I am anxious for the headquarters property to sell so that more money can be used for local problems such as paying for more ministers. When do you think the property will sell?
The property will sell when a qualified interested party makes an offer to purchase at a price and with terms acceptable to us, when all conditions and contingencies in the offer have been met, and when the escrow has closed and the title has passed from us to the buyer.
This entire process is complex, and no one can predict when such an offer will be received, or after it is received, exactly when the escrow will close.
The range of time for at least the receipt of such an offer could be as close as a few weeks to a few months, and as far away as numerous months to a few years.
The length of escrow could be from a few months to many months as well, depending upon such things as the buyer's intended use of the property and the city's planning process.
The sale process is being guided by the best real property professionals available. These brokers fully understand the desire of the church to proceed at the greatest speed consistent with a prudent market plan, and are acting accordingly.
Please realize that the sale of the property is not, as some may suppose, the solution to every financial challenge facing the church.
It is true that we spend more on the headquarters facility than we wish, and that selling it will decrease our facilities expense and negate the need to pay discretionary assistance to retired employees from our cash flow.
However, the total savings per year by selling the property cannot save more than the total spent on the property (about $4 million) plus the net amount of current discretionary assistance minus future pension plan payments (about $2 million) for a combined total of about $6 million.
While an extra $6 million would certainly be welcome, our income in 1997 in the United States is projected to be more than $100 million less than the church's highest income year.
One hundred million dollars is a lot of money. The $6 million per year savings that would be realized if the property was sold today (and no money at all was spent on the rent for even a small headquarters facility) can in no way begin to offset the impact of the loss of more than $100 million in income, and cannot therefore begin to finance an operation of our previous size.
Also, the size and expense of the facility is only one of two main inefficient overheads. The other inefficient overhead has to do with the size and number of local churches.
Using rough numbers, we have about 40,000 people attending just over 400 U.S. churches. This means that the average size of each church is about 100 members, and if each church had a full-time pastor it would take 400 pastors to staff them all.
The reason for the small size and large number of our churches has to do with their origin. Most churches of other denominations were formed as neighborhood churches by a pastor who built the church from zero members to its current size in a small geographical area with the church at the center.
Our churches were built as people responded from every nook and cranny of the country to our print and electronic media programs. We found a cluster of interested people and then sent a pastor to serve them.
Sometimes the center of the cluster was hundreds of miles from some members who attended, and there were often small clusters far from other clusters.
Also, since the church has lost members because of doctrinal changes, the clusters have gotten smaller, in many cases.
The result of this process is a high number of small churches scattered over a large area, requiring many ministers to serve them and many buildings to meet in. No matter whether the church owns a large headquarters facility or not, and no matter whether every penny of local income is used locally, many small churches could not fully pay the expenses of a full-time pastor.
Church Administration has wisely seen the need for lay pastors in some areas.
The lay pastor program, while perhaps not as ideal as a fully paid pastor for every church, is nonetheless the only way to serve the needs of many small churches, and would be the way any small church of any denomination would have to function.
This is true regardless of their denomination, their approach to financing and their organizational structure. The only exception would be those who have the large churches pay enough to a central authority to subsidize the smaller ones (which is what we have done and continue to do in part).
In summary, we are moving as fast as is practical to sell the facility so that the monies can be used for more local needs. Selling the properties certainly has numerous benefits, as I have outlined here in part and other times in more detail.
However, some of our financial challenges are because of our history as a media-based church with numerous small and scattered congregations. Under almost any financial scheme, and with or without a headquarters facility, some of the needs of the smaller churches must be met by volunteerism or by subsidy from larger congregations. This is one reason we are implementing the lay pastor system.
February 18, 1997, WN, page 11
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