Showing posts with label church budget. Show all posts
Showing posts with label church budget. Show all posts

Monday, March 9, 2020

Good Read on Episcopal Cafe: Plan Your Escape Route Now



There’s a good article on Episcopal Cafe by the Rev. Cameron Miller, titled Plan Your Escape Route Now. The article, which discusses the importance of being prepared to let go of outdated, burdensome church buildings, is highly relevant to Grace Episcopal. The article can be found here.

In the article, Miller discusses various churches at which he served, ranging from a small, simple rural church to a majestic Gothic edifice. All but the small rural church required massive repairs. Not surprisingly, the only church building that didn’t prevent mission due to its cost was the small rural church.

Carrying the lesson forward, Miller reports that his current cure is Trinity Place, a congregation that shedded its former church building in favor of a small storefront. The result?  A vibrant renewal of the parish as its space serves multiple groups in the community.

The lessons Miller shares are important for Grace Church. As the parish pumps more than a $1 million into replacing the HVAC system, with much of the money borrowed, it gives short shrift to the local community. Less than 3 percent of the budget goes to serving others. At the same time, the parish devoted more than $1.2 million to buying a private residence for Bob Malm, and paid a bonus of $100,000 to him in 2014, at a time when it was cutting employee health benefits and donating $3,000 to Chris Byrnes’ farewell party. The latter wasn’t even drawn from income, but rather from savings.

Just imagine what would be possible if these resources were put into serving those in need.

And exactly as Miller discusses with his previous churches, even with all the money being poured into the building, there’s hundreds of thousands of dollars of work that will be needed. Much of that work is not even on the radar for vestry members or staff, including what will happen when the original copper pipes start to fail. That alone will be a huge project, and yet no one pays attention to it, let alone budgets or plans for it.

So what is Grace’s plan? How will it cover the hundreds of thousands of dollars’ worth of work that will be needed? Is this the best use of the church’s rapidly dwindling resources? Are the church’s current priorities healthy? The church has plenty of money when it decides to take up a purse for perjuring priest Bob Malm, but not so much when it comes to feeding the needy.

If the answer to the latter question is no, what is the church’s escape route?

Monday, February 17, 2020

Why Grace Church and the Diocese Cannot Win in Court


As Grace’s discernment committee begins the long, arduous road towards finding a successor to Bob Malm, the unpleasant reality of the mess Bob left behind looms. That includes the various lawsuits now under way against the parish, the diocese, and members of Bob’s family, which were precipitated by Bob Malm’s conduct as rector.

It’s also true that neither the parish, nor the diocese, can win in court.

What do I mean by that? Couldn’t they find some way to get the current cases dismissed?

The answer is simple. All litigation involves hazards and risks. So yes, the church and the diocese could conceivably obtain favorable results in court. But that doesn’t mean they actually win.

As with many conflicts, the current conflict is one that involves myriad issues. Many are not amenable to resolution in court. These include:
  • The church’s reputation.
  • Interpersonal dynamics within the parish.
  • The church’s role in the community.
As things stand, the worst thing that could happen to the church would be to prevail in court. Doing so would further reinforce the current conflict, while providing additional grounds for concern among outsiders who are looking at the church.

Moreover, a victory would help those with their heads in the sand assure themselves that, in fact, Bob Malm could not have committed perjury and otherwise been abusive.

I mean, he’s such a good guy. He’s caring. He married us. He baptized my kids. His sermons are great. Anyone who thinks otherwise is deluded, maybe dangerous, certainly dysfunctional.

These are the logical fallacies and magical thinking that the Kemp Williams, Jean Reeds, Easter Thompsons, Susan Goffs and others in the church and diocese deploy to avoid dealing with the inconvenient truth, which is that Bob Malm is a bully, a liar, a perjurer, and someone who thinks it’s okay to try to drag a dying woman into court. One has only to read Sugarland Chiow’s courtroom rhetoric and fabrications to realize just how toxic this paradigm has become. Or as one Episcopal priest with first-hand knowledge of the issues at Grace says, “They have a lot of work to do.”

Thus, a courtroom victory would allow the blind sycophants in the parish to brush things off, assure themselves that that damned Bonetti is “unhinged,” and return to their toxic ways, oblivious to the damage they cause to a church they claim to love. But if they love Grace church so much, why do they behave in a way that is causing lasting harm to the parish?

Think about it: In all the emails from within the parish, we consistently see Bob Malm trying to stoke fears, while Jean Reed, Kemp Williams and others claim to be able to do what no licensed mental health professional may legally or ethically do, which is to opine on the mental health of someone with whom they have not met to discuss the matter directly. Yet in the midst of this bloviating within the parish, the one thing one never sees is any concern for the person who, in Jean Reed’s words, is “troubled.” Perhaps church members would do well to spend less time gossiping about others, and more time dealing with their own shortcomings. In fact, if they did, they might come to understand why neutral third parties say, “They may seem sane to themselves, but this group of parishioners seems hateful and childish to outsiders looking at their behavior.”

Nor is the diocese any better.

From that corner, we get the laughably appalling notion that clergy misconduct is only actionable if it it illegal. That conclusion enjoys the full support of Bishop Susan Goff, the Rev. Melissa Hollerith (who, amusingly, teaches ethics at St. Albans, and whose husband Randy is dean of the National Cathedral), and undoubtedly that of JP Causey, the diocesan chancellor. The latter is noteworthy, as his capacity for bad legal advice appears to know no bounds. For example, in the Title IV case at St. Thomas’ in McLean, Causey would seem to be the knucklehead who suggested to the Virginia bishops that they ignore the requirement of Title IV to provide a pastoral response to the congregation, but instead to keep the matter at arm’s length for fear of liability. The result was lasting damage and hard feelings within the parish. Nothing like protecting the organization at the expense of the people who make it up, huh?

And the cluelessness continues. The Rev. Sven vanBaars, the dingbat intake officer who thinks that clergy misconduct is only actionable if it results in criminal prosecution, has been elected as a delegate to general convention (GC). I guess that’s good—he can hang with fellow delegate JP Causey at the upcoming GC in Baltimore and commiserate about the protesters outside.

The bottom line is this: Until Grace Episcopal learns to be a church, versus a religious club, and worships God, versus Bob Malm, it will decline.

Yes, Bob’s carefully crafted communications have all the right church-speak and Jesus-babble, developed through observation, mimicry and repetition, but they are empty, hollow. Similarly, the church building is full of bright shiny things, carefully polished, but they mean nothing.

Same for the friendly, welcoming congregation. Yes, people are cordial, but criticize Bob Malm and see just how long that welcome lasts. Just check out the comments from the parishioner urging me to commit suicide if you want proof.

Same for the church’s other promises. For example, giving is supposed to be confidential, but Lisa Medley has no problem posting details of your giving on social media, even though, true to form, she gets the specifics wrong. Would you really want her potentially posting details of your bequest to the church on social media? The Legacy Society (of which I was a member) promises confidentiality, but if the church cannot protect your information while you are alive, why would you think it will do so when you are dead?

Of course, it is true that parishioners have done an admirable job of stepping up giving, even as number of pledging units collapses and attendance drops to record lows.

But the reality is that this is a church that is still trying to defend Bob Malm’s perjury, his efforts to drag a dying woman into court, and his various courtroom fabrications. Indeed, one has only to look at Malm’s emails to diocesan officials, replete with calling me “sick,” “twisted,” and “dysfunctional,” to know just how toxic the parish has become. And in honor of Bob’s efforts, the church has named the “new” narthex after him!

Nor is time on the church’s side. With vast swaths of the church membership well into retirement, the next 10 years will result in major demographic shifts. And yes, bequests to the parish may buy time, but even if parish investments were adequate to fully carry the church’s operations, the church is nothing without people in it. (Covering just current operating and maintenance costs for the building would require an endowment of $3.75 million, for the record.)

Neither is the church’s role in the community likely to pull in members. With well under 3 percent of total revenue going to local outreach and the diocesan pledge seriously underfunded, the place is hardly a center for outreach, and it sure as hell isn’t doing any healing.

Going forward, the church’s only hope is to clean up its act. When people see that Grace Church really is what it claims to be, a center for outreach and healing, then it can begin to rebuild. But as long as it clings to the notion that Bob Malm could not, would not, be a bully and a perjurer, it is in dire trouble. Nor is it going to thrive when people in the church think it’s okay to call others “domestic terrorists;” to urge others to commit suicide; and for Alison Campbell, the altar guild, and the choir to play their childish games.

So yes, the church could win in court. But it can’t and won’t shut down the ability of people to criticize its actions, to discuss the parish in public and in cyberspace, and to warn people about the hypocrisy of life at Grace Episcopal. As the saying goes, the court of public opinion is open 24/7, 365 days a year, and there is irrefutable evidence that Grace is a toxic church where it’s okay for the rector to lie in court, and where this dynamic carries through into the daily life of the church.

And the truth will out, meaning that sooner or later, even the most diehard loyalists will find out that the parish is nothing but a pretty and whimsical illusion. And like the mirage of an oasis in a desert, getting tangled up with Grace Church may be a positive experience, even for a few years. But in the end, the painful reality sets in, which is that the church is anything but a safe refuge from the hot and barren desert.


Monday, January 20, 2020

Perjuring Priest Bob Malm Leaves a Parish Bordering on Bankruptcy

While Bob Malm was careful to ensure that he got every last minute of leave and then some coming to him, he was not do diligent in honoring the responsibilities set out in his letter of agreement and in church canons. Whether it was ignoring church canons that require the vestry to elect its officers, the requirement of a finance manual, or even Bob’s facially self-serving “disclosure” on his way out the door that he did not bother to visit most of the parishioners entrusted to his care, Bob was feckless, to say the least.

One of the results is that, in addition to its toxic internal dynamics, concealed beneath an organizationally narcissistic veneer of friendliness, Grace Church is in perilous financial condition.

Current projections — which could change as the last few pledges trickle in — show the parish with 2020 pledges of $723,506, for net income of $872,000. Even with the reduction in payroll resulting from no longer having to pay Bob Malm’s outrageously generous compensation package, that still leaves Grace with perilously thin income, including:

  1. A likely deficit budget, unless the church tries its usual tricks of irrationally inflating projected revenue or irrationally deflating projected expenses, or reduces staff headcount.
  2. The reality that it claims to be a “center for outreach and healing,” yet dramatically underfunds its commitment to the diocese.
  3. The grim reality of paying $70K a year for HVAC repairs — expenses it has known were coming, and for which it should have saved,
  4. Inadequate HVAC in the nave and undercroft, including excess humidity in the latter.
  5. Elevator 1 long overdue for a major overhaul (knowing the church’s spendthrift propensities, some ding-a-ling likely will push to waste money by replacing the whole thing,)
  6. Failing rake boards, thermopane windows, and a faux slate roof from the 1997 renovations.
  7. A parking lot with paving beyond actuarial end of life.
  8. Energy inefficient lighting throughout the building, including parking lot lights likely to fail within the next few years.
  9. A shortened life expectancy on the condensing boilers due to lack of maintenance.
  10. Failing hot water heaters due to lack of maintenance.
  11. Lack of current ADA features, including compliant internal directional signage and electro-mechanical entrance systems.
  12. Local outreach amounting to just 3 percent of budget.
  13. Ongoing problems with rodents, particularly in classroom and food preparation areas.
  14. An antiquated commercial kitchen.
Moreover, in a classic sign of a dying church, a plummeting number of remaining pledging units is attempting to shore things up by increasing their giving, leaving the church highly vulnerable to even the loss of a few pledging units. As things stand, when adjusted for inflation, Grace Church has lost 1/3 of its income since 2008, even as it paid Bob Malm a $100,000 bonus, no doubt for his exemplary work performance. Meanwhile, more than half its pledging units have fled the church.

And to top it all off, the layers of unresolved conflict in the church now are largely irreparable, with my situation now no longer capable of repair. Having offered the church and diocese multiple opportunities to resolve our differences, that option is now off the table. After all, the very definition of madness is doing the same thing over and over, while expecting a different result. So I am not wasting any time on the hypocrites of The Episcopal Church. 

Here, in visual format, is where things stand, thanks to 30 years of perjuring priest Bob Malm:


Friday, January 17, 2020

Here’s How Grace Church Uses Its Pledge Income

One day in 2013, as I was doing repair work in the undercroft, I noticed that the window sills in the vesting rooms were dirty. Not just a little dirty—disgustingly, filthy dirty. As in not cleaned for several years. Layers of dead flies, dust, and pieces of cut grass that had been blown through the increasingly decrepit windows by the lawn mowers, together with water stains and more.

I took the following photo and sent it to Bob Malm by email, asking who was responsible for cleaning the vesting rooms. (Given that the parish has a paid sexton, one would think he would do it. But then, having caught him sleeping in the building on one occasion, and having been unable to locate him in the building on other occasions when he was supposedly working, that may be an unwarranted assumption.)

Predictably, Bob didn’t bother to respond.

So I asked parish administrator Charlotte Payne Wright who is responsible for cleaning the vesting rooms. Her telling response, “I’m not sure anyone is.”

The upshot is no one knew or cared. And yet Bob Malm subsequently claimed in writing that “no one at Grace is shirking their responsibilities,” despite the fact that it clearly had been at least four and a half years since anyone had bothered to clean the vesting rooms, as evinced by the date of the bulletin from the Great Vigil of Easter.

That begs the question: What does this utter indifference to the care of the physical plant suggest to members? To visitors? What does it say about the role of the building in divine worship? About stewardship of the money and resources entrusted to the church?

And what does Bob Malm’s non-response and claims that he actually was doing his job say about him? About the vestry? Does this sort of conduct warrant a $200,000 annual compensation package and a 2014 annual bonus of $100,000?

Nor is this the only example of ignoring basic standards of cleanliness and maintenance. Indeed, such examples are myriad. And in another instance, when I brought up similar issues, Bob’s response was, “I have neither the time nor the interest.”

Given Bob’s annual month at the beach, his week for the Boston Marathon, and his many trips “out of town,” I have no doubt perjuring priest Bob Malm was telling the truth when he said he didn’t have the time, and he clearly had zero interest.

This sort of feckless leadership and the fact that it was acceptable for so many years at Grace Church surely is worth keeping in mind if you are considering getting involved in the church, or making a pledge to the church.

Caveat emptor!

Filth in the vestry rooms, left untouched for 4.5 years.

Friday, November 8, 2019

It’s Pledge Season at Grace Church — Please Give Generously!

We depend on your generosity to pay those $100,000 clergy bonuses! Doesn’t your rector deserve a month on the beach every year? Please give generously!


Thursday, November 7, 2019

Issues with Diocesan Pledge Underscore Severity of Budget Crisis at Grace Church

Remember when I posted the article about warning signs that a church may be at risk of closure? The article, written by the Rev. Thom Rainer, lists one of the warning signs as resources being focused inward, versus outward.

And so it is with Grace, particularly in the case of the parish’s annual pledge to the diocese. Specifically, for many years, the amount pledged has been less than one-half of the amount proscribed by the Virginia Plan, the diocesan proportional giving plan. That’s right—less than one half.

Under the diocesan guidelines, parish pledges are based on net operating income, otherwise known as normal operating income or (NOI).

So what is NOI? Simply put, it’s all income that is used to pay operating expenses, and it includes items that are funded off-budget, like music programs, the altar guild, and EYC mission trips.

The diocese of Newark provides a good definition:


























In other words, NOI is pretty easy to calculate. If you spend it for day-to-day operations, versus capital improvements, it’s NOI. (It’s also worth noting that the Newark definition includes the church school. Just imagine if Grace School were actually included.)

With that in mind, here’s what the Virginia Plan proscribes for parish giving:































Grace church, however, has consistently pledged at roughly 10% of pledge income. That excludes:

  • Plate and loose giving
  • Reimbursements from the school.
  • Altar guild program operating revenue.
  • Music program operating revenue.
  • Income from the trust used to pay operating expenses.
The result is that when measured as percentage of income Grace Church supports the diocese at a level consistent with a church with revenue of less than $100,000 annual income. When measured by total amount, Grace’s support of the diocese is consistent with that of a parish generating $571,428 in NOI.

For example in 2015, a year in which the church pulled in more than $1,000.000 in revenue, it gave just $85,000, per the annual report.

Income:
























Again, keep in mind that this does not include items that are off-budget, like the music program, the EYC hoagie sale, the altar guild, and other program areas.

That brings us to a recurring issue when examining life at Grace Church: Thanks to years of feckless leadership, the church has been living beyond its means for decades. It can afford to pay its rector $200K a year, offer lavish farewell parties for the head of school, and provide generous purses to Bob Malm and his family. There’s plenty of money for the annual weekend at Shrine Mont, which for many is nothing but a drunken binge. And there are mountains of flowers at Easter and Christmas (yes, although these are restricted solicitations, they are still part of NOI). Nor should we forget Bob’s 2014 bonus of $100,000.

So while Jason Roberson is bloviating about how the parish is “growing and flourishing,” let’s keep in mind that it’s been ignoring its obligation to the diocese for years. That despite the fact that the diocese apparently fully honors its commitment to the national church. 

In other words, most of the church’s funds have been going to meet its own needs and desires, and to subsidize Bob Malm, versus to actually being a church. That is, or should be, a wake-up call to the parish, whoever is foolhardy enough to become interim, and to the diocese. Simply put, it is a matter of survival.

There’s also a catch-22 that confronts the parish: In a church so organizationally narcissistic that it doesn’t see an issue with a priest who commits perjury, or with trying to drag a dying woman into court, do you choose to integrate into the life of the larger diocese? If so, how do you increase your diocesan pledge by roughly $80,000 annually at a time when the parish cannot afford its current cost structure? Yet members are likely to be highly resistant to any arrangement that interferes with the whole living-life-large paradigm under Bob Malm.

In closing, it’s worth noting that I repeatedly cautioned Bob, beginning in 2014, about the looming budget debacle, warning that absent major cutbacks the church was on a trajectory to become insolvent as early as the summer of 2016. In most cases, in true Bob Malm fashion, I didn’t even get the courtesy of a response.

Things are now at a state where the church may need to consider taking on mission status, accepting help from the diocese, and rebuilding from the ground up.

Grace church is in serious trouble.

Tuesday, December 4, 2018

See For Yourself: Grace Parishioners Asked to Pay Half the Cost of HVAC Rebuild, Despite Almost No Benefit to the Church

At a time when Grace Episcopal is barely hanging in there financially, there’s a dark cloud hanging over things. Specifically, members of the church are being asked to pay half the cost of replacing the HVAC systems in Merrow Hall, the wing of the complex that houses the school and the auditorium. Given the limited benefit to the church of the work, this expenditure, which is estimated to cost in total $626,440, is going to prove a difficult pill for members to swallow.

The work, which is confined to the Merrow Hall wing of the complex, comprises the auditorium, myriad classrooms, the tower rooms, and two small rooms on the third floor of the building — one of which has almost entirely been taken over by the school. In addition, while the offices and sacristy are not part of the same system, they should be included in the work, as the HVAC compressor on the roof that services these areas is already past end of life.

The problem comes into sharper perspective when one examines the question of who uses this space; it overwhelmingly is the school. Yes, the church uses several classrooms for an hour a week, and the auditorium for about two hours a week (coffee hour and La Gracia). The school, however, uses all the space, and on average 40 hours per week. Yet, per the terms of the agreement with the school, the church is being asked to pay half the costs. 

Yet if one looks at the use of the nave, the church uses it about five hours a week, while the school uses it one hour a week for its weekly chapel. (School staff refers to the nave as “our chapel,” and church officers as “volunteers in our chapel.” Not surprisingly, school parents often view the church as part of the school, resulting in a certain level of disrespect.) Despite this relatively high percentage of usage, however, the school contributes nothing to the cost of maintenance, utilities, and repairs when it comes to the nave. 

Similarly, the sharing of utilities favors the school. These costs are shared 50/50, despite the fact that the overwhelming majority of utilities are consumed by the school. As a result, and as a result of the school’s effective fundraising efforts, the school is relatively flush with cash, and will be able to pay for its share of the HVAC work from savings. (Amusingly, some vestry members in 2015 were very resistant to eliminating the $9,000 annual grant to the school, under the theory that “we then would be doing nothing for the school. Hardly.)

Nor is the school content to remain within its space. Over the years, it has managed to take over the clergy office attic, space in the undercroft, the music library (which was supposed to be temporary, but certainly has not been) and more. Indeed, at one point the school was trying hard to take over one or more of the vesting rooms, but it fortunately was not successful.

Is the school responsible for the church’s relatively lackadaisical attitude towards fundraising? Of course not. But at the same time, there’s little evidence that the school benefits the church. I mean, it’s not like students later become church members, or their families become long-term members. (In the past, some joined the church in order to get a discount on tuition, but pledges to the church from these “quasi-members” often were startlingly small, and a surprising number flew the coop the instant their kids graduated from the school. This discount is no longer available.) Indeed, if even half of each year’s graduating class became members, that would add up to 60 new families every year. This clearly is not the case.

The contingency funds for the project could also be an issue. Sensibly enough, the planning phase of the project includes $200,000 in contingency funding, which is a good idea when dealing with a 70-year-old building. Yes, the asbestos has all been removed, but a building that age invariably tosses contractors some curve balls, especially given the rather shoddy construction that formed the basis of the 1994 project. So, the church could wind up on the hook for another $100K.

True to form, the church has made no effort to save for this day. Even the fig leaf of the .05 percent of annual revenue, or $5,000, was zeroed out a few years ago in order to continue to pay Bob Malm’s outrageously generous compensation package. Meanwhile, staff is being asked to contribute to the costs of their own health insurance, and outreach is being cut, but Bob continues to live life large, with his annual month at the beach, his trips “out of town,” any time he feels like a week in Massachusetts or Georgia or elsewhere, and his autocratic control over the composition of the executive committee. Yet Bob has no game plan to grow the parish, no vision for the future, and no goals for tomorrow except to keep riding the Grace Church gravy train for as long as he can.

It’s time for parishioners to put the brakes on things and demand accountability from Bob, or make clear to Bob that it’s time to get the hell out of Dodge. The church simply cannot go on with an engaging but indifferent rector whose primary goals in life are to go jogging, hang at the beach, and play golf; and who evinces zero evidence of any genuine Christian conviction. Bob’s conduct over time has damaged the church on every front, and it’s time for change.

For the record, below is the current status of permitting with the City of Alexandria, which makes clear, inter alia, that the church has nothing to do with the project except to pay its share of the bill. Note the cost of the permitting and the fact that the city apparently has rejected the church’s mechanical plans as of today due to the lack of calculations regarding refrigerant quantity. Interesting, when you consider that the project originally was supposed to have been done last summer.











Wednesday, July 25, 2018

Reality Check: Grace Church’s HVAC Project Signals Big Trouble Ahead for the Church

One of the recent discussions amongst the vestry, clergy and staff of St. Dysfunction, aka Grace Church, is about how to fund next year’s HVAC work in Merrow Hall. As a component of that discussion, some have suggested that a capital campaign is not necessary, but that the church should borrow the funds needed for the work, and that it may be possible to pay off a loan of that sort within five years.

Those discussions illustrate three key points:
  1. The management of the church and its temporal affairs has been inept, at best.
  2. The proposed HVAC project is problematic on multiple fronts.
  3. The church’s problems extend far beyond the issues at hand.
Before we go further, some important context. 
  • Today, twenty-four years after the 1994 renovations, major HVAC system components already have outlived their actuarial life expectancy by four years. In other words, the church has been living on borrowed time for years. The failure of the HVAC system in key areas of the building now drives home the fact that this issue cannot be ignored any longer; nor can one ignore the fact that the church has done nothing to prepare for the inevitable.
  • The primary beneficiary of this project will be not the church, but the school. The school uses rooms in Merrow Hall for more than 40 hours a week, while the church directly uses the space for about four hours a week—two for La Gracia, and two for coffee hour, or  about 9% of total usage. Yet half of the projected $1.2 million cost is to be borne by the church.
In the case of the nave, however — the focal point of the parish — total usage is about 9 hours a week. Of that total, roughly 8 hours is attributable to the church, while 1 hour a week represents the school’s weekly usage. (These numbers shift somewhat in the summer, but the for-profit summer camp that has used Merrow Hall over the past few summers largely has kept the ratio relatively constant, while greatly increasing wear and tear on the building.) Thus, the school’s usage represents about 11% of the total, yet there is no cost share. This, despite the fact that school staff refer to the nave as “our chapel.”

Meanwhile, the nave’s air conditioning is inadequate on hot days, or when load is heavy, as happens with large weddings or funerals. Yet there is no plan to address the serious issues with the system, including:
    1. The inadequate airflow available via the existing ductwork.
    2. The lack of humidity control.
    3. The temperature differential surrounding the pipes of the organ, resulting in it being frequently out of tune.
Thus, one wonders why these issues weren’t addressed in 1994, and why there is no plan to address these issues now, despite the proposal to spend more than $1.2 million on an HVAC project that primarily benefits the school.

Looking at the Numbers

Now, let’s look at the numbers.

As currently envisioned, the church’s share of the costs of the project will come to $600,000. Assuming the church can raise $100,000 of that (a doubtful proposition), that would leave $500,000 to be borrowed. Assuming the five-year term presently discussed by the vestry, and the 5 percent interest rate also discussed, the monthly payment would be $9,435.62. Total cost of the loan, excluding origination and processing fees, and the full audit likely to be required by the bank (an estimated $20,000 expense), would be $566,137.01.





Given the church’s tight budget, its ability to come up with an extra $113,000 a year seems improbable. Even assuming that the entire $40,000 annual draw on the trust fund is devoted to repayment, that leaves a gap of $73,000 annually. Thus, predictions that the church could pay the loan off in five years seem optimistic, at best.

There is, of course, also the issue of interest. By virtue of borrowing the money, versus paying cash and carry or having a capital campaign, the church will wind up paying $66,137.01 in interest over the life of the loan—a bad example of interest working against you, versus saving and having interest working on your behalf. Plus, again, there are the indirect costs of acquiring a loan, including the likely $20,000 cost of a full audit (not a bad investment, though, considering the dismal condition of church records in past years), origination fees, title search fees and all the other incidentals that make borrowing money such an unpleasant experience.

Keep in mind, too, that $66K is roughly the annual cost of one full-time assistant rector. Or, put in other terms, it’s a lot of money to be giving to a bank, when it could be used for ministry, helping the needy, and more. 

As I’ve said before: Not saving for the future tells me the church doesn’t think it has a future. And given the average age of parishioners, and the relatively few whose estate plans include the church, it’s just plain foolish not to save.

Can the Church Even Get a Loan?

But would the church qualify for such a loan?

There is reason to be dubious. Consider:
  • The church has lost more than 100 of the 320 pledging units it had only a few years ago. 
  • Average Sunday attendance, or ASA (a key metric of parish health), has dropped by 17% over the past two years.
  • Pledge revenue is down sharply, and it was only year-end gifts of appreciated stock and other major gifts that kept the church from running a deficit last year. 
  • The church devotes no portion of its pledge income to savings, and, as stated previously, is dangerously reliant on a handful of major donors, some giving more than $60K annually. Loss of even one of these pledging units could throw the church’s finances into a tailspin.
  • The church has burned through much of its management and replacement reserves, in some cases drawing on savings to fund luxuries like Chris Byrnes’ farewell party. And, of course, there is the $100,000 bonus paid to Bob Malm in 2014.
There also are signs that parishioners are getting stretched pretty thin. Participation in events like the altar guild tea is sagging, as are flower donations and other non-essential expenditures. Loss of any further membership or giving well could push things to the breaking point.

Of course, to qualify for a loan, the church would need to submit a repayment plan to its proposed lender. Additionally, under Canon 14 of the diocese of Virginia, debt exceeding 20 percent of the prior year’s total receipts must be approved by the diocese. Total receipts cannot include funds from an endowment when such funds are designated for other purposes, which means that repairs paid for by the endowment in 2018 cannot be counted as revenue for purposes of the 2019 project.

Moreover, when one looks at the diocesan debt repayment worksheet available here in PDF, it asks the same sort of tough questions any good banker would ask, including growth or decline in number of pledges, as well as pro forma budgets for the next five years. The latter is problematic, if for no other reason than Bob Malm must, under church canons, retire by the time he turns 72. That will almost certainly erode revenue, as this happens at all churches when there is a change of rectors. And in Bob’s case, having lingered on for 27 congenial but ineffective years already, the effect of his retirement likely will be substantial.

There’s also the challenge that none of this occurs in a vacuum. As noted in a previous post, the faux slate roof needs to be replaced, numerous double-paneled windows need to be replaced, there is extensive deterioration of the rake boards, window trim and other exterior wood, the stained glass is due for restoration, the parking lot is due to be resurfaced, and much of the interior finish of the 1994 renovations is at the end of useful life or beyond. Thus, overall costs will continue to climb in the coming 5-10 year period. Meanwhile, given the average age of the parish population, one should expect the number of pledging units to decline during that time. Plus, there are a number of expenditures in the offing that likely will upset parishioners greatly...more on those issues in future posts.

Then there is the issue of the church, its power dynamics, and its suitability for mission. Specifically, I am not the only person to leave St. Dysfunction having concluded that the place is toxic. Whether it’s bullying, Bob Malm’s little power games, urging people to commit suicide, or disclosing confidential giving information, there is irrefutable evidence that this is one messed-up church. That does not bode well for the long-term health of the church, financial or otherwise.





Summing Up

No matter how one parses things, St. Dysfunction is in a bad way. It’s been doling out 100K bonuses, paying for lavish parties from savings, and otherwise living high on the hog, all the while not saving for the future. Even worse, it’s lost sight of its real purpose, which should be a place of healing, welcome and reconciliation for all persons. Instead, it’s become a religious-themed fraternity/sorority, in which people think it’s okay to bully others, to gossip, to shun people, and to engage in behavior few would contend is Christian or even ethical. (The gossip about an allegedly gay married man in the parish is particularly ugly. If nothing else, it’s none of your business, folks, and if I were his wife and found out about your stupid chatter, I’d be more than a little ticked off.) People aren’t stupid, and they instinctively know when a church has become toxic (look for further documentation on those issues this fall). And few want to give generously to a church that thinks shunning, bullying, and other adolescent antics are acceptable. That would be doubly the case as people increasingly realize that Bob Malm and the vestry have not been accurate, for example, in their recounting of recent events, including the false claim that I resigned from the church in 2015.

So, paying for the HVAC work is going to be a major problem for the parish, but it’s only the tip of the iceberg when it comes to the problems facing St. Dysfunction, aka Grace Church.