Removing the Mysteries about Church Finance. Jerry L. Johnson

He was not a troublemaker, but he did disturb one's thinking.

      A little book from a few decades ago with the very bland title of 7“Who moved my cheese” (by Spencer Johnson, M.D.) illustrated the ease by which two little mice, used to living with an abundance of cheese, slipped into complacency and when the abundance dried up, they were shocked to realize they had to forage.

      Revelation 3:16 "So then because thou art lukewarm, and neither cold nor hot, I will spue thee out of my mouth."

      Complacency is at the heart of average people and comfort is at the heart of failure. On a continuum of performance, complacency resides at the very lowest level, slightly more positive than actions that are actively detrimental to the church. Try to defend complacency, that is not easy without bringing specific people to mind.

      A church, a social club, or any other that depends on drawing members into it, can become complacent, going through their rituals with stiff motions. Joy is something that can only be felt, it is not an intellectual activity, as Psalm 30 sings, "Joy comes in the morning." Joy and complacency do not share the same space, the same spirit.

       Business Models

      Individual churches have their own business models, different from many other churches and from non-church organizations. The business model depends on numerous factors, with each affecting the outcome to some degree. Their business model tells the story about how their enterprise functions. It answers questions about who your customer is, (yes, churches have customers; they are also called church members), what that customer values, and how the church delivers to the customer the sought-after services at an acceptable cost (you will learn about cost per person). The business model describes how the church will respond to events and circumstances. This will be defined by church age, size, traditional responses, and internal mechanisms in place. The church must respond to many events, such as the COVID pandemic, exogenous events outside the church to control or prevent. You can only respond.

      There may be disagreement that a church should have a business model, contending that the church is not a business, therefore a business model is unnecessary. Please keep reading.

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      1 Schein, Edgar H, Organizational Culture and Leadership, San Francisco: Jossy-Bass, 2004

      2 Wilfred Bion, 8 Sep1897 - 28 Aug 1979, Identified three Basic Assumptions: Dependency, Flight-Fight, Pairiing.

      3 Why People Fail to Recognize their own incompetence; Dunning, David; Johnson, Kerri; Ehrlinger, Joyce; Vol 12, Number 3, June 2003, Current Directions in Psychological Science

      4 The three enterprise above were clients of the author who later was business manager (the first) for the church.

      5 Wikipedia article, Christ Cathedral, Garden Grove, CA

      6 The Bell Curve: Intelligence and Class Structure in American Life is a 1994 book by psychologist Richard J. Herrnstein and political scientist Charles Murray, in which the authors argue that human intelligence is substantially influenced by both inherited and environmental factors and that it is a better predictor of many personal outcomes, including financial income, job performance, birth out of wedlock, and involvement in crime than are an individual's parental socioeconomic status.

      7 Johnson, Spencer MD, Who Moved my Cheese, Putnam Adult, Sept 7, 1998 (32 pages)

      SECTION 1 - REVIEW

      1 Should a church have a business model?

      2 Should church leaders better understand their church culture?

      3 Can a church be an enterprise?

      4 What does a church and a private for profit-company have in common?

      5 What is the difference between “artifacts” and “basic assumptions”?

      6 What are three possible reasons a church may close?

      7 How should a church handle debt?

      8 Think about what business model the Crystal Cathedral might have used to acquire $55 million in debt.

      SECTION 2 – A CHURCH IN FINANCIAL TROUBLE

      LESSON OBJECTIVE – How incrementally disjointed decisions can put a church in financial jeopardy

      WHAT YOU WILL LEARN IN THIS LESSON

      1. How to frame an organizational problem

      2. What happens when accounting loses track

      3. All systems in an organization must work in harmony, constantly

      4. Features of a dying enterprise

      5. The role of money

      BACKGROUND: Once upon a time, the church was fully operational, built about twenty years prior. It was a complete campus containing the following:

      a. Church building with a 1000 seat worship center, classrooms and offices.

      b. Church school with grades 1-12

      c. Lunchroom, serving hot meals for all students

      d. Gymnasium for all type indoor sports

      e. Maintenance building for bus and campus maintenance

      f. Parsonage on a thirty-acre campus with athletic fields and other outdoor activities

      g. Staff consisted of senior pastor, associate pastor, administrative personnel, and a full slate of school staff

      h. An additional fully furnished house gifted to the church

      The situation of the church as described by the senior pastor was:

      Behind on bills

      Giving had declined

      Attendance had declined

      Cash in advance basis with suppliers

      A growing malaise in the membership

      Committees and workshops were lackluster

      Maintenance and appearances have been ignored

      Needed maintenance was lacking on buildings, grounds, and buses

       Problems and Symptoms

      The problems of a church are man-made, they have their origin in the actions, thoughts and plans of people. It may be that people misunderstand God’s guidance and go off on their own; that happens. What we will explore in this book are problems that did not need to be. In looking at this objectively, before attempting to identify problems, one must review the decision-making processes that were used to get to this point.

      Problems can have multiple dimensions. The “presenting” problem, especially if the situation is systemic, is usually not the root of the main issue. What is identified at first is symptoms even though often they must be dealt with before going on. There were several obvious problems but in order to do anything about them, the specifics had to be established.

      1. Money was mishandled:

      a. Entered in or taken out of whatever account needed it or had it.

      b. People had contributed designated money to a fund to support missionaries. That money was quietly redirected to church operating expenses.

      c. Missionaries had not been given the promised support for several years;

      d. Nor had it been explained to the people contributing to missionary support.

      e. Numerous overdraft charges from the bank.

      2. The church hosted an annual multi-church jamboree early in the year with hundreds of people coming. There were many guest preachers, speakers and music groups.

      a. The expense of this was scattered throughout various bookkeeping accounts. Income from this