Connie McNeill, coordinator of administration for the Cooperative Baptist Fellowship, explains how her organization has responded to the financial crisis.
What’s the best way to navigate the uncharted waters of the current financial crisis? Cutting expenses and maximizing revenue both have been parts of the strategy for the Cooperative Baptist Fellowship, said Connie McNeill, coordinator of administration for the denomination. McNeill’s duties involve supervision of administrative operations, including finance, human resources and information. She also functions as chief of staff.
McNeill spoke with Faith & Leadership at an event for judicatory leaders at Duke University in March 2009. She explained how her organization, which comprises approximately 1,900 affiliated churches and has a budget of $16 million, developed and executed a strategy for managing in the crisis while keeping true to its mission.
The full text is below; click on the video to hear McNeill talk about how crisis affects leadership.
Q: In general, how has CBF responded to this financial crisis?
The challenges have been the same as those faced by both for-profit and not-for-profit organizations. Historically, folks in churches have tended to give through whatever kinds of recessions or depressions we’ve all experienced. This feels a little different; it looks a little different.
So last fall we anticipated a drop in receipts. It was anybody’s best guess how much that would be -- we chose 20 percent. We put in place what we call a financial contingency plan, not just to control our spending and reduce that by 20 percent, but also to look at all the pieces, including potential funding revenues. Not just the gifts that we would anticipate from churches and individuals, but also other parts of our total portfolio that we might draw from now.
For example, we had some large gifts that we’d received for which we had a spending plan. One, in particular, we were spending over about seven years. We sped that up, and we’ll spend that over about four years now. So we saw that as a potential source of revenue that we wouldn’t have looked at if we were in more normal times.
We are trying to manage within our means and not to diminish what we’re doing in missions and ministry literally around the world.
Q: You said that you guessed at 20 percent. How are the numbers looking?
I’m pleased to say at this point in our fiscal year, our receipts are a total of 17 percent down. So we are 3 percent ahead of where we had guessed for this point in time.
Our gifts are behind where they were last year, but we are trending upward in our gifts from where we began the fiscal year. Will we close the gap? We don’t know yet. We are watching and managing that.
Q: Often we hear that people will honor the commitments they’ve already made, but will not make them again. Are you seeing any pattern like that?
We have no way of knowing that in our organization. We know what our highest revenue months are: Those tend to be January, February, March -- even into early April -- because churches traditionally see their higher giving months as October, November, December. We lag behind the churches because it comes first to the church and then to us. But I have no way of knowing about future commitments.
Q: How has managing this crisis affected your ministry?
We have tried to absorb a great deal of the reductions we’ve made in I guess what I could describe as a personal way -- on staff and new ministries that we might have launched rather than current ministries and missions.
We are trying to fulfill all of our commitments we’ve made to partner entities, though we also have reduced what we can provide to them.
I think that for the short term, we’ll not have an overwhelmingly negative impact to our ministries and missions. In the short term, we’ve designed our plan for 19 months: to finish this fiscal year and run into next fiscal year if need be.
Beyond that, certainly we’ll have to have conversations about what we would eliminate for the longer term. Hopefully we won’t be at that place nationally, globally.
Q: What has been the most difficult decision that you have had to make?
When you make a decision that impacts people’s lives, particularly people you know -- in this case, for us, staff and partners -- that has been the most difficult.
With our staff, of course we know who’s just bought a new home or just had a new baby or is expecting to. We know the personal lives of the people who are employed by us.
We know about the ministries around the globe and how our field personnel will sacrifice personally to meet the needs of their ministries, the people to whom they are serving.
And with our partners -- our partners are our friends. When we have had to reduce our funding to them -- they have all been extremely gracious and have all understood -- that is simply adding to the challenges that they face in their own worlds of ministry.
Knowing that you’re impacting people’s personal lives is difficult.
Q: You’ve mentioned staff several times. What strategies have you taken with your staff?
We have not eliminated any positions, for which we’re all grateful. That would have to be a next level that we would look at as an option.
Initially what we have done is very small salary reductions -- a one percent salary reduction, which is what we had added to the current salaries to begin the current fiscal year. It rolled us back to the previous fiscal year. We have reduced our retirement benefits. We had increased the portion of our employee medical benefits that we were responsible for and asking less of the employees at the beginning of the year. And so it’s been a tradeoff. We are contributing more to the medical insurance but are taking some from the retirement.
Then there are small things -- employees’ CBF-provided cell phones, for example. We’ve always had personal use as well as business use of those cell phones. So now we collect $30 each month for personal use and continue not to monitor personal use.
So we’ve done a lot of little things. We’ve eliminated the use of paper cups for coffee. We’ve asked everyone to pick up their ceramic mug or glass mug and bring it to the break room.
Just trying to save costs any way that we can, every way that we can. We think that nickels and pennies and dimes add up.
Q: How did you come to use the strategy that you did? What was the rationale?
We started with the philosophical conversation about how we would try to manage what we thought we were about to experience, and indeed we are experiencing. We agreed to some philosophical tenets about how we would manage that, and then began to put layers to our plan.
We looked at ways we would reduce costs across the organization, looked at ways we could find other sources of funding than our gift revenue. We looked at some specific reductions we would make, and then looked at a fundraising strategy that would address the gap, the shortfall of revenue.
So it’s a holistic, more comprehensive plan which I think is better, healthier for the organization than more single-shot kinds of actions. It all needs to fit more congruently, and leaves prints on the organization for the future in terms of managing.
Q: What were the philosophical tenets that were the basis of your decisions?
The underlying philosophical tenets included such things as the valuing of our employees. We don’t produce a lot of products but we do provide a lot of services. And so our people are, in effect, our major “product component.” And so if we begin losing people who can provide the services to our congregations and individuals in our various ministries in the world, then we have diminished our ability to fulfill our mission. So that -- valuing our field personnel and staff -- is a major philosophical tenet for us.
Other philosophical tenets included sharing the pain across the organization. So we were looking at organization-wide reductions.
We also feel that, although we need to operate within our means, we’re in extraordinary times. We have developed a reserve fund for extraordinary times. So it was time to tap that -- in measured ways -- and determine how much we were willing to spend down of our reserve. And then we redid the ways we had laddered out some gifts.
Q: You talked about making decisions that will serve you over the long term. Do you think the current challenges will lead to fundamental changes in your organization or are you seeing this as a temporary tactic?
I guess another philosophical tenet is that we didn’t want a purely tactical approach to addressing the financial challenge. We wanted to be more strategic in addressing it. We didn’t want to have any unintended results that were even more undesirable than not having faced the challenge in a positive way.
So, looking longer term, if you find ways for effective cost saving, I don’t think you ever go back on that. Some of the things we might redo. If gifts continue to trend upward as they have been, fortunately, for us, then we might yet go back and revisit those large gifts and put them back over a seven-year spread instead of a four- or five-year spread.
So some things we’ll leave in place, some things we could revisit.
Q: Will the financial crisis make better leaders?
I think probably the thing that I’ve seen change most in any kind of significant challenge, or crisis even, is how the people who lead are changed. I don’t think you ever go back and undo that. The ability to lead is enhanced and enriched for the rest of the time you serve in leadership because of that crisis or challenge that you’ve led through.
I guess the most significant thing that will change will be the people in leadership and how much better I would trust that we’ll be in the future than we’ve been in the past.
I think you discover within yourself those things that you knew not of, prior to it. Things like courage, steadiness and wisdom that you either discover or receive in maneuvering the waters of the challenge or the crisis. A strength that you become aware of that you may not have known before. And all of those things enhance your ability to lead going forward.