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Messages - Mark_Hofman

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121
LutherMan:

It's interesting to me whenever people refer to overhead as "skimming," as if any portion not going to the end-user is unrelated to the work that is being performed.  So, what definition are you attaching to 'overhead'?

Folks may want to spend some time reading the information available at: http://overheadmyth.com  This is an effort of the three major watchdog organizations: Better Business Wise Giving Alliance, Charity Navigator and Guidestar to shed some light on a topic that has really fouled things up for a lot of people.

The cost to solicit donations (when they aren't freely offered up), and especially the cost to care for the donor who makes gifts, are part of the cost of doing 'missions' in this era. Generating and mailing tax-deductible receipts, answering questions from people who want to be good stewards, providing accountability reports, keeping records over the course of a year in case receipts are misplaced, ensuring donor restrictions are met under IRS regulations and the specifications of the Financial Accounting Standards Bureau (FASB) etc. have to be borne somewhere, by someone.  The costs of promoting mission opportunities in ways other than solicitations have to be borne by someone. 

Whenever my team and I pick up the telephone, or answer an email from a concerned or enthusiastic donor, or send out materials that have been requested, or tailor a donor's record to better align with their interest, the organization incurs an overhead cost.  (But I'm answering this thread on a Saturday night, on my time and simply because of my personal and professional interest in 'overhead' as it relates to non-profits)

If the concern is that an organization skims money from mission donations to, say, pay the guy that cuts the grass at the office building then your concern would be well-placed.  But there are rules that discourage (if not prohibit) that kind of thing from happening.  A true example for the LCMS is that Board of Director policies prohibit the use of restricted contributions to fund things like the salaries of the executive officers.  So your mission donation can't pay the President/CEO, vice presidents, or other executive officers salaries.

You can certainly find ways to send 100% of your donation to the field.  I can tell you, as a trained professional, you will run some funky risks doing it that way.  For example, pick a missionary in Africa and mail them a personal check.  Whether they can actually cash that check and get 100% of the equivalent funds from the local bank isn't always a certainty. The local bank in Africa may charge a processing fee - overhead. They may charge a currency exchange fee - overhead. The bank, depending on the country, may want a gratuity for handling your check - overhead.  Because you made a check payable to the individual missionary, you lose the tax-deductibitliy of the donation (ref. IRS Publication 526). And you have no real reassurance that the missionary will use the money to spread the Gospel rather than simply go out for a nice relaxing evening on the town, or to buy a DVD of their favorite movie.

My point is that anyone who uses overhead as a measure of effectiveness of an organization - or even efficiency for that matter - is misguided. Perhaps a better question to ask is what kind of impact you want your support to have, and which organization - regardless of their overhead - is in the best position to help you make that impact. 

As an aside: I also find it interesting that most nonprofits - including church related ones - have an office or department that exists to serve donors, pastors and financial advisers - and provide printed or electronically accessible information to help people make informed choices. My team even provides a toll free number and an e-mail address to make it easy to contact us, yet I constantly read discussion threads about these kinds of topics and wonder: What are we doing or not doing that keeps people from calling us to inquire about these kinds of things?

But about that 'skimming' thing again - what feeds that perception? 

122
Your Turn / Re: LCMS to Open New Office in DC
« on: March 04, 2015, 05:46:37 PM »
Lest the conversation about 'lobbying' continue to drift too far afield, the proposed office is applying for recognition and incorporation as a 501(c)(3), not a 501(c)(4).  It is intended more to speak OUT from Washington to the LCMS (clergy, church workers, laity) on affairs affecting life, biblical marriage and religious liberty, not IN for the LCMS to influence legislation.  If it were intended to lobby, in the commonly understood way, it would have to be chartered as a 501(c)(4).  As a 501(c)(3) it must accept the prohibition against telling people how to vote or who to vote for as well.

Yes, it will share with Washington D.C. folks the LCMS perspective on issues, because the LCMS is being asked to join in the discussion and bring to bear some of the treasures of Lutheran theology we steward on the three named topics.  But the preponderance of it's work is to listen, observe, understand, translate and the communicate out to Synod about issues of great and grave concern to its members and households, as government oversteps its Constitutional boundaries and intrudes into realms assigned by God to the church. That is the function that qualifies it as a 501(c)(3) - informing and equipping of Synod's people - not a 501(c)(4) which would entail advocacy to lawmakers on behalf of Synod's people.

That distinction is important -- (c)(3) vs (c)(4) -- and should not be covered over or smothered in the discussion.

123
Your Turn / Re: When zero equals good
« on: February 19, 2015, 10:42:32 PM »
The blog statement dated Feb 6 would have reflected information reported to the Board of Directors at their November meeting or perhaps the August 2014 meeting, not their most recent which took place last weekend. I'll try to share some additional information (not everything) to chew on, for those who enjoy dispensing color commentary.

The LCMS receives 40% of it's total annual gift income in just one month: December. Revenue in November supplies another 15%. But the news regarding borrowing against designated funds is due to a number of factors beyond that statistic:

1. Yes, there are fewer employees at the International Center.
2. Units (used to be departments, or boards or 'ministries'), at least as long as I've been there, have consistently exercised very good spending discipline, and most are regularly under-spending their authorized budgets.
3. There is a greater emphasis on soliciting and encouraging both unrestricted gifts, and agile "use where needed most" restricted gifts rather than very tightly restricted contributions that may be used only for one very specific purpose and not anything else.
4. We've been blessed by a number of above average unrestricted and 'where needed most' restricted bequests.
5. A multi-year discouraging (but understandable) slide in unrestricted support from Sunday-morning worship offerings, routed through district budgets, has slowed. Several districts (not all but several) have stabilized and even increased their annual pledge of financial support to the national office (SDG).
6. Synod implemented a hierarchy (priority) for fundraising and spending that works opposite to one another:  try to raise unrestricted and less restricted funds vs. tightly designated gifts first; but when spending, draw available tightly restricted first (according to the restrictions imposed by the donor), and supplement or fill the gaps with where-needed-most and unrestricted funds as necessary.  That approach wasn't possible before the restructuring.

I'll stop here for a moment.  This isn't how the borrowing is repaid.  This is what must be done to avoid borrowing in the first place.  Spend less than you take in, and spend what is available intelligently with very good discipline by management.

Good budget discipline also sets aside dollars for debt service and repaying borrowed internal funds, and a small unrestricted contingency.  The President, Chief Financial Officer and the Board have held a very tight line in a way that created the conditions to repay money borrowed from these very tightly restricted designated funds (at one point Synod maintained in excess of 1,300 tightly designated accounts and raised mostly to replenish those accounts.

(And since I took the bait and stepped on the soapbox, I will also raise an issue brought before the 2013 Convention that impacts Synod's budgeting process as well: the $2.25 million annually in unrestricted funds which must be used pay principle and interest on a consolidated debt incurred by Concordia University System schools, a debt incurred over the course of many decades.  Necessary to be sure to keep institutions solvent in hard times; however, it is a nagging use of generous "work at large" funds that could instead be used to proclaim the Gospel, serve and support districts/congregations better, bolster seminary subsidy, send more missionaries, etc.  That debt, too, is slowly being repaid.).

But the real reason this was possible is because people - regular PEOPLE - in the LCMS, including communities of faith gathered around Word and Sacraments in congregations with good pastoral care, walked along side each other - knowingly and sometimes unknowingly - giving of God's blessings in both life and death to make it happen. President Harrison didn't - and couldn't - repay that debt himself. Neither could the CFO, Board of Directors or employees of the International Center. God's people in the LCMS, living out their baptismal faith, made that possible. 

If nothing else, my brothers and sisters in Christ, please stop and whisper a prayer of thanks to God for each person who sacrificed personal needs and wants, and supplied what was necessary over the past several years, to make the repayment of that internal debt possible - while also sustaining our Synod's national and international witness and mercy work.  Please.  We owe them (and perhaps some of you) that much.

It's a moment to give thanks, and to marvel at the grace of our God who does all things well using simple, sinful but forgiven people.

And if you take the time to read the entire statement, this same process (whether a miracle, good leadership, grace, whatever...) has created a three month reserve of operating cash. President Harrison shared news in the same notice that the LCMS continues to make progress in fulfilling the will of Synod, expressed in Convention, to double the number of LCMS missionaries.  He also sneaks in an insightful statement that decision-makers are even monitoring the pace of growth to ensure the missionary force does not grow at a rate the Synod's people cannot financially bear.

And that's all I have to say about that. Sure, we're all a bunch of no good "bureaucrats," but every employee and leader I know is trying their best to steward what the church entrusts to us.  We're not perfect, and we must be held to account. Seeking to understand the truth means, in a situations like this, we must acknowledge (at least) that more people have been involved than those who drive or walk into Kirkwood every morning.  I firmly believe the President's statement of thanks was directed at all those other people - God's stewards coast to coast and border to border - who took courage and joined forces to make this good news possible.

(Forgive the spelling, grammar and punctuation errors herein.  I can't find my reading glasses.)

124
Your Turn / Re: Gun Control Issues and Clergy
« on: August 31, 2014, 12:14:26 AM »
I knew an LCMS preacher who wore cowboy boots and packed heat under his cassock when standing in the pulpit.
That's how it should be.  We live in dangerous times...

It was western Colorado and in the '60's.  It had nothing to do with dangerous times and everything to do with his persona.

That sounds like a pastor in Glenwood Springs we used to camp and fish with.  He taught my dad a lot about camping, hunting, fishing, and how to put an edge on a pocket knife. If it's the same pastor, it was his persona.

125
Your Turn / Re: The Direction of LCMS World Mission
« on: August 16, 2013, 03:16:09 PM »
Just a quick (and possibly minor) point that should be injected into this discussion for those who don't follow LCMS things so closely.

Post-restructuring, the Office of International Mission (LCMS International Mission) is not simply LCMS World Missions re-branded/re-badged. The two names are not synonymous. 

LCMS World Relief and Human Care, as a stand-alone entity overseen by an elected board, no longer exists even though the type work it carried out continues as "Mercy".  LCMS World Mission, as a stand-alone entity overseen by an elected board, no longer exists even though the type of work it carried out continues as "Witness".

Witness are Mercy are now being done together, synchronized, with the distinction of happening either internationally or nationally.  For national mission, the added work of a number of old stand-alone departments (Youth, Worship, Stewardship, etc.) that rightly is about our "Life Together" is also being synchronized.

This shift makes the experience question a bit more murky. Experience with what?  Just missions (witness)? Just human care (mercy)? Both?

All this is under the supervisory aegis of the Chief Mission Officer who, I can attest, fully understands the cross-cultural element.  He also understands the socio- economic- and political nuances of foreign environments, and is fully qualified in the arena of strategic planning. Those of us serving under him (4th Commandment) agree to execute the defined mission of the LCMS as the elected leadership designs and defines.

Again, the first point - OIM is more than a re-named WM - is a minor contributory factor to this thread; however, it is one that should be considered in the context of the discussion for those who haven't been following restructuring in as much detail as others.  Will bow out now.

Mark Hofman

(who - full disclosure - also wrestles with the issue of strategic direction and vision as the executive director of LCMS Mission Advancement because we ultimately have to communicate it to investing stakeholders)

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