COVER STORY : Laying New Foundations : Religion: Inexpensive housing. Counseling. Day-care services. Job training. Business loans. Even sex education. In many inner-city areas, churches are offering an ever-wider array of services, becoming the primary force for social change.

Condom distribution after Sunday services. Credit unions on church grounds. Catholic women in Boyle Heights learning assertiveness and sex education. And housing tracts bankrolled by the faithful.

In the heart of Los Angeles--where much of the private sector has withdrawn and government has pleaded poverty--it is the churches, synagogues and mosques that are driving the engines of social change.

Religious institutions have moved beyond soup kitchens and clothing handouts to strike at the roots of urban despair: lack of capital, poor job training, inadequate education and low self-esteem.

“We can no longer accept that a handout meets the needs,” says the Rev. Edgar E. Boyd, former pastor of Bethel AME Church in South-Central Los Angeles. “It’s not enough to pass out the fish. We must teach our people how to fish.”

This brave new world of church-based programs has produced striking new images for religion in urban Los Angeles: an undocumented worker from El Salvador renting an apartment from his priest in City Terrace; recent arrivals from Korea and the Philippines finding immigration counseling and day care within their congregations; a young African-American woman from South-Central attending church to hear the new gospel of entrepreneurship.

“What the churches are discovering is there are structural problems in society that go beyond charity and require some change of the institutional structures, whether they be the economic or the social,” said Cornish Rogers, a professor of pastoral theology at the School of Theology in Claremont.

The crucial role of churches has been recognized beyond Los Angeles’ urban core. It is more than coincidence that Mayor Tom Bradley and President Bush chose churches for their most important appearances after the riots. And corporations have funneled many post-riot contributions to churches, often waiving policies against donating to religious groups.

“Certainly, in many inner-city communities, churches . . . lie at the heart of a whole network of services in their communities and organizations that provide services,” said Lon M. Burns, president of the Southern California Assn. for Philanthropy.

But as much as churches and their foundations have expanded their social ministries, some people say they should be doing even more.

Father Gregory J. Boyle, who recently left Dolores Mission in Boyle Heights for a yearlong sabbatical, noted that his congregation has provided jobs for gang members, a shelter for homeless women, a leadership class for women and turned its sanctuary into a home for 100 immigrant men.

“We are the poorest parish in the Archdiocese of Los Angeles,” Boyle said. “If the poorest parish in the city can do this, where are all the other churches?”

And the Rev. Cecil (Chip) Murray, pastor of First AME Church in the West Adams area, predicted that the efforts of religious leaders will be hampered unless churches start working together.

“Surely, we don’t need to keep reinventing the wheel,” Murray said. “Each church is talking about economic development, but where is the totality of community development? We need somewhere a computerization and centralization of everything that is available.”

One reason for the fragmentation is that churches cater to the diverse needs of their communities. For example:

* Oriental Mission Church near Koreatown helps immigrants navigate new challenges, ranging from driver’s license tests to applications for apartments. The 5,000-member congregation runs a nursery for 100 children and after-school programs for 300 more, with instruction in Korean and English and transportation to and from the church.

* Trinity Episcopal Church near Los Angeles City College, in conjunction with Project New Hope, plans to open a computer training center in January for people with HIV and AIDS. Students, who will be taught by a Los Angeles Unified School District instructor, will learn desktop publishing skills so they can continue to work through their illnesses. The Trinity Learning Center, sponsored by the Episcopal Diocese, may eventually blossom into a desktop publishing company providing flexible employment for those with AIDS.

Dolores Mission offers a women’s leadership class that brings issues such as sex education, job development, communication with children and domestic violence to a sometimes traditional Catholic audience. “If we are not going to at least examine what is behind some of these problems,” said Maria Teixeira, who leads the class, “no one is going to stay around the church.”

A nonprofit subsidiary of First AME will soon accept applications for small-business loans of up to $20,000. The Los Angeles Renaissance program will also provide business classes and mentors for fledgling entrepreneurs.

The program is part of what Murray calls a “gestalt” approach that also focuses on the self-esteem and education of young people. First AME volunteers also periodically pass out AIDS awareness kits, complete with condoms, at the end of services.

It is economic development, however, that has been at the forefront for many urban churches.

The Episcopal Diocese of Los Angeles, for example, has retained a consultant and committed $300,000 in start-up funds to establish a credit union that will offer personal and small-business loans of up to $30,000 when it opens for business next year.

“We thought the best way to put the money to use was to create a financial institution, to make capital readily available to people who don’t normally have access to it,” said Suffragan Bishop Chester Talton, who came up with the idea. “I thought it would be more responsible to develop a program that would be in the community for the long run.”

Talton said the church plans to open credit union branches in each of its 152 churches and to expand on the seed money contributed by the national church with contributions from parishioners.

Individual Episcopal parishes have plans for economic development as well, such as the Echo Park congregation that has applied for grants to open its own small businesses, focusing initially on jewelry casting, medical home care and mailings for nonprofit agencies.

“That will provide jobs for young people, as well as teach them a skill,” said the Rev. Jon Bruno, one of the planners of the program for the Cathedral Center of St. Paul/The Congregation of St. Athanasius. “Then we can have people who are not just sweeping up and painting out some graffiti. They will have real jobs.”

Several churches south of Downtown are also attempting to build comprehensive economic training programs.

At Bethel AME on Western Avenue, for example, entrepreneur classes focus on how to write a business plan, preparing participants to apply for small-business loans. But the nine-week crash course also draws on local business people and academics to teach everything from bookkeeping and merchandising to the pitfalls of workers’ compensation.

Gwen Black, an accountant from the Crenshaw District, was elated to find Boyd, who was recently transferred to San Francisco, spearheading such a program.

“When I saw those two things together--here was a man of God and someone interested in business--I could not resist,” said Black, who plans to become a financial consultant.

The Bethel program, funded by the Los Angeles Community Development Department, has given another woman hope that she can open her own health food bakery.

“It’s about making something of yourself and having an interest and ownership, so you won’t want to burn it down,” said the woman, who asked not to be named.

The church will continue its support for the 30 fledgling business people and for future business classes by opening the Allen Community Development Center next year. The center, across the street from the church, will provide management counseling and loan information, said Joseph Gardner, director of the entrepreneur-training program.

In the past five years, churches have also emerged as developers, said Denise Fairchild, executive director of the Local Initiative Support Corp. Fairchild’s nonprofit agency now counts 10 churches among the 28 clients that it assists in efforts to build housing and commercial projects.

“As a funder, we look to churches as an important community institution with talent and resources to turn these blighted neighborhoods around,” Fairchild said. “Most of these churches are of long standing and, especially from a lending perspective, we can anticipate they will be around for the life of the mortgage.

“The fact they are involved in the whole community, and not just the congregation, is a real turnaround for Los Angeles,” Fairchild said.

The clergy has also found that it can make an economic impact the old-fashioned way--simply by preaching from the pulpit. The most striking success has been the campaign by about 250 ministers to expand the assets of Los Angeles’ three black-owned banks, an ongoing effort that led to an estimated increase in deposits of $8 million in just two months earlier this year.

But religious leaders caution that housing, and the struggle of families to pay exorbitant rents or to own homes, must not be overlooked. In a 48-square-mile chunk of South Los Angeles, for example, less than 36% of the housing is owner-occupied, compared to nearly 50% countywide.

Nehemiah West, a subsidiary of two church-centered community groups, plans to soon build 126 townhomes in Bell Gardens which will sell for an average of $71,000 and be affordable for families with incomes as low as $22,000 a year. The group plans to build an additional 200 homes in Compton.

“We felt an influx of ownership homes would help stabilize communities,” said Larry Fondation, lead organizer for the United Neighborhoods Organization and the Southern California Organizing Committee, the sponsoring organizations. “We believe that low-income and minority people should be able to have a piece of the American dream and be able to own homes.”

More modest efforts to provide housing have sprouted throughout the city, as well.

In City Terrace, for instance, Father Juan Santillan of St. Lucy’s Catholic Church became tired of finding shelters too full to accept the community’s homeless. So he rented a six-bedroom house across the street from the church and opened the Calasanz Hospitality Home, where 12 immigrants who had been living under bridges and in cars now pay $100-a-month rent.

Said Santillan: “The time came to do something for ourselves.”