRV with "working capital to get through the year," because most of the business occurs during the holiday season, Campanella said. The loan is in lieu of that grant.

Pub Date: 11/01/98

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