Sunrise Children's Services is working to recover from a massive budget shortfall after Kentucky churches withheld $7 million because the children's home had proposed ending its policy of discrimination against LGBT employees.

Bill Smithwick, the then-director of Sunrise Children's Services, proposed last year that the home allow employees who were openly gay and lesbian over fears that government funding would dry up.

After churches in Kentucky began withholding their donations, Smithwick was forced to resign, and the children's home did not change its policy.

But the damage was done, and Sunrise Children's Services was already facing a $7 million budget shortfall, according to WDRB.

The Kentucky Baptist Convention, which approves of the anti-LGBT policy, is now back in the Sunrise's corner. The convention has launched a fundraising drive telling churches that it's once again safe to donate.

"Now that our churches have confidence in the leadership of Sunrise and the direction of Sunrise, we'll give them the opportunity to re-invest in this ministry to children," Kentucky Baptist Convention Executive Director Paul Chitwood told WDRB.

However, the policy of discrimination puts Sunrise at risk of losing government funding, which provides 85 percent of its $27 million budget.

"And we know that, at least for now, the state appreciates that, needs the ministry of Kentucky Baptists to these children, thrilled to have the relationship," Chitwood observed. "And we'll just see where it goes."

Watch the video below from WDRB, broadcast March 7, 2013.

[A line of homeless children being fed by a charitable group. Photo:, all rights reserved.]