Creative Leadership

The Coming Debt Burden for Media Ministries

Something that might be worth talking about is the increasing debt that a number of major ministries currently carry. In one case a Christian university was about $23 million in debt, and was only saved through a life insurance policy after the death of the founder. But a life insurance policy isn’t a long term donor development plan. Others that are considered popular in religious media are shouldering mountainous loads of debt – most likely, ministries that you wouldn’t realize. Is this a problem? And if so, what does this tell us?

First – we know that donors and supporters don’t give to erase debt. They give to build, expand, or otherwise accomplish a mission, but few people will give to eliminate debt. My experience is that they feel, “Hey- you got yourself into it, so get out on your own.” They also don’t feel erasing debt accomplishes anything positive, so the bottom line is, when you get into the red, you have to raise money for other projects and use some of it to keep your debt at bay.

Second – it tells me that some leaders haven’t been sensitive to changes in the culture. Right now, we’re going through the greatest generational shift in a long time, and many ministries who were very successful a generation ago, are struggling today. For instance, for the last generation, all you had to do was build a building, and people would give. But not so today. In spite of that, some older leaders still build, even though the money has dried up. The truth is, change happens. And if churches, ministries, and non-profits aren’t aware of those changes, they will suffer.

Third – It’s interesting that some of these ministries are the ones teaching prosperity. Apparently it works for the leader, but not for the organization.

Fourth – What do we do about it? I’d love to hear your suggestions, but here are a few thoughts:

— Don’t be afraid to liquidate and close the ministry doors. Nowhere does it say that a successful organization has to continue to another generation. One leader was famous for saying, “Success without a successor is failure.” Who says? Why can’t God raise up a great work for a particular generation and stop it there? Have the courage to say we’ve done a great work, and accomplished our assignment, and now it’s time to move on. But the problem with this thinking? Too many people are on the payroll. Too many are making a living off the donations of the partners. In those cases, the ministry has ceased to be mission driven and become payroll driven.

— Don’t be ashamed of scaling back. Evolve. Needs change, and perhaps your organization needs to change to meet those needs. Change. Scale back. Downsize. Nothing wrong with that.

— Re-think your purpose. Esso became Exxon. Cingular became AT&T. Bill Gates started out to build hardware, but when those doors closed, shifted to software, and changed the computer industry. Each generation is gifted in different ways. The problem is the founder needs to realize that, and value the gifts and talents of his or her children. Allow your strategy to shift as the landscape changes. Don’t be locked into a 30 year old vision.

— Get new insight. Leadership expert John Maxwell calls it “fresh eyes.” Sometimes it’s important to get outside opinions, advice, and expertise. Get a consultants opinion. Find someone you admire and hear them out. Never get so big you stop listening to smart people.

— Consider new leadership. If your organization is in serious debt, you need to radically re-think the leadership. How did that happen? Who on the board approved this? Being a spiritual leader doesn’t always make someone a good organizational or financial leader. The spiritual leader either needs to get a great business person he or she respects, or consider stepping down.

— Look for a new model. Bigger isn’t always better.  The future is focus.  Niche organizations to accomplish specific assignments.  Create, do the task, dissolve.  Don’t build a dynasty.  Study movie production companies.  They create a company for a specific project, and then dissolve it, and recreate one for the next one.  Lean, mean, and controlled finance.

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  1. By chance do you have an example of an old, established Christian organization that got large in the last generation and successfully scaled down out of necessity in recent history?

    I would think that when considering these issues, they all go hand-in-hand. No way is the founder that took the organization to it's current large size going to see it through to a successful scale down. New insight, new leadership, new size and new purpose all have to happen at once. In effect, it's a new organization. With that said, you might as well just close up shop (as you suggested) and start a new organization afresh. Just a thought….
  2. The worlds economy is changing – no doubt about it. My parents and grandparents generation could buy a block of land for about six months average wages. Today you can add another zero, AND spend about another 3-5 years at university just to earn an average wage, AND spend another hour to get to work, AND pay a few tolls getting to and from work. Many economists believe the post war "boomer generation" was the luckiest generation to ever live. As they die off, the traditional donor base dies with them, and you are left with people struggling under massive mortgages. Ministries will have to adjust to this. Debt can be a real killer for families and churches alike.

  3. This rings true on several different levels.

    One of the more difficult things I had to learn as a younger man in ministry was that rejuevenating old Churches in general didn't work.  Organizations, Churches in included, tend to have a life cycle.  Beyond a certain point, the effort required to turn around a declining or dying church and organization is more than that of starting a new one.

    Sadly, some churches and organizations focus at the peak of their financial success in establishing endowments and investments that provide perpetual operating funds that at the time seems wise and prudent.  What happens sometimes is that it keeps alive a ministry or church that effectively died years before maintaining the property and operating expenses and is placed in the hands of caretakers whose motivation to move outside the routine matters can be limited.

    It's harder in larger organizations where the assets are greater and the stakes higher.  Unless there is perceptive leadership that sees the need for change and adaptation before atrophy sets in the vision of the founder becomes institutionalized and the sea change shifts needed to keep the organization moving with the changing needs of the future may be missed. 

    Yet another reason to have a strong, changing board that is more than just a rubberstamp for a strong leader.

  4. The average american family has something like 11 or 17k in credit card debt, then add housing and school debts and most people really can't afford to give…I can't…even people with doctorates and nice salaries are paying as much as 2k a month in debt payments…a lot of students leave college with over 100k in debts, getting a doctorate is not cheap-so where do we go from here. I don't see a way I could ever get out of debt before I die even with a higher ed degree and higher than average salary. It's just not possible to have the expendable income people used to have…

    To me starting or operating a donor funded operation would be very daunting…I think a for profit model would be safer in terms of IRS and financially..

  5. Phil, I appreciate your comments here.  However, your comment related to Liberty (I imagine that is who you were referring to) is a little misleading and really doesn't portray the financial situation there accurately.  All accounts are that the school is swimming in cash from their Distance Education program (they just hit 20,000 students) and were holding on to that debt with a plan in the next 6 months to pay it off with a business sale of school owned land.  NOBODY in the know of that organization had any concerns over money.  When Falwell died his life insurance money was a no brainer to pay it off, but it was in no way a necessary act.  The fact that the school is pumping more than that into it's endowment from their distance ed profits this time (keyword) cash is not an issue.

    The key point of your story is not lost in this.  Fiscal responsibility is of the utmost importance to ministries.  Especially those who receive tax breaks for what they do.  It is our money they are spending.

  6. The contrast between Liberty and ORU is amazing.  LU is not in debt and is built to continue on with or without a well known spokesperson at the helm.

    Both schools have wonderful things to offer, but the leadership style for contuning after the leaders has passed at LU is worth studying.

  7. Phil, one of your comments – "Get new insight" – is especially on target. I once worked for a mega church with a large tv ministry that brought in a respected, outside consultant. He examined every level of ministry, talked to lots of people and then created a thorough report. The document made plenty of solid suggestions but also pointed out employee frustrations, communication problems within the church and areas of leadership breakdown and weaknesses. To protect themselves, the church leaders cherry-picked what topics they wanted to address and fix, then "sanitized" the report (wrote their own version) that was less critical of leadership (themselves). This "revised" version was the one handed to church employees and the pastor.

    This is a classic case of shaping "new insight" to save your ministry, reputation and job. Self-serving? You bet.

    When getting "new insight" make sure it arrives without rose tinted glasses or hasn't been filtered by others. And, btw, a lot of great insight is resident at the mid level and lower level areas of your very own organization. Nobody has asked them, there is no process for idea sharing and many are afraid to speak up out of fear of losing their jobs. Phil, you've written it before that the guy picking you up at the airport or the receptionist in the lobby have a better handle on what's happening and possess great ideas than the leaders up top. Why not listen to the little guy?

  8. I can report that Liberty University is doing very well.  I personally met with Jonathan Falwell and the team since his father’s death, and all indicators are that they are continuing on a positive track.  Jonathan is pastor of Thomas Road Baptist Church and the on-camera teacher for the ministry, and his brother Jerry Jr. is President of Liberty University.  Church attendance is up, TV response is good, and enrollment continues to grow.  I think they’ll do very well and personally like the leadership team very much.

  9. Nanny 911, I know this is not a popular subject, but ever since I finished undergraduate studies at age 23, I have tithed.  Through the years, especially when times were hard and money scarce, my wife and I tithed.  We have learned we cannot afford not to tithe.   After about ten years of tithing, we were able to start giving above the tithe.  For us, it is our financial security through God's Biblical economics.  There were times tithing did require an act of our faith but over time it became much easier and a joy.  If more Christians would learn this, they would be in a much better financial state.  Plus, the added benefit is it provides for and supports the growth of the church. 

  10.  I am done with this website! One complaint after another. No passion for change just a passion to tear people apart! 

  11. Hi Dawz. Don’t get bitter but get better. This website is not what you say it is. Many church leaderships shut people down for speaking what they know is true because there are a lot of insecurities that have not been yielded/submitted to God and other people, and if they were, then they will not feel insecure or intimidated by other points of view. This website is what i would say rather healthy in airing one’s views without feeling condemned and at the same time makes going to Church much more refreshing because you see why certain leaders behave in such way and how you can handle it better (check out comments from Good Commentary and Bart as well as yours truly, Phil). There are positive changes being made I can testify to that especially in the way I pray for my leaders and their recent acceptance to using the media properly. If more Churches gave forums for people/members to express themselves more openly (and contribute creatively to the vision and mission of the ministry)half the problems we see in Churches would not even occur. I could go on but I think this will be enough. You need a negative and positive ion (I think) to make an electric charge. What you do with that charge is totally up to you. Thank you Phil for making this website available.

  12. I actually agree with all the points made by Phil in this section. But it needs to be governed/undergirded by the spirit of love and truth especially when you want to change new leadership. There are novas and there are supernovas all in ministries. One thing we must remember that in the life we live here on earth, nothing is forever and therefore we must be willing to let go at some stage of corporate or ministry growth. We must be willing to make place to release and not hold on forever. In fact the only thing that is eternal is our personal relationship with God and the people brought into it. If Churches operated as small families that grow together and released their children in ministry to their own lives it would be more freeing for the pastors/leadership to have less burdens to carry.

  13. Dawz, could you explain your stand-point a little more? I am actually confused. I have read and contributed to quite a few message boards, and a few blogs, and I really think this is one of the most positive – yet honest – boards that I have participated in.
    You always have to weigh a post against other posts that have been made by the same person, and you have to take into consideration that differing viewpoints can give insight to other’s impressions even if you don’t agree with them.
    I am happy that I have found this blog, and hope to continue reading and participating in discussions here.
    Another thing that I keep in mind while I am here, is that this is not a gossip column (even when it seems that way at times), it genuinely is more like a “lessons learned” session that project managers will have at milestones in a project, and at project completion. If we keep that perspective, we will post more along the lines of not “what” but “how it can be better”. That is really the environment that Phil has designed, and most regular posters respect that and do their best to adhere to it.

  14. Be sure you know how your sheep are doing, and pay attention to the condition of your cattle. Riches will not go on forever, nor do governments (or crowns) go on forever. Bring in the hay, and let the new grass appear. Gather the grass from the hills. Make clothes from the lambs’ wool, and sell some goats to buy a field. There will be plenty of goat’s milk to feed you and your family and to make your servant girls healthy.

    When the ministry is facing financial challenges just some practical advice to apply. This is how good families come out of financial challenges or difficult economic situations. Understand God, trust His Way, budget well and create room/opportunities for growth.

  15. I re-read the original blog post by Phil, and with the point: “First – we know that donors and supporters don’t give to erase debt.” – I couldn’t help but draw a similarity to taxes. I for one have a serious problem being taxed by the government to a degree that hurts, when it appears that their spending is often wasteful, and sometimes in complete disagreement with my beliefs. A church that balances their budget, that pays for growth as it is occurring, and does not accumulate debt is a much more palatable place to put my money… And of course a more palatable place to belong and serve. When I see our government paying more for something than what a private company would pay, it bothers me. This happens all the time. When companies bid on government work, they know that they can cause over-runs, that they can throw in a lot of extras later, and that there are ways to increase their income. And it is allowed to happen. When things go over budget, and there is no money to cover them, we borrow or slow-down. I want to see the government handle my hard-earned taxes better, and if I think that my church is being wasteful, then I want to see that get better as well. Debt is not a place that a church needs to be. I also agree that a church should not be overly investing money for the future. Invest money for a project, keep a reasonable amount on hand for growth, but don’t lay up treasures on earth… as mentioned… funds that are intended to keep a church going and allow lethargy to thrive.

  16. I respectfully disagree with your assessment.

    This is frankly the best blog I've ever run across.  Period. 

    Phil does a great job in my opinion of targetting and commenting on the most important and visual issues related to Christian Media.  Many other issues tie to that as well.

    Controversy is going to be a part no matter what.  That's what drives the news.  That's always going to be an issue.

    I have a tremendous amount of respect for Phil, because from his position I think it would probably be easier not to say anything.  He's a public figure.  Some of these ministries are past, present or potential clients and it would be easier not to take the risk to say something just from a practical viewpoint.

    I've seen him qualify his comments with expressions of personal care and respect for people who are in the limelight with negative issues.  I don't think I've seen a mean-spirited thing said by Phil and I think most here have tried to maintain the same standard.

    I think it speaks to Phil's courage and integrity that he speaks the truth in this manner despite the risks that must present for him professionally.  I bet he's thought through it very carefully and deliberately and attempted to remain principled and kind in this regard.  If there is not a forum of this nature for discussion and learning to take place as to how to handle media and public relation issues then I think the body of Christ as a whole is harmed.

    Speaking the truth with love is a hard standard to maintain and I'm sure we all need to at times back up and think through what and how we're saying things, but I couldn't disagree more with your characterization of this site and its owner.  Phil doesn't put these things in the spotlight.  He comments on them from a very targetted point of view to foster better understanding and management from the Christian Community in order to improve the overall body of Christ.

    I say, keep up the good work Phil and thanks for allowing so many here to interact and benefit from your expertise, experience and kind provision of this place for those professionally and personally interested in seeing improvement.  I have a tremondous amount of respect for you and what you are doing.

  17. Debt has been the "American way" for decades and is a part of capitalism…look at the bankruptcy rate nationwide.  In the 40's and 50's, my mother could go to the local department store and buy on credit.  There was no interest and this encouraged the consumer to buy.  But you better stay current on your bill or no further credit allowed.  Credit cards changed all that and, now, very few Americans live without some kind of debt.  My Dad borrowed to the hilt at the local bank to buy land, cattle and expensive machinery but he paid it off over time.  I, too, incurred education debt but paid it off within 10 years.

    Now, lending institutions allow you to buy a home three times your yearly gross salary.  That is insane…personal, economic suicide.:-)  We want what the Joneses have and more, whether we can afford it or not.  We live way above our means and are encouraged to by banks, credit card companyies and lending agencies.  No one wants to take responsibility for the fix they are in.

    With a few problems at a private Christian university and the WOF police, we now have media coverage of sensational proportions which makes for nonstop "trashing" of selected nonprofits.  Forget the cults, abuse of women and children; forget politicians and their corrupt practices and abuses of power; forget Hollywood and the XXX they exude; not to mention the many insurmountable ills of society.  But, lets tell the church where they have "all gone wrong" because they are "worse off" than the world.  Just remove the church at large from society and then we will have real problems to squall about.

    Debt…it is a global problem, will remain and will never be solved /or eradicated until Jesus comes.  Yes, the church tends to mirror society but we all need to shoulder the responsibility of selfrestraint, stewardship and judicious oversight.  Remember, this is a global issue affecting us all.  It serves no purpose to have a Nazi, prejudicial mentality that unfairly singles out the population "we don't like."  The impression of "legitimate concern" is given but the forum under which it is presented says otherwise.

  18. "No where does it say that a successful organization has to continue to another generation."  Phil, I could not disagree more with that statement.  Proverbs 13:22, conveys the idea of a continuation of inheritance and assets to successive generations.  When did the church start using the world as our standard?  I understand wisdom, common sense, and a multitude of counselors.  However, "seeking first the kingdom of God and all these things shall be added unto you," should be our first order of business.  Our problem is we do not know how to pray and hear from God.  We aren't half as spiritual as we think we are or should be.

    Whose to say an organization will go south after the founding father steps down.  Growth is a process of sometimes 3 steps forward and 2 backwards.  Our family farm and ranch of 5 generations took on many faces depending on economics and management.  I'm thankful during the tough times we did not resign to the pressures of high costs and low prices…not to mention those who would have rather seen us fail.  The alternative was big corporations and loss of our family heritage.  I also am thankful those like Joel Osteen did not "faint" and turn back because the patriarch passed on.  We have lost many fine and valuable institutions because of changing times and a lack of commitment and leadership from successive generations.  I was born and raised Methodist, so I can say this.  The Methodist church of today is so far removed from what the Wesley brothers originally started.  Though still in existence, they nolonger even project a global message of, "salvation through grace by faith in the shed blood of Jesus Christ."  Should they close their doors?  I think not…many have returned to their roots with renewed faith and even to the manifestation of the gifts.

  19. Try as I might, I just can't get out of Proverbs 13:22 that a ministry has to continue to another generation.  That's a real stretch.  Great men and women of God throughout history have accomplished great things, and didn't seem to need a successor.  Trust me, if a qualified man or woman is ready to take it to the next generation, then I'm the first to say "Go".  In fact, I've been a part of the helping the transitions of people like John and Joel Osteen.  But if there's not a vision, and if it's just a matter of keeping the family on the payroll, then let's move elsewhere.  Bottom line – is the mission still there and are the successors qualified to make it happen?  Great.  But if not, be wise enough to focus your energy elsewhere.

  20. I once heard John Mawell say "The greatest potential for growth of a company is growth of it's people." Isn't the highest level of leadership building up and equiping people to become their successors? Isn't ministry supposed to be building up people and not just building a ministry? I believe that if ministries cannot build people than they have missed the point of ministry. What motivates and equips people?

    The center for Creative Leadership in Greensboro NC studied 105 successful executives and discovered:

    1. They admit their mistakes and don't blame others for their short comings.

    2. They were able to get along with people.

    3. They had strong interpersonal skills and were sensitive.

    4. They were confident and calm under pressure rather than volatile.

    What if ministry leaders became a model that others want to follow? Aren't we supposed to lead by example to mentor those around us to do the same.

    In closing I believe if ministry leaders have the skills needed to lead then having a successor wouldn't be difficult. Billy Graham is a fantastic example…

    Just a thought…     

  21. "Qualified man or woman is ready…"  The word, "qualified," is probably the hangup with many people and was in Biblical times as well.  Phil, all we have to do is look at Moses, David, Gideon and Joseph and none of these people thought they were "qualified," and neither did their counterparts.  Only until they were placed in position to be used (by faith) did they see the hand of God on their lives.  In my chosen profession, I shed many a tear of doubt and fear in my early years of education and even beyond that.  I simply could not see myself doing what I was supposed to do in practice.  It was a process just like Joseph and, today, I can humbly say I am a sought after practitioner in the area of cardiovascular anesthesia.  I cannot imagine doing anything else…it just flows and, yet, everyday is still new and challenging.  Were those like Abraham Lincoln to have given up after the first, second, third, fourth tries…we would never have had some of those great men and women.

    At least from a NT Biblical standpoint, whether it is the parable of the talents or the giving/sowing law of reciprocity, God is a God of increase, rather than a God of decrease/or retreat.  I think there is a scriptural basis for furthering the gifts, assets and talents of one generation to the next.  Inheritance is not a one time thing, as in "to inherit," but rather the implication of a continuation of those assets…to successive generations, if you will. 

  22. Jeanette, "…highest level of leadership is building up and equiping people to become their successors," hits the nail on the head.  We must be able to duplicate ourselves or we have done nothing…this is the good news of the Gospel…making disciples which are the ultimate successors of what we started.

  23. Note that some of the websites of the six televangelists under investigation are reporting pie-chart financials of where their donation money goes.  Not surprisingly some report only 52% or only one third goes to television costs.  The rest, where it goes…isn't hard to guess.  Their homes.  Their jets.  Their tithe to peer ministries.  They feel no obligation to spend the bulk on what they receive it for, which is television ministry.

     For example, if you gave me one hundred million a year to do a media ministry, say I spent only 52 million on the media end.  I could jet to my favorite international spot of need, say Russia — because the girls are pretty there — and I could wave, oh say, 18 million dollars a year in front of their poor ministry operations.  For 18 million dollars a year, I'd get the respect of a KING!  I'd be KING of goodness to those Russians that then depended on my 18 million dollar per year generosity. 

     It would be a HOOT!  I might even get to pick among a wide variety of good looking Russian Orthodox chicks.  I might jet one home to become my wife. 

    All these shenanigans would be so easy if I could but play with a PORTION of that hundred million dollar a year income, of which so much wouldn't be spent on television.  What a saint I'd be.  I just wish I thought of this before KCM, TBN, et al.

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