Tuesday, March 31, 2015

No Margin. No Mission.

Board members and CEOs often tell me they get pushback on cost-cutting initiatives with pious-sounding rebukes from staff members: “Is this a ministry or a business?”

My opinion: that’s a big-waste-of-time question.

Jesus never asked that question.

Let me explain. Here in North America, we enjoy the luxury of tax-deductible giving. That’s good news and bad news—because the associated nonprofit machinery has muddled the biblical principles of doing God’s work.

One of my favorite seminary profs reminded our class, “We’re nonprofit, but we didn’t plan it that way.”

Another colleague weighed in, “Nonprofit is a tax category, not a management plan.”

Last week I heard a board member succinctly describe the issue in four words:
“No margin. No mission.”

When staff members, or volunteers, or even board members push back on the importance of profit, margin or cash reserves—it often means we’ve missed opportunities along the way to discuss biblical money principles. Questions like “Is this a ministry or a business?” trumpet bad theology and ill-informed core values about money management.

So is it time for a “no margin, no mission” discussion?

• Discuss what the Bible says about money, including Proverbs 21:20 (TLB), “The wise man saves for the future, but the foolish man spends whatever he gets.” According to Greg Laurie, “The Bible offers 500 verses on prayer, fewer than 500 verses on faith, and more than 2,000 verses on money.”

• Discuss sustainability from a biblical viewpoint (Luke 14:28-30) and from a nonprofit viewpoint. (Example: Talk about the four quadrants of mission impact and sustainability as described in Nonprofit Sustainability.)

• Discuss cash reserves. According to the ECFA 3rd Annual Nonprofit Governance Survey, about one-third of ECFA-accredited organizations have operating reserves of six months or more. Almost 84% of board chairs would like to have at least three months of reserves within the next 18-24 months.

• Discuss the future.  Read Ron Mattock’s 2008 book, Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength. Every chapter includes “Five Great Questions for Your Next Board Meeting.”

QUESTIONS: Are you getting pushback on the way your ministry manages finances? Is the push-back based on bad theology or ill-informed money management approaches? Is it time for a time-out and a transparent discussion? Who should lead that?

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