Bankruptcy and The Crystal Cathedral - Pathetic or Prophetic?

The Crystal Cathedral has filed for bankruptcy.  I have no doubt that critics, skeptics and naysayers are smirking in their cheerios this morning.  My heart aches.  My hypotheses and philosophies of the future of Church finances have been supported by this event, but I find no pleasure in it.

Please, let me explain.  First, I love Robert Schuller.  In the early years of my time in full time ministry, his book, “Your Church Has Real Possibilities” was very influential in helping me form practical direction for British Isle Evangelism.  I have been to the Crystal Cathedral a couple of time and thoroughly enjoyed the experience.  I’ve never been a big fan of “The Hour of Power” and believe it has painted a terribly incomplete picture of the ministry of Robert Schuller and life of the congregation there in Garden Grove.

Despite my fondness for Robert Schuller, I do have some rather strong doctrinal variances from him.  It is not, however, doctrinal, but practical and financial weaknesses that have brought this crisis upon the Crystal Cathedral.

All living organisms reach maturity, then age and die.  A local congregation is not exempt.  Even a mega Church will eventually experience the phenomenon.  The death may be slow, even very slow, but eventually, regress happens.  

Real estate (at least the buildings), are subject to the laws of science (eg. Thermodynamics).  Buildings, parking lots, fixtures, and the like, wear out, atrophy, eventually to the point that repair is no longer viable.  Restoration or replacement can be extremely expensive. The Crystal Cathedral was once the cutting edge of Sacred Architecture, now it is a dated, aging monument to days gone by.

Even great ministries and their campuses reach a plateau.  Some, especially those which are legacies to a single man’s (or woman’s) vision, are likely to survive little more than the lifespan of the founder.  Those with the vision and savvy to create a succession plan, will live, and can even prosper for generations.  But, time and circumstance happen to us all.

The churches that last the longest continue to morph and reinvent themselves by moving campuses, changing formats and maintain a certain balance between longevity and turnover of staff.  Some even change their names as a part of the metamorphosis. 

 

I have nothing against those things, but I submit that those changes may actually mean that a new congregation has been birthed rather than a simple location change.  Some of the core may be the same, but the differences are significant enough to suggest the organization is different.

Churches are also subject to the laws of economics.   When we spend less than we earn, when we avoid debt, when we budget wisely , give generously and when we save appropriately, with an eye to the future, we prosper.  When we run up debt, spend ahead of our income, expand too quickly and have no financial cushion, we risk much.

Our current economic crisis in America (and the world), has highlighted a fundamental crack in the traditional financial thinking of many congregations.  A large number of ‘boom’ Churches are in serious financial trouble.  As the communities around them blossomed under the economic and housing bubble of the 90s and early 00s, congregations grew and expanded.  Following the example of their members, large numbers of Churches built McMansions in the suburbs.  Using easy credit, they took out huge mortgages and built oases of peace and faith that were reverent and (often) simultaneously flamboyant.

These relocated congregations frequently experienced a huge burst of activity and growth when they moved into their new facilities and added staff and ministries accordingly.  We justified our extravagance by pointing to “God’s blessings” and our noble purpose.  We convinced ourselves that we were “casting our bread upon the waters”.  Oh, what a grand time it was.

Then, like the children’s chorus, “the rains came down and the floods came up”.  The American economy collapsed.  The bubbles burst and all Hell broke loose.  Businesses closed or laid off employees by the train load, unemployment exploded, banks failed, the stock market crashed, the housing market melted, money vanished. 

Amidst the rubble of foreclosed homes, unemployment lines and broken dreams, we see church after church struggling to stay afloat.  Offerings in many places have dropped by nearly half.  Attendance has taken a hit in those places where families are being forced to leave in order to find work elsewhere.

It is a bleak reality, where once thriving Churches are faced with cutting staff and programs.  Churches born with the best of intentions and the most Holy of goals, are finding themselves struggling, or unable, to pay their mortgages.  Banks don’t want to foreclose of places of worship.  That’s not good PR.  Despite the efforts of everyone involved, both borrower and lender, Churches are defaulting on loans at a record pace.  The Crystal Cathedral is simply the most high profile example to date.

The future requires a paradigm shift, a radical change in the way churches operate financially.  I pray daily that we awaken and make the necessary changes before it’s too late to do so.

For Churches that are in financial crisis, it is imperative that we begin immediately to budget like a family rather than like a corporation.  Most congregations may be structured like a business, but we function like a household.  We would be better off to budget that way. 

On a high level, that means:

1.       Repent

2.       Pray

3.       Stop borrowing.

4.       Establish a perimeter (it looks a little different than for a household, but essentially the same)

5.       Create a Budget (a zero based budget)

6.       Develop a baseline emergency fund

7.       Eliminate Debt

8.       Have a fully funded emergency fund

9.       Pray

There will be some tough, heartbreaking decisions in the process.  It may mean some salary reductions.  It may mean some staff cuts.  It will most likely require the cutting of some ministries and services the congregation provides.  It may mean selling the building or some of the land (if you can find a buyer).  It will certainly mean scaling back on opulence.  

Budget cuts do not have to mean quality cuts.  It is better to do a few things well, than offer many things poorly done.  

Restructuring will not be fun.  It will not be easy.  Feeling will be hurt and some may even leave over it.  If that happens, so be it.  We have to do the right thing, regardless of the consequences.

I’m going to interject a very personal frustration here.  Typically, one of the first cuts congregations make in times of financial difficulty is to the Missions budget.  I find that both bizarre and counterproductive.  Our prime directive is to disciple the world.  If the first financial cutbacks we make are related to evangelism, then we really have some mixed up priorities.  

A better way might be something like this (it’s only an example):  We say we have to cut 10% across the board.  After cutting all the fat we can find, we ask the staff to take a 10% cut and we share our situation with our mission partners and explain that we are doing the same with our off campus staff.  We let them know that as soon as the crisis is over, we will return to our normal level of giving.  

Let me spend a moment offering my unsolicited and unwelcome advice to recent or future Church plants: Don’t do debt!  The economic landscape has changed, maybe forever.  The tectonic plates of our financial basis have shifted.  The Church is not in the real estate business.  I urge you to stay in rented or borrowed facilities either permanently or at least until you have cash to purchase. 

If you feel you must take out a mortgage, only ever do so on your first structure, and absolutely NEVER of future expansions.  Did I say NEVER?  Good.  Build the minimum that you can get away with.  Make sure that your mortgage can be paid with the current income, and do not rely on any projected future income that will come from wished for growth.  

Make absolutely sure you use a zero based budget.  Each ministry, each service, each program, must justify its existence.  Do not expand in either staffing or campus until there is cash flow to do so.

Focus on ministry rather than facility.  The Great Commission says, “GO!” It says nothing about “Invite”.  We can be more effective and more involved if we take our work to the hurting rather than finding a way to get the hurting to us.  I think of ministry more like ‘search and rescue’ than an emergency room where the wounded are carried.  I’m all for emergency rooms, I just think a pro active role is more Biblical.

I intend to flesh these thoughts out in a future book (working title, “Paradigm Shift: a Quest for Revival, Reformation and Revolution in the Church”), but for now, I hope this rant get you thinking. 

I am cross posting this in “Recession Proof Living” and in “Paradigm Shift”.

And Also Available In A Handy Kindle Version

I'm so psyched.  I just got the notice that IOU NO MORE is now available for Amazon Kindle users.  So there are three formats to choose from: paperback, Kindle and e-book.  I love this country!

Sustainable, Self Sufficiency - The Third Phase of the Revolution, Part 1

My financial journey has been a scenic one.  It has taken many twists and turns.  Some of the views have been breath taking.  Others have been rather terrifying.  But I have enjoyed every minute.  I love sharing my story and my vision for universal financial freedom with anyone who will stay still long enough to listen. 

Now that we are debt free (except mortgage, but that will be soon enough), I have turned my attention to what it means to live a 'debt free lifestyle'.  I thought I would move down a path of 'wealth building', but that one is well worn, having been travelled by many who are far more knowledgable than I.  Two of the great ones are: Dave Ramsey and David Bach.  I love their wealth building ideas.  Since they've already done the heavy lifting, and since my name isn't Dave, I took another path.  Fortunately for me, my bride has been willing to walk this new trail with me.  I am a lucky man.

As you might guess from the title of this weblog, I call it "Recession Proof Living".  The website will be, www.recessionproofworld.com.  The space is reserved, but not yet built.

If you read IOU NO MORE, you know I introduced the subject of putting your finances on 'Cruise Control'.  If you haven't read the book, get a copy right away.  If you can't afford a copy of your own, borrow one.  I'm serious.  The plan will change your life.

Turns out that for and ADD charged, Type A male, like me, 'Cruise Control' was boring.  Smart, but not satisfying.  So I began to investigate why I was feeling unsatisfied.  I came up with several answers. Some  were spiritual, some were political, some were personal.

Politically, I am very concerned about the direction of this country.  Both parties worry me.  I see Govt. getting bigger and the American wallet getting smaller.  My 401k hit the tank like everyone else's did.  I have no confidence in the future of Social Security nor in taxation.  I began to ask myself what would happen if this country had a total meltdown.  What would life look like?  Would a 3 to 6 month emergency fund be enough?  Were others wondering the same thing?

Personally, I am a control freak.  I need to be in control of my own destiny.  And I felt at the mercy of the Government, my employer and the big industries that dominate supply, demand and pricing of commodities and other necessary goods and services.  I look down the road and am bothered about what I see.

I'm not a Global Warming believer.  I hate fear mongering politics disguised as concern for the earth.  Bah.  Humbug!  But I do have some things in common with the environmentalist fringe.  I don't like the way we're mishandling resources.  Traditional farming methods are destroying the soil quality of our planet at an alarming rate.  We are washing tons of chemical fertilizer waste into rivers and streams, poisoning the water and the life dependent on those waters.  And whatever you do, don't get me started about commercial animal production....Oh, by the way, have you looked at the label on a can of pretty much anything we put in our shopping carts on a weekly basis.  We are pretty much ingesting the entire periodic table.  I'm thinking that might not be a good thing.  And we're paying for the privilege. 

On a final personal note, I was born to live in the country.  I need room to roam.  I need to work in the soil with my hands.  I need the fresh air, the livestock....the manure.  Green Acres is the place to be.  Living in the suburbs, spending hours of my day in commuter traffic, punching the clock, is not 'cruise control'.  It's torture.

But it was reading the Bible that changed my whole perspective.  God has a way of grabbing hold of me, shaking me like a rag doll and pointing out my obvious blindness.  What I discovered about saving and giving was life altering.  It was also liberating.  Phase two of the Revolution came directly as a result of my Bible study.  Phase three is, I believe, a natural consequence of phase 2.  I'll start explaining myself next time.

Budgeting 101 - Part 3

Now it's time to begin 'establishing a perimeter'.  You have your pencil, Basic Spending Plan, calculator and recent bank statements?  Good.  Let's get started.

One of the FAQs I receive is whether to budget weekly or monthly?  The answer is more complicated that I'd like.  The simple answer is; whatever works best for you.  Since most bills are monthly, that option is the one normally pursued.  But some, like car insurance or property taxes are quarterly or even annually.  That complicates things just a bit.  Here's what I recommend.  I recommend budgeting 'per paycheck'. I'll use house payments as the example.  Take the monthly payment and multiply it by 12 which will give you your total house payments for the year.  Then, divide that by the number of paychecks you receive in a year and you'll know how much to budget per paycheck.

I get paid every two weeks.  So, staying with our example, and making the numbers easy, we'll say my house payment is $1,000 per month.  I will multiply that by 12 and come up with $12,000.  Next I will divide that by the number of paychecks I receive, which is 26.  Many people assume that bi-weekly translates to 24, but there are always two months that get 3 checks.  I love those months.  Anyway, I take the $12,000 and divide by 26 and I get $461.54 (technically, it's a long decimal fraction, but rounds to to that.)  So I put that amount down in the Spending Plan as the amount I need to budget each paycheck.  Simple.  And easy if you have a calculator.

Now, back to our regularly scheduled perimeter:

The North Wall of your perimeter is "God".  On the Basic Spending Plan, I call it "Tithe".  There are still an amazing number of people who remain bewildered at this being the first item budgeted.  I, on the other hand, am bewildered that anyone would consider anything more important than God.

Let me explain my world view.  I'm glad this is a blog rather than Twitter, because I'm going to need more characters.

I am a Christian.  My relationship with God is the most important relationship in my life.  I love my wife, my children, my grandchildren, with every fiber of my being.  I have friends I hold very dear.  I love my country.  But nothing compares to my love for God and what He has done for me.

I won't bore you with the details of the triumphs and tragedies that are my life, but despite my numerous flaws and failures, Jesus loved me and spilled His blood on a cross, so that my sin could be forgiven and I could have a relationship with Him.  It is a remarkable love story.  And it has an extremely happy ending.  After three days, Jesus rose from the grave.  He conquered death itself. He is totally able to forgive my sin and give me a new life here on earth and eternal life later.  I intend to make the most of the opportunity.  The only thing that would make the end happier, is if you had a relationship with him, too.  He is waiting and eager to welcome you into the family.  You can read about it in the Bible.  If you don't have a Bible of your own, you can borrow mine.  Alternatively, you can read the love story of Jesus right HERE.

Brittan and I made a decision long ago, that God would receive the 'first of the best and the best of the first.'  It's like laying the foundation for a building.  If the foundation is good, the building has a chance at survival.  If the foundation is bad, 'Lucy, choo got problems."  So, if God is first, then He is first in our budget.  Frankly, I don't believe the IOU NO MORE plan would work any other way.  I'm certainly not going to test it.  My mamma didn't raise no fool.

Tithe literally meant 10%.  We give the first 10 percent of everything we make to God.  The first check I write each week is made out to our local Church.  If I get a bonus, or windfall, 10% of that goes to God right away.  Bonus money gets split between the local Church and a variety of ministries we support.  (Note:  if you stay tuned till the end of this series, you'll discover a plan to raise your giving to 20%.  Same thing with your saving.  And you'll still have more than enough to live on, quite comfortably.  But it's way too early for that.).

I don't want to get into a big, hairy debate about tithing on gross vs net.  Just start somewhere.  If you're afraid to start with 10%, start with 5% and plan to raise it to 10 when you see how amazing God is at honoring your faith.  If you have questions about tithing or about how to begin a relationship with Jesus, drop us a line.

One more side note:  Currently, the IRS allows Americans to take a tax deduction on our tithe.  How cool is that? Give money to God, and then get to write it off your taxes. You should take full advantage of that.  It's not unspiritual.  I don't recommend giving FOR the deduction, but I don't think we should reject the offer, either.

The day may come when giving to God is no longer a tax deduction.  My behavior will not change at that time.  I give because I love Him.  Everything I have ultimately comes from Him.  Jesus is Lord of all.  Even the tax code.

To summarize:  The very first thing to budget is your tithe.  Determine how much you will give.  Write it down. There, don't you feel better already?

Budget 101 - Yep It's That Time of Year Again (First in a Series)

Fall's here, footballs are flying, leaves soon will be, so it's time to start thinking about the Holidays and the New Year beyond.  It may come as surprise to you but 2009 is almost over and Christmas falls in December this year.

The Holiday Season (From Halloween through New Year), does amazing damage to the American pocket book.  We all know about Christmas and Thanksgiving, but it's quite impressive how much Halloween costs.  Besides mountains of candy, we spend a fortune on costumes and decorations.  Many communities are as extravagant in their Halloween decorations as they are with Christmas.  We are Americans.  We love lights.  We love opulance, we love gaudiness (Think Time Square or The Vegas Strip).  And apparently we love debt.

Well, it's time to kiss the whole debt thing goodbye.  Kick it out of the house and let it join the circus or something.  But we are through with it.  Right?  Right?......................

Ok, if you're still here, let's go over the basics of how we can accomplish all of our financial goals.  First, we have to have goals.  Let me suggest a few:  1.  Live on less than we earn, 2. Get out of debt, 3. Build a nest egg for the future, 4, Give to worthy causes, 5. Stop having to WORRY about money.

Those will do.  You might add some of your own related to vacations, education, buying a house, etc.  But the 5 above pretty much cover the core.

In this series, We're going to focus on #1, Live on less than we earn.  We'll touch on the other goals, but we won't stay long.  If you want a step by step plan on all 5 goals, you should check out IOU NO MORE.

I don't know many people who get excited about budgeting; at least not not at first.  But once we learn to do it right, budgeting is a lot of fun.  Ok, a little fun.  But, I guarantee you  that it's not a drudgery.

Think of it as "Fantasy Spending".  We all love to spend.  Back when I was a phone rep in a Call Center, as a part of our offer, we entered prospects and customers into a sweepstakes with a grand prize of $1,000,000.  We would ask people, "What would you do with ONE MILLION DOLLARS?"  I loved listening to the far away sound in their voices and customers spent that money in their imaginations. 

Think of a budget the same way.  It's spending the money on paper, before we spend it at the store.  Nerdy, detail oriented types love this part.  I've seen some people's budgets that rival a major coporation in their granularity. I don't recommend that.  Use something simple, but practical.  We've already done the outline work for you and if you like, you can get a basic budget plan for free right HERE.  Just tell us you want the free Basic Spending Plan and email it right out to you.

It's important to do a WRITTEN budget.  Doing it in your head just doesn't work.  As we say in the south, "That dog don't hunt."  Writing it down will help you focus and it will assist you in making sure you cover all areas.  If you are married, you should do this with your spouse.  It's ok if one of you does the heavy lifting.  But make sure you are both in agreement on the numbers and priorities.  Marriage is not about dominance or dictatorship, it's about teamwork and mutual submission.  You remember the ceremony right?  All that 'putting the other person first' stuff.  Well, budgeting TOGETHER is one way of actually doing what we promised.

Use a pencil rather than a pen.  I know, now I sound like the nerdy, detail oriented type (which everyone who knows me knows I'm not).  But I am practical.  There will be a great deal of erasing.  Pencils have erasers.  They are designed for work that has to be done over.  Ink pens..... not so much.  They are all about permenance.   Hey, what happened to my spell check.  It's missing..... bummer.  Ok, back to the subject.

You'll need a calculator and a copy of at least your most recent bank statement.  Good news, both are probably availble on the computer you're using to read this article.  You'll find the calculator under the 'accessories' tab in your start menu (if you are using a PC.  If you have a MAC, I have no idea.  I'm not cook enough for a MAC.  You'll have to find it yourself).  For the bank statements, go to your bank's website and log into 'online banking'.  If you haven't yet set up an online banking account, now is the time to do it.  If you already have one, you'll know that it's a great place to keep track of your spending patterns.  I check mine every day.  It's a safety thing.

Ok, you have a pencil, a budget form, some historical information and a calculator.  We're ready to begin.  In our next installment, we'll do just that.  We will look not only and the categories, but which order in which to budget them.  The order is mission critical.  But that will have to wait till next time.  I have to take a shower and go to work.

I Don't Hate Banks......Really, I Don't

Many readers of IOU NO MORE somehow come away thinking I hate banks.  I'm not sure why and it couldn't be further from the truth.  I don't hate banks at all.  I hate debt! 

I don't even hate bank fees.  At least not all of them.  For example, it doesn't bother me that banks have overdraft fees.  Common sense dictates that if you spend more money than you have, there should be a price to be paid.  Technically, it's stealing.  The over spender has taken money that is not his/hers.  The bank converts the theft into a loan, saving the (over)consumer embarrassment and making a little money on the service.  It's called, Capitalism. It is not the bank's fault when we overspend.

Having said all that, I think that consumers should be very careful when we choose our banks.  They are not all created equal.  Many banking institutions really are reputable and sound.  Others, are, shall we say, less so.

One change in at least some bank practices that really burns me up has to do with how they process transactions at the end of the day.  Once upon a time, most, if not all, banks added your daily deposits before they subtracted your withdrawls and checks.  It was thoughtful and customer focused.  It was almost as if the institutions really did have hearts.  Now, many banks do it the other way around.  The reasons are fairly obvious, primarily the chance to find a fee charging opportunity.  That's just not cricket! It makes a bank look like  Snidely Whiplash from the old Penelope Pitstop cartoons.  And it's just the kind of thing that will cause me to look for a new banking partner.

Banks are great places to store your cash flow.  Brittan and I have a checking account in a bank.  We use a bank for our mortgage.  We use an online bank for our savings because rates are better.  Since we don't do debt, we don't have to worry about fees or cards or minimum payments or much of anything else, really.  It's a great relationship.  We store our money in their computers.  They use it for investments, loans etc.  In return, they let me use their cash machines, provide checks and statements for us and let us have it back whenever we want it.  As a result, we have a peaceful alliance.  In the event our bank changes the game on us, we will find another home for our nickels.  It's just business.  I don't hate banks.  But I'm not married to one, either.

Coping With Rising Unemployment

Unemployment is set to hit 9.7% nationally.  Many places are already in double digits.  There are no signs of imminent turnaround in those numbers which means stress levels on millions of American families is going to remain at code red levels for a while.  I know how it feels.  I have experienced two long stretches of unemployment in my life.  I remember the frustration, the hopelessness, the helplessness and the bewilderment.  It's difficult to describe the attack on one's self esteem. 

Here are some coping tips for those facing or experiencing unemployment:

• Trust.  First, trust in God.  He has you in the palm of His hand, even when it feels like you're free falling.  Secondly, trust in yourself.  You have skills.  You matter. You have strengths.  You offer value.  Far from worthless, you are a priceless treasure, created in the image of almighty God.  But you may have to remind yourself of that from time to time. 
• Abandon Credit Cards.  Statistically, many people use credit cards in times of unemployment for many basics like groceries and utilities.  In the end, it makes the financial hole bigger.  Credit Cards are not for emergencies.  They create them.
• Get on a written budget.  Desperate times call for desperate measures.  Now more than ever, you need to make every dime count.  For budget help www.iounomore.com.
• Create a routine.  The despair from unemployment can easily turn even the most stout hearted individual into a couch potato.  Face each day with a plan.  Write it down just like you would if you were creating your task list at work.  Formalize your schedule with set times for job hunting, resume work, exercise (I treated exercise like a part time job and got very fit. My only regret was not keeping that up after I found employment), yard work, house work, prayer time.  Don't let life happen to you.  Make life happen FOR you.
• Get creative.  Look at your skills and talents rather than just your resume as you seek the next phase in your career path.  There are multiple options for you to pursue outside of 'what you've always done'.  You can find some great tips, tools and resources at www.48days.com.
• Make a game out of bargain hunting and finding ways to cut costs.  Even after all this time, I still get a thrill out of finding a way to save a buck on anything, especially things like utility bills.
• Stay focused.  You will have times of great hope and times of deep hopelessness. Make sure you work your plan rather than allow yourself to be carried along by your emotions.  
• Help others.  Nothing will help you take your mind off your own problems better than assisting another person with his/hers.  Volunteer at a nursing home.  Help out at Habitat for Humanity.  Help out at your Church office.  The opportunities are endless.

You will find work.  Maybe it will take a while, maybe it won't.  And you may find out that the next job is better than the last one, so don't assume that you will have to settle for less.  That's exactly what happened for me.  After a long period of unemployment, I found a job that put me on a career path that has been fruitful in more ways than I can count.  It ain't over till it's over.  You can win!

Surprise, Surprise, Surprise!

A friend of mine told me a great car buying story this week and I want to share the substance of it.

She and her husband decided a good used car (already a sensible choice) was in their future. They did their research, packed a checkbook and headed out to test drive. Once they found their ideal car, and did their negotiating it was time to close. The sales person said, "I suppose you'll be needing to arrange financing", to which they replied, "No, it's ok if we write a check, right?"

"What?"

"Write a check. We're going to pay cash."

The entire dealership fell into silence. As they handed over the payment in full, they were told, "I don't believe this has ever happened here before."

I love the revolution! Talk about a stimulus plan. Pay yourself instead of the bank. Then pay in cash for what you need. Everybody wins. Except those who feed off of debt, of course. What is it we call things that feed off of other things again? Oh, that's right............ parasites!