The Economic Engine of a Church

by Don Harkey

I want to use my "Free For All Friday" to talk about a few important concepts we have learned in our Vision and Mission journey at Messiah Lutheran Church. We began our journey almost 6 years ago and are continuing today (its a continuous process!).

This week, we talked about what drives an organization. Is it profit or passion? The real answer is both. Great organizations know their passion and understand what drives profits. However, profits is not really the right word here. The right word is resources. Great organizations know their passion and understand what drives resources to their organization. This is true for profit companies and for non-profits.

So what drives resources to a church? The old model is that members of a church will give "X". To get more money, you need to get more members. If you ask for money for something new, you'll need to take away from something old. When money runs low, you ask the congregation for more. If you can keep pressure on the responsibility of being a good congregant, your members will keep giving.

The new model is that members will give when they see a need. To get more money, you show the members the need and get them to buy into it (or not). If you ask for money for something new, you will get extra money as long as the congregation agrees and sees the need. When money runs low, you show the congregation all of needs being filled by the budget or collect enlist most of their involvement in determining the needs to be filled and how to fill them. If you maintain a focus on the mission of the church, your members will keep giving.

This is a subtle, but extremely important difference. If your congregation is spending its time talking about internal power struggles or trivial issues, the church isn't communicating the need for funds and resources will be driven away. If your church spends its time talking about its mission and how it will fulfill its mission, the church will get the resources it needs.

The best example I can give is at Messiah Lutheran Church. 6 Years ago, the annual budget for the congregation was just under $400,000 per year. The church had paid off its mortgage and had just started its mission process. The church was full and knew it needed to expand to grow, but the congregational leadership wasn't sure how to do it. How do you get the resources to grow with a $400K budget already stretched tight?

Once the Vision and Mission of Messiah was defined, the path became clearer. Growing the church was necessary not only to serve our existing congregation, but to serve others and support all of the existing and new ministry opportunities. The congregation charted a course toward growing the church at its existing site, not just to grow, but to fulfill its mission. More than 80% of the congregation voted in favor of the project.

A capital funds campaign was launched to collect 3 year pledges. The congregation, with an annual budget of just over $400K per year at the time, collected almost $1,000,000 in pledges. Over the next 3 years, the church would collect almost every dime. The construction on the $2.7MM expansion was begun and is scheduled to be completed by early summer. The discussion in the church continues to be about fulfilling our mission using these gifts. What happened to our church budget (giving)? It swelled to over $500K per year! The congregation gave more to the project AND more to the operations budget!

While the economy is down, our giving increase slowed a bit, but the congregation continues to stay focused on its mission. The congregational leadership took several steps to control the budget to show good stewardship, but in the midst of what could have been a crises, the congregation continues to stay focused on its mission. This lead the church to the Lighthouse Ministry (read the blog from 3/18/09 for info). This is a $250K ministry that the church is taking on... and the church continues to find the resources to fulfill the mission!

The "economic engine" of the church is when its members have a common mission or purpose. A friend once asked me during our first campaign (we are currently launching a 2nd campaign to pay our debt from the project) how we ask members for money. I told him that we don't ask for money, we ask for mission.

There is a lot to be learned from this experience and I pray that other churches take this to heart. I also pray that businesses look at the lessons learned here. Passion is truly productive!

Scooby Snacks

by Don Harkey

Its 3:20PM and I am running home. I want to get home in time to grab a cupcake for a snack and catch Scooby Doo at 3:30PM. By the way, I'm in the 3rd Grade... or at least I was.

I used to really love Scooby Doo. I would try to guess who the villain was before he or she was unmasked at the end by those "meddling kids". Hanna-Barbera certainly had a formula and within that formula was always a scene where "the gang" needed Scooby to do something dangerous or scary. Scooby would always refuse until someone whipped out the conveniently branded "Scooby Snacks". "Would you do it for a Scooby Snack?" "Would you do it for two Scooby Snacks?" Eventually, Scooby (and sometime Shaggy) would find their price point and decide to take on the task in exchange for the Scooby Snacks.

Many people believe that in business, the "worker" works for their own form of Scooby Snacks. A management professor told me once that his students thought that the only two ways of getting a worker to do something was to "reward them or punish them". No one wants to be the bad guy, so management prefers the reward. If you can hit your targets, I'll give you a bonus.

Many people also believe that profit is what drives a company. It's time to launch that new product line. Would you do it for a Scooby Snack? Would you do it for $140,000 in revenue? So companies and people have a lot in common with Scooby Doo. They trip through life looking just looking for a snack. (Hint: I am being sarcastic here!)

What about non-profits?

The very existence of non-profit organizations challenges our "Scooby Doo View" of people and organizations. Yes, some people get paid to work for a non-profit, but often times the pay is significantly less than they could get doing similar work for a "for profit" company. Churches do most of their work using volunteer labor working for nothing more than a cup of coffee on Sunday morning. What's going on here?

The fact is that while people can be motivated by money, money is a poor motivator. While this may seem counterintuitive within our TV society, it is actually very intuitive if you apply it to your life. What is truly most important to you? If you could do anything right now, what would it be? Are you saying this because of the money you would make?

Consider a person who is paid $50,000 to change diapers, clean up puke, and wait hand and foot on another human being who cannot take care of themselves. Now consider a parent who does the job for nothing (actually at a significant financial cost). What is the difference?

The difference is that people want to have a purpose. The 3 needs that drive motivation are competence, autonomy, and relatedness. The first two are common for people in their jobs. You were probably hired because somebody thought you were capable. Hopefully, you know that you have a choice to go to work or not. However, how do you relate what you do with the others around you and with your core purpose?

"For-Profit" business can learn a lot by looking at Non-Profits. Many of these organizations have low budgets and struggle continuously for resources. However, these same organizations have a clear vision (like Erica at Lighthouse or the great folks at Messiah Lutheran Church) and do amazing things. People are willing to bend over backward when they feel "called" to do so.

The challenge for businesses is to find this purpose. What is higher mission (higher than profits) that makes them special. The story of Pixar is a great example. The people at Pixar have a great passion for making great movies out of great stories. They have a remarkable track record of success. The reason is that they are focused on great stories rather than target markets and projected profits.

Find your purpose and your profits will come!

Same Goal, Same Passions

by Erica Harris
Lighthouse Child and Development Center
Springfield, MO

According to the most recent Community Report Card for Springfield, MO, more than 11% of the general population and at least 20% of Springfield children are living in poverty in our community. No one wants to think that young children are going without food, clothing, and shelter – but they are. In this tough economic time, more families will be moving into uncharted territory, struggling to make ends meet. Who wouldn’t want to change these statistics?

At Lighthouse Child & Family Development Center, we are changing this statistic. We’re working with a passion to increase self-sufficiency in the Springfield community. We are accomplishing this through holistic programming that includes intensive family case management, parent and child education, quality and affordable childcare, along with significant volunteerism. Lighthouse is changing lives.

When it comes down to the nitty-gritty, we run this non-profit like a successful business – the real difference: our desired outcomes. Most for-profit businesses are focused on a monetary profit; Lighthouse is passionate about profiting the community we serve. If we reach our goals, our community will reap the benefits. Like any business with a true vision, we are group of people that are working together toward a common purpose.

Lighthouse staff, board, families/clients, volunteers, and community supporters like those at Messiah Lutheran Church all understand that we are striving to enrich lives, and we’re in this together. Messiah will soon host their own Lighthouse program to educate and support 34 additional children and families in a journey toward self-sufficiency. When two organizations with a similar vision can join forces, the impact is exponentially greater.

We succeed and fail together. We celebrate and lament together. We are a Lighthouse family, and we believe we will reach our goals together. It’s amazing what a group of committed and motivated people can do when they are focused on the same goal. That’s true to for- or not-for-profit organizations.

Vision and Mission

by Don Harkey

It is estimated that there are over 300,000 churches in the United States. This makes churches the most common non-profit organization in this country, and probably in the world. Most people have been to a church at some point in their lives, but have you ever thought of a church as an organization or even as a business?

About 6 years ago, Messiah Lutheran Church in Springfield, Missouri hired a consultant. The consultant interviewed many members of the congregation to assess the overall health of the organization. The results were presented in a report. The report did not contain any earth shattering news. The congregation was healthy, but stagnant. There were no major rifts in the church... no issues that threatened its existance... only a steady attendance record over its 45 year history.

The report contained one critical piece of advice; develop a Vision and Mission. Where are you going? What is your purpose? Why are we here? These were the question posed before the congregants of Messiah Lutheran Church only 6 years ago.

6 years later, the congregation is transformed. It is still the healthy congregation with a strong culture of family that existed during the study. However, today, the church is alive with excitement about the future. This summer, the church will complete a $2.7 million building project at its existing site in Springfield, for which its congregation raised almost $1 million over the previous 3 years.

Almost 100 members of the church spent almost 2 years working on the answers to those original questions and the resulting answers lead to the new energy. The congregation learned a lot about itself in its Mission Statement.

"Guided by the Gospel we: Welcome All to Worship, Make Disciples, Hunger for Ministry, Nurture Youth, Gather Resources for Growing Ministries, and Offer Healing and Care to All in Need"

This simple Mission statement is said after every worship service and is repeated in congregational meetings, team meetings, and anywhere where a little vision is needed. The organization is focused on utilizing its people to find its mission. It knows that its "economic engine" is members of the church who see that the church is fulfilling a need.

Would this type of process work for a "for profit" business? Would it be benefitial for leaders within a business to sit down and discuss the answers to questions like "why are we here" and "what is our purpose"?

The answer is "absolutely"!

As Jim Collins pointed out in "Good to Great", a company that knows what it is passionate about is more successful than companies who focus too much on their dashboards. This is intuitive to anyone who has ever worked with people. People are much more creative and energetic when they are working together toward a common purpose. Remember that "relatedness" is a major factor in personal motivation. Within an organization, profit or not, understanding the passion and common purpose is critical.

Still... non-profits are very different entities. There can't be too much more in common... can there?

Want to learn more about Messiah Lutheran Church? Visit www.messiahmo.org.

Non-Profits vs Profits

by Don Harkey

Most of us are involved with a non-profit organization somewhere in our lives. Whether it's a church or a charity organization, non-profits are everywhere. Yet in the world of organization behavior, non-profits are often considered to be "second-class" organizations. Do the same principles of organization apply to non-profits like they apply to profits? What about principles of motivation and management?

Jim Collins felt compelled to address this issue after publishing his groundbreaking book, Good to Great. Good to Great outlines the common traits of organizations who make a jump from being very good at what they do to being great at what they do. The natural question for leaders of non-profits is, "does this apply to us?". One of the principles of the book, for example, is the "hedgehog concept". It says that great companies know the answers to 3 questions.

1) What are we the "best in the World" at?
2) What are we passionate about?
3) What is our economic engine?

Organizations of all types have great difficulty answering these questions. The buzz from the non-profit leaders came from the 3rd question. What is the economic engine of a non-profit? The "economic engine" of a profit organization is a good understand of what drives profits to the company. For example, Walgreens discovered that the key to its profits comes from the number of times a customer visits their stores. Kimberly-Clark learned that its profit comes from the number of consumer brands they carry.

What is the "economic engine" for a church? What is the "economic engine" for the United Way? This spurred a quick spin off monograph from Jim Collins called "Good to Great and the Social Sectors". The booklet changes "economic engine" to "resource drivers" and contains the statement "why business thinking is not the answer". Do the rules really change from non-profits to profits?

This is the question we will be exploring this week. We'll talk about specific non-profit entities and see how they are similar and different from profit organizations. This knowledge will help us better understand profits and non-profit organizations! Enjoy!