Thursday, July 12, 2012

Martian budgets past, present and future: Driscoll shares stats on Mars Hill's finances

Estimated 42% of adults attending MH gave

                              the weekly loss % adults who gave
Rainier Valley -$3.39 27%
Portland                   -$3.74 42%
Federal Way -$4.71 42%
Ballard -$4.81 41%
Everett                   -$5.73 45%
Bellevue         -$6.14 54%
Albequerque -$7.16 38%
Downtown -$8.29 24%
Olympia -$8.35 59%
Orange County -$8.65 32%
Sammamish -$9.75 64%
West Seattle -$11.55 66%
U District      -$11.82 29%
Shoreline    -$18.02 67%

"For the next year our intent is not to start any new Mars Hill churches"
07:42 in the Youtube clip

Is it just me or does it seem like there's a weird trend of higher deficits at many campuses where there are higher percentages of giving adults.  There are cases like the U district or Downtown, which Driscoll mentions having a lot of working class singles.  There's Orange County, which recently got served an eviction notice. But it almost looks as though there's a cluster in which the places running the highest deficits often have the highest percentage of adult participation in giving.

Let's take Shoreline. How is it that the campus with the highest percentage of adults who give has also run the highest deficit? This could be explained by percentages of  one or both of two basic possibilities.  The first is that the operational costs for Shoreline are extremely high or that, despite the high percentage of giving adults at that campus, there aren't the kinds of major donors on which a site might need to operate.

If the first then Shoreline has had sky-high expenses but I'm not privy to the inner workings of that stuff and I don't plan to write a bunch about that campus right now.  This is during what I would consider a hiatus in the real estate series.  Now the second, the possibility that Shoreline either lacks or lost major donors who could keep the campus more financially solvent, that may or may not be a practical explanation.  Some of the people who ended up at Shoreline saw another campus get shut down with a citation of a lack of numbers.  I would not blame those people, whoever they are, for getting colder and colder feet.  I know a few people who bailed after the Lake City campus was shut down and haven't given a cent to Mars Hill since.

But then there's West Seattle, which also has a high percentage of giving adults and yet runs one of the higher deficits. The expenses of property at Shoreline and West Seattle may both be significant.

The newer campuses are Rainier Valley, Everett, Portland and Federal Way, if memory serves.  These weren't in earlier annual reports.  These may be sites that don't own their own property and haven't been around that long.  We can't say for sure they have the lowest deficits because those are the most faithful givers.  Driscoll can point out that Rainier Valley has a lot of single moms but the campus is second to last in the percentage of adults who give. The low deficit may simply be because Mars Hill rents rather than owns.

Ballard has gotten to a point where it's running a lower than usual deficit.  But it's not clear that Ballard giving participation has really grown that much in terms of percentage. Shoreline and West Seattle were the two first entries in the multi-site multi-campus franchise and they're running the highest deficits despite high participation.  It would be interesting to work out how such huge deficits could be run in sites that have what would seem to be the most loyal donor bases.

Let me turn to another set of figures, though.  Campuses are just part of a story. Another part of the story is the expenses across the organization.

Budget Update
                            past          present future
Weekly giving
per adult                 $30.25  $30.25     $35.00
Church costs         -$14.20 -$11.82 -$10.00
facilities costs        -$12.37 -$8.81 -$10.00
central costs         -$22.69 -$16.07 -$10.00
expansion              -$3.60 -$0.99 -$3.50

Margin/Loss         -$22.61 -$7.44 $1.50

Look at that $35.00.  The basic principle doesn't seem to have changed, not unless there's absolute certainty that that $35 will come.  See, if this were a new plan on a new model beyond a weekly vs. an annual budget then the additional and not incidental variable of projected growth would be more modest.  Compared to what I can only guess was operating in Martian budgeting before that's probably a comparatively really modest projected revenue.

But what if $35 doesn't arrive?  What if the $30.25 which has been, and is now, turns out to be "and ever shall be, world without end" what happens?  Deficit, again.  

Want to know how that could be avoided?  There are some possibilities, only one of which might be practical. One possibility is to cut the costs on the central side.  Anyone can see that comprises the lion's share of expenses in the old and current situation. In the old paradigm if you added together church costs and facilities costs that only got you slightly over central costs. Church costs were the costs of local staff and programming. Facilities costs speaks for itself, facilities.

Central.  As Driscoll explains it this includes the website, human resources, legal, Driscoll himself, the media team, and all that stuff. So, I guess, that's where this fascinating article might be relevant.

From the May 2011 Church Production Magazine feature on Mars Hill multisite

If you've seen how much Red cameras cost it starts to become clearer how you had to add church costs and facilities costs to still only get slightly over central costs.

Legal has a lot to do:

From Christianity Today October 2011

If I may make some observations it would seem as though in the wake of the Andrew situation and Mars Hill this year I don't quite know what the public relations team of Mars Hill has accomplished other than making Mars Hill look like ... Mars Hill.  Last year the legal team got Mars Hill some trouble on a trademark situation.  This year an eviction notice was served and Driscoll posted a video mentioning that Mars Hill was retaining legal counsel.

It doesn't sound like the legal counsel that was retained adviced putting up much of a fight or was convinced (as yet) of a religious discrimination case. Central includes media.  What's in media and other stuff besides red cameras?

Would renting the city of Ephesus for a day count? Was that from Central expenses? Renting the city of Ephesus for a day and making a bunch of epic videos and the like, how much did that cost?  Preach the scriptures, actually preach the scriptures and not topical sermons that pose as expository sermons.  Gut the media presence in terms of having to have "epic" films for sermons or preaching live from some location.  Slashing expenses at central seems to be the plan and if they stick with that plan that will help.  Giving up any idea of expansion until they can go a few years and show they can adapt to the giving they have, not the giving they hope for, will also be a good change. It's tough to believe a guy who tweets about a pastor being someone who can't do impossible things expected of him with resources he doesn't have if he's mentioned, merely in passing at that, that his church even rented the city of Ephesus for a day.

If it's not all about numbers and growth we have a great opportunity to see if Mars Hill is serious about this claim.  For the financial health of the organization it would seem like giving up on growth and expansion has been overdue for a few years to go by the deficits being run at each and every campus.  It's sad to see the oldest campuses with the highest levels of donor loyalty having the worst deficits.  I don't know for sure if those campuses have at any point hemmorhaged loyal members but I know a few former MH members and some of us did grow weary of elders saying "give more" or "give til it hurts" or "do you love Jesus?  Support your church."  It's tough to know for sure if a guy is really against consumerism if he talks about having two home theaters and three Tivos from the pulpit.  What was that about consumerism again?  I don't know if that anticipated $35 is going to happen.  I'm not sure that budgeting for that will pan out.

Who did the vision casting for that unsustainable economic model?   Who was the architect and visionary of that?  Whose leadership led to systemic deficits where Mars Hill was like a family charging everything to a credit card and hoping for the big year end bonus to make sure they broke even?

Cutting from the expenses of central, though, could be a very sure thing and it's wise of MH to move in that direction.  Scaling back on any expansion ideas is a sure thing.  If you want to avoid spending money you don't have then budget "expansion" based on the revenue you're actually getting.  If that "tells" you that you're not in a position to expand to new sites for one year or five years you listen to the money because the money fairy is the congregation.  Mars Hill people can't vote on anything and don't get to appoint any leaders.  They can contribute with their time and their money.  If they're not giving you can guilt them for a while but with the kinds of deficits Driscoll has shared expecting them to be more faithful in giving is not going to help if the leaders don't continually seek to be faithful in spending.

POSTSCRIPT:  yeah, I know this is supposed to be a hiatus from the real estate series but I'm tagging this as part of the real estate series anyway.


Rebecca K. said...

pretty sure its Olympia that's the 4th new campus. our family used to attend federal way, and i THINK its about 4-5 years old. As for your idea on why costs are low, i think you are correct, at least on account of Federal way, which meets in a local middle school gym.

Accountability is primarily the reason we left, but man, the more i hear, the more i feel like we've been HAD. We'd never even considered the financial accountability aspect. it is astonishing to me that our friends just don't GET IT.

Wenatchee the Hatchet said...

ah, thanks for the clarification about Olympia.