Category Archives: Faith in the Marketplace

Christians and Bribery

  • David B. Doty, Eden’s Bridge, Inc., February, 2017

Author’s note: This essay was prepared for inclusion in a Marathi language handbook (see photo at bottom) distributed to participants in Marketplace Ministry / Business as Mission seminars I presented in Aurangabad, Jalna, and Ahmednagar (Maharashtra State), India earlier this month. The essay was prompted by the fact that this question was prevalent in previous sessions and subsequent communications with indigenous business and pastoral leaders.

Though Christians are not “of this world,” we must live in it for now. Bribery is a difficult issue we must face in many parts of the world.

There are typically two approaches to bribery among Christian teachers, missionaries, and pastors in places where bribery is a common practice. The first approach considers bribery as an absolute wrong and never to be done. In part, this is sound thinking as Christians should 1) never demand or accept a bribe, and 2) should never offer a bribe for the purposes of serving injustice. If someone will be harmed by paying a bribe (either materially or physically) while we receive undue benefit, such as a judge wrongly ruling in our favor or a business person seeking advantage over a competitor, both parties in the transaction are clearly guilty of doing wrong.

The second view accepts bribery as a cultural norm and the way things get done. In this view, paying the bribe does not place guilt on the one paying the bribe as it serves extending justice. For example, if a Christian was trying to carry aid to an underground church in a country where such aid would be prohibited by the government, the bribe may be the only realistic means of getting that aid delivered. Another example would be the case of smuggling persecuted people out of a country where their departure would otherwise be prohibited. In these cases, the officials are being paid to “look the other way.” In such cases, disobeying human rule to obey God is a legitimate argument from Scripture for paying the bribe.

The first approach, to consider an absolute ban on paying bribes, would likely have been the practice of the Pharisees. They likely would have allowed neglect or abuse to continue rather than violate the Law. However, the Apostle Paul points out that this is to put the letter of the Law above the Spirit of the Law: But now we have been released from the Law, having died to that by which we were bound, so that we serve in newness of the Spirit and not in oldness of the letter. – Romans 7:6.

Jesus admonished the Pharisees because they failed to perceive higher and lower principles within the whole Law: “Woe to you, scribes and Pharisees, hypocrites! For you tithe mint and dill and cummin, and have neglected the weightier provisions of the law: justice and mercy and faithfulness; but these are the things you should have done without neglecting the others.” – Matthew 23:23.

In paying bribes as a means to extend justice, the Cross comes into clear view where Jesus willingly paid an evil price for the sake of achieving a higher principled goal, the salvation of humankind.

The difficulty becomes, if we see paying a particular bribe as a lesser evil to gain a higher purpose, discerning such times appropriately. Praise God we can seek the counsel of the Holy Sprit in prayer, the Bible, and the advice of those in authority over us in the Church.

What does the Bible say about bribery and what we might infer by extrapolating the texts?

Here are some samples which address the main issues of bribery. Exodus 23:8 clearly and simply states “you shall not take a bribe.” Deuteronomy 10:17 says that God does not take bribes. Deuteronomy 16:19 and 27:25 focus on the power of a bribe to pervert justice. 2 Chronicles 19:7 also places the focus on taking a bribe. Psalm 15:5 is concerned with protecting justice, and Proverbs 17:8 draws a parallel between bribery and witchcraft.

Ecclesiastes 7:7 says that bribes corrupt the heart, in other words, driving participants more deeply into sin. Isaiah 1:23 equates taking bribes to thievery and in 5:23, again, we see the concern for protecting justice (rights). Isaiah 33:15 draws a comparison between unjust gain and taking bribes. In Micah 3:11, judges, princes, and prophets – all social and political leaders in the theocracy of ancient Israel – are all condemned for perverting justice in return for receiving money. Proverbs 29:4 tells us that taking bribes undermines the social, economic, and political stability of nations.

In these passages the clear concern in condemning bribery is that of corrupting justice. When two parties conspire, one demanding and one paying a bribe, to pervert justice (harming the innocent, oppressing the poor, or giving undue favor to the one paying the bribe) someone outside that transaction is being harmed. While Scripture always condemns accepting a bribe for any reason, it is also always wrong to pay a bribe that serves injustice.

But that is not as clear cut as it may appear because the one paying a bribe is harmed financially. This is where we must return to the issue of serving a higher purpose. There are times that not paying a bribe will allow a greater evil to continue or evil grow worse.

Let us consider war as an analogy. The Bible tells us not to “return evil for evil” – 1 Peter 3:9. Many will argue that we should not wage war. But a ruthless enemy can bring economic and social ruin, enslavement and lawlessness. These things hurt the most vulnerable the most. To allow such an enemy to take control is a great evil. But resistance to such an enemy may protect and preserve many, many lives and livelihoods. God grants civil governments the power to wage war on our behalf as a defense against growing evil. The evil of taking lives in resistance to evil power may well be the lesser of evils.

Bribes occur when one party possesses power (authority) that is unavailable to the other party. Either the first party demands a bribe or the second party offers a bribe to motivate the first to act on their authority. The one with power can withhold justice or threaten to perform an injustice or the one offering a bribe may do so with the intent of perverting justice. In both cases, bribery is grossly sinful. However, a bribe may be paid to ensure or restore justice. Here then the burden of sin falls on the person in the power position. This may well be taken an instance in which Peter commends us to submit even to unrighteous authority (unjust masters, 1 Peter 2:18).

Some examples of where the one paying a bribe might not sin would be in making payment to government officials or to utility workers to ensure the timely completion of their duties and tasks. The Bible does not condemn those who paid tribute to conquering kings (a form of bribe to appease aggressors).

It goes without saying that bribes should never have to happen. But there are times, especially as concerns the spread of the Gospel and our service to those in suffering, when we may rest assured that where sin abounds, grace abounds all the more (Romans 5:20). And we can pray that as the Gospel spreads around the world that laws and social morals against bribery will strengthen.

In the end, we must be very careful about paying bribes but there may be times, with proper discernment, that to pay a bribe may be the godly thing to do.

Seminar handbook

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Marketplace Witness: Tell Your Story (to me)

All economic transactions involve human relationships, either overt, such as buying fruit at a street stand from the operator, or obscure, as in the electronic shifts in global capital markets. Somewhere there are human actors on both ends of the transaction and often many involved along the way. Our behavior in those transactions always reveals character to some degree, whether we are a bullying negotiator out of stinginess and greed or offer the customer free add-ons as an act of gratitude for their patronage.

By similar degrees, our Christian witness in the marketplace is valid in how our behavior demonstrates the grace and truth of our redemption, delivered from the foibles and fear of the sinful, broken human condition. As Christians we should find ourselves able and willing to be more forgiving and generous than we expect from the worldly. How this plays out, like the degrees of separation along the spectrum of the transactions themselves, along a spectrum from overt witness, invoking the name of Christ within the conversations surrounding the exchange, to the obscurity of simply being fair, gentle, kind, and generous, letting our actions speak in letting the relationship unfold, always has impact.

In the past two decades, there has been a groundswell of awareness and documentation of marketplace impacts by Christian practitioners. A few years back, Mark L. Russell even put together a great book, entitled Our Souls at Work: How Great Leaders Live Their Faith in the Global Marketplace (Russell Media, 2010), to help capture how the influence of Christ leads these leaders as Kingdom witnesses in their professional lives.

The only downside to Russell’s book is that it is a teaser in that many Christians who read it may think “That’s great for them, they are already wealthy or in other positions of great influence, able to do great things for God. . . . but, who am I?”

I will here resort to endorsing perhaps the most powerful yet underutilized evangelistic weapon: our testimonies. We are too often told that we must witness (overtly) telling everyone about Jesus. And I agree that should never be far from our lips. But testimony is the recounting by a witness of what they have seen happen. In Joshua 4, Joshua commanded the leaders of the twelve tribes of Israel to each take up a stone to build a monument in that place to commemorate the event of the Jordan River parting, “so that when your children ask later, saying, ‘What do these stones mean to you?’ then you shall say to them, ‘Because the waters of the Jordan were cut off before the ark of the covenant of the LORD; when it crossed the Jordan, the waters of the Jordan were cut off’” (Joshua 4:6-7).

These stones were not the miracle itself but merely markers to remind the Israelites of God’s historic act. Our testimony is first and foremost focused on the redemptive acts of Jesus Christ. But God adds our life events, that also serve witnesses, such that we are not simply proclaiming the Cross and Resurrection. We are also proclaiming our transformation into becoming the Sons (both female and male) of God as acts of revelatory grace amidst God’s mission in the world (Romans 8:19).

It is by the very presence and power of the Holy Spirit that we are changed, from glory to glory, and through the recollection of the transformative events of our lives, founded in Christ, that we shall, and already are, overcoming the world (Revelation 12:10-11), ushering the Kingdom of God into the world by our acts of righteousness, even in the marketplace. The character transformation of God’s children influences our behavior and fundamentally changes not only how we view the roles of work, stewardship, and exchange in God’s Kingdom, but how we take on the tasks and attitudes of our work, as part of “taking up our cross daily” (Luke 9:23)

So now to the task at hand: “Be diligent to present yourself approved to God as a workman who does not need to be ashamed, handling accurately the word of truth” (2 Timothy 15). I would like to collect, compile, and share the stories of how your faith influences your work. Examples may range from the overt, such as Zion Café in Thailand, sending forth street ministry, to Kufi Coffee in Kentucky, which gives back by their Cows for Communities program, to more obscure practices by those who simply have taken new approaches to how they conduct business and treat all those in relationship to their business, including employees, vendors, customers, and their communities.

As I mentioned before, it is easy to get hold of the stories of those in prominent places as their visibility gives them a platform. But just as there are few who attain to such heights of public acclaim, their stories are few. On the other hand, the stories of everyday Christians, diligently seeking the Lord in all they do, are innumerable. The stories of the prominent may come as refreshing rains in the midst of a drought but the testimonies of the multitude are like a great, watering river through the desert.

Would you please contact me so that we can share your story of faith and vocation? I want to demonstrate to the Church and the world that we can each make a difference, even if in small ways, and all to the glory of God. As our testimonies “leak out” into the world, when the world sees the generosity, the very grace, of God lived out, that kindness will help draw them to repentance. Your story is far and away your most powerful and impacting witness. Please share them with us all. Anonymity can be completely protected as needed or desired, so please contact me…your story is important to encourage the Church and to share the love of God with the world.

NOTE: Please pass this post / link along to any and all BAM practitioners. There has been repeatedly spoken a desire to compile a collection of BAM project and initiative stories such that others may learn from, and not have to re-plow, the fields that have already been worked. Thank you.

Feel free to contact me directly at davedoty@edensbridge.org.

Shalom,

Dave Doty

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Education, Opportunity, and Christian Ministry

As some of you know, I serve on the U.S.-based executive board of Life Light Ministries (http://lifelightinc.com/) in Aurangabad, Maharashtra, India. My role is as Director of Organizational and Staff Development. In that role, I work very closely as a coach / mentor / advisor with John Dongerdive, Life Light’s Executive Director, and his brother James Dongerdive, who serves as the Director of their St. John’s School.

While Life Light does many things in their community, including operating an orphanage, conducting street ministry to lepers, staging an annual regional pastors conference, and so on, St. John’s School offers some unique opportunities. The school is sought after by many local parents. Public education in many parts of India is of very poor quality. St. John’s offers the equivalent of elementary through high school classes at minimal costs, affording high quality educational opportunities for poorer families.

St. John’s School represents three highly desirable opportunities for Life Light. First, many of the students are of either Hindu or Muslim faith households. Yet in St. John’s classrooms the name of Jesus Christ is openly proclaimed. St. John’s has been able to establish rapport with the students’ families through numerous events celebrating different stages of the students’ educational career. Second, St. John’s operates at a profit, currently teaching about 1,000 students, which helps support Life Light’s other ministry efforts. In fact, right now, the school is adding two more classrooms which will maximize the use of their current location by allowing them to add another 70-80 students for the coming school year.

The third opportunity points to a very exciting future. St. John’s is poised, with solid experience and a good reputation in their city, to expand their operations. And demand for educational opportunities in India is exploding as a growing middle class is looking to ensure their children have greater vocational opportunities for their future. St. John’s can grow into more specialized fields in adult education and vocational training programs over the next few years and become an even greater influence in Aurangabad.

I am working with John and James to help carry forward the vision their parents held when they started Life Light more than twenty years ago as an indigenous Christian mission whose purpose is to empower communities to lead a national evangelistic movement in India. The opportunities immediately in front of them are what are compelling me to get my “feet on the ground” in Aurangabad later this year. Life Light not only has the opportunity to be a leading institution of private education but they are working to organize more than 200 pastors in Maharashtra State as a unified evangelical front for the cause of Christ.

I hope this article encourages and excites you. India is still less than 2.5% Christian. But with ministries like Life Light in place, we can be assured the Word of God will go forth and not return void (Isaiah 55:11).

All that said, I am still in the process of raising funding for my tour, to include visiting Life Light and Hujji Ministries International is Sialkot, Pakistan, where I will also be teaching and preaching on the role of marketplace ministries in God’s mission in the world. Would you prayerfully consider a supporting donation to help defray the expenses of this trip?  Those can be made via PayPal using my email addresss – davedoty@edensbridge.org, or mailed to me, c/o Eden’s Bridge, Inc., 991 Lancelot Drive, Norcross, GA 30071. Eden’s Bridge is a registered 501(c)(3) not-for-profit and your gifts are 100% tax deductible.

Shalom – Dave Doty

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BAM Think Tank Report #11: Business as Mission In and From China

BAM Think Tank China Regional Group Report

Download Report Here

Executive Summary (© BAM Think Tank 2013)

China’s economic growth of eight to ten percent annually for the last twenty years, creates an ideal commercial environment for business as mission (BAM) within China. There are many opportunities for doing business and large amounts of foreign investment available.

At the same time, as one BAM practitioner in China has noted, “China has one of the largest unreached populations in the world, business is a significant channel for Christians to effectively impact countless people and help set them free from sin.” Business brings relationships and connections that are a natural context for showing love and sharing the message of the gospel. Business people have many opportunities to share the gospel and establish close relationships and friendships with people from different walks of life including owners of large businesses and government officials. These opportunities are available to them because of their business involvement.

The business as mission companies profiled in this report tell the stories of many decisions for Christ, the discipleship of new believers, Bible study groups formed, church leaders trained and local churches added to or planted. These businesses in China have also had an influence through job creation, improved working conditions and benefits, improved standards of living, training up the workforce, imparting biblical values for work and family and challenging corruption, among other things.

At the same time, as the Church in China grows exponentially, the desire to do mission from China is also growing. As a Chinese contributor observes, “First, we must be involved in the Great Commission; second, we must grow into maturity through giving; third, the Chinese Christians will bring a new dynamic into world missions, both to the international Christian community and the unreached people groups.”

With a conservative estimate of 70 million Christians in China, the potential impact of their mission involvement can be far-reaching as they grow stronger and become better equipped. However, the Chinese mission movement is still growing into maturity and experience of business as mission is very new. The Chinese church both inside mainland China and overseas has a long way to go to fully understand and embrace the strategy of business as mission. They must learn from their own difficult experiences and also connect with the wider BAM movement in order to be more effective for the future.

In this report the opportunities and challenges of doing business as mission both in and from China are shared. These observations from surveys, case studies and a SWOT analysis confirm great potential for BAM in and from China. It is a desirable approach to mission and Kingdom transformation as both the missional and commercial aspects show continued strength and abundant opportunity. Fruitful strategies, recommendations and action plans, plus available resources and networks are also shared in the hope that they will contribute to a multiplication of effective BAM practices in and from China.

This report is written for those interested in knowing about BAM in or from China, Chinese BAM practitioners, BAM practitioners in China, and organizations or churches facilitating BAM in or from China.

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From Milk to Meat: Applying the Three E’s of Marketplace Christians

“I gave you milk to drink, not solid food; for you were not yet able to receive it.” – 1 Corinthians 3:2

Over the past two years, I have thought a great deal about the twelve models of marketplace ministries I identified in two earlier essays: An Overview of Marketplace Ministry (MPM) Models and Bridge Ministry: The Twelfth MPM Model. As a result of review, I have separated these twelve models into two discipleship categories. One I identify as inward discipleship and the other as outward discipleship, as shown here:

Inward Discipleship                                                     Outward Discipleship

Workplace Discipleship                                                  Business-as-Mission

Executive / Business Leader Discipleship               Tentmaking

Financial Stewardship                                                      Advocacy and Mobilization

Workforce Development

Enterprise Coaching and Mentoring

Microfinance Initiatives

Business-for-Mission

Community Development Corporations

Bridge Ministry

There is an obvious 3:1 disparity between the lists, and that is as it should be. Christ-followers should move beyond the Bible studies and small group discussions of theological and ethical issues to begin spending their time, energy, and resources in outward demonstrations of Christ ministering to the world. I would venture to guess, however, that the number of organizations that fall into the first column, and correspondingly the number of participants that fall into the first column, outnumber those in the second easily by a factor of twenty times or more.

My argument is that the first column, where most of us spend the bulk of our religious commitments, represents the milk of the Gospel, to use Paul’s term. The first question then is, why is this milk? It is because sitting under the teaching of another in the Word is for our nurture, the exercise required initially to bring us to maturity in Christ. In these Bible studies, small group discussions, and Sunday sermons, we receive the teaching that helps us grow to the ability to eat meat, or, again as Paul puts it, solid food.

How then does the activity of the second column represent solid food? It does so because it is precisely that: active. The milk of the Gospel, the knowledge of God in Christ, instills strength in us to grow and to begin crawling, then walking, then running, and finally moving out from our rabboni, our teacher, to undertake the implications of the teaching. When we put ourselves into the game of actively ministering to the world (eating the meat), continue to gain strength as the very life force of God, the Holy Spirit, works in us to work through us.

So long as we continue to only intake milk, our bodies will not gain the strength necessary to carry out the Great Commandment, to love one another (in tangible ways, rather than simply by emotional commitment), and the Great Commission, to make disciples of all nations (teaching others to move from milk to meat). We will simply continue to return to the source of milk week after week, year after year, to an end of impotent, inwardly-focused ministry.

Unfortunately, this has become the plight of most of the Church in the Western world. We continue in a shallow understanding of what it means to worship God by limiting that calling to Church services or superficial activities within our own church establishment. We do not typically understand the works set before us to glorify God (Matthew 5:16) as a form of worship, but it is by the very nature of obedience.

The solid food of the Gospel replicates the Incarnation of Christ. It moves Christ followers outside the security of the arms of the mother (the Church as the bride of Christ) for each to undertake ministry to others in the world, just as Jesus sent his disciples out, just as Jesus set aside the “comfort zone” of his divinity to come unto humankind, unto the Cross.

Hebrews 5:12-14 repeats Paul’s admonition then goes on to say those mature in Christ should be able to discern good and evil. How do those concepts – good and evil – play into this dichotomy of partaking food versus partaking solid food? The goodness of God always moves outwardly and creates. Evil withdraws into self, and wreaks destruction, perhaps in a withering away of the vital, divine energy manifest in those created in God’s image. Good is not simply a character definition. It is more because character is ultimately defined by one’s action. We know that God is good by the testimony of his actions. We know people are courageous by their strength in the face of adversity. Character always manifests in action and action, as solid food, continues to shape character, reinforcing what has been learned by rote by adding the fibrous layers of experience.

If there is any doubt as to the correlation between moving onto solid food and taking action in the cause of Christ, compelled by the power and presence of the Holy Spirit in the life of the believer, simply read James 2:14-26. Then read it again and again and again until the truth of faith at work sinks in. Creation itself stands as the first clear biblical assertion that the love of God moves outwardly, in action, creating, especially as provisional allowance for “other” (what we might label “charitable action”). True love cannot be contained by thoughts, words, or heartfelt sentiments. It must act because it is the very central characteristic of love to act. In a sense, love is a form of intelligent energy.

But why is the Church, again, predominantly in the West, so arrested in this development? There are, I think, three main reasons, though to be sure there are many other related causes. The first is isolation. The Church in the United States, for example, is oft accused of operating the most racially-segregated hour of the week every Sunday morning. The vast majority of churches are racially homogenous, or at least nearly so.  However, if any institution in the world should be fighting against bigotry and racism and for integration, it should be the institution made up of every tribe and tongue and nation – the Church. Sadly the Church has not embraced the war on racism and the surrounding culture still largely lives in communities of social isolation. Blacks live in black neighborhoods, Hispanics cluster, whites tend toward areas dominated by white population, and so on. To be sure there is more racial blending now than there has ever been but we still have a long way to go.

Why would I turn this discussion to race? Because poverty is an actionable need in the world, one where the Church should be leading in alleviating efforts, and poverty changes dramatically across racial lines. Is it any wonder that our cities have pockets of poverty that often look nearly homogenous racially?

But what motivates the isolation? A friend recently published a graphic with two distinct circles that did not intersect. Inside was written “Your Comfort Zone.” Inside the other was written “Where the Action Is.” Our comfort zones, which include clustering according to financial security (income and wealth distribution), educational achievement (well-educated people tend to live in more upscale neighborhoods, and it is easy to understand why), and race, are just that: comfortable. Birds of a feather flock together. Our comfort zones reduce the stress of being exposed to alternative worldviews and standards of living. But they also hinder the growth we might achieve by facing the challenges of living and communicating across social barriers with neighbors unlike ourselves.

Some of that isolation comes from pure selfishness. Without exposure to those in need, we can limit the sense of obligation or guilt we might face in light of making self-indulgent market choices, like fine dining, expensive entertainment, opulent housing, or expensive luxury automobiles. Hence, I can feel less the sense of my own unrighteousness if I am not in much contact with real need. I believe the Bible would lead us to see this, continuously sinning against the shalom of the whole community, as a searing of the conscience (self-justification, 1 Timothy 4:2).

Our isolation leads us into the second reason, like smoke calming bees, complacency. Most of our acts of charity are conducted as arms length from those in need. Without direct contact to see how little our benevolence actually changes things, we become self-satisfied that we are doing good and must therefore be good. But goodness, in a biblical sense, goes far beyond make small cash sacrifices or handing out sandwiches and bottled water once a month. The Bible, in following the example of Jesus, asks us to lay down our lives for others (John 15:13), that this sacrifice of our time, resources, and energy is the acme of what it means to love in accord with the divine nature, character, and will of God. Real sacrifice, not just making token tithes and offerings, sacrifice that costs us something substantial, causing some real “pain” on some level, is the biblical definition of the righteousness that surpasses that of the scribes and Pharisees (Matthew 5:20). Complacency is self-indulgent but comes as a soothing balm, even seemingly as a blessing from God. But it is ultimately a deceptive strategy of God’s enemy, Satan.

How do we find ourselves in such comfortable places of unchallenged, homogenous churches and complacent lifestyles? This is due in large part to our willingness to accept a superficial reading of the Bible and seek out leaders who will simply feed us milk. It is easiest for us if we do not have to undertake the hard work of leaving our comfort zones. Therefore it makes perfect sense that we would prefer to hear from teachers who will give us enough nourishment to sustain life but without asking us to chew anything that requires effort. Think about it for a moment. Drinking milk is easy. Chewing stringy vegetables or sinewy meat takes time, effort, patience, and energy. This does not coincide with our lifestyles of leisure, time-saving, and convenience. We want paths laid out that are trouble free, that cost us nothing, especially sacrificially.

Poor (shallow, half-truth) teaching which does not point toward the life of the Church outside institutional walls is simply reinforcing what we want to hear. Poor teaching appeals to our fleshly nature but is wrapped in sermonic platitudes that please the ear. And so, we attain unto a form of godliness but without the power of true godliness (2 Timothy 3:5). Real godliness affects change in the world, not just in individual lives but in cultures and institutions, in economies and national governments. The Church has abdicated much of its power to influence the world for Christ, as a living testimony (or witness) participating in the mission of God, by adhering not to necessarily false teachings but to the Word diluted.

To conclude, I want to bring this back around to the discussion of the marketplace ministry models that led into my offering. Every human being has some connection to the marketplace and the marketplace represents the greatest opportunity to put experience, education, and expertise (the “Three E’s” of vocation) to work for the Gospel. There is at least one discipline in the “second column” marketplace ministries listed above where Christians can leverage their Three E’s to make the world a better place, as witness to the glory of God.

To utilize our Three E’s will require creative thinking (chewing the meat, so to speak) and stepping outside the bounds of normalcy (swallowing) to reap the benefit of eating (strength drawn from the nutrients within). It requires greater effort than simply maintaining the status quo. It takes sacrifice but can very well be the Cross we are called to take up, that is, to live graciously for the sake of others in response to the grace of the Cross that has been expended on our behalf.

The meat of the Gospel has been placed before you, the opportunity to be Christ in the world in tangible, meaningful, world-changing ways, by optimizing the Three E’s you have been given vocationally. Is this your calling, to optimize the greatest collection of influence, of time, energy, and productivity of your life? Will you partake?

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Re-Think Fundraising: Business for Mission (BFM)

In the opening Summary of Research Findings of “Charitable Giving Report: How Nonprofit Fundraising Performed in 2012,”[i] the author(s) state: “Overall giving is not likely to increase significantly until there is sustained growth in new donors, non-profits rebuild their multi-year donor base, and overall donor retention improves.”  While overall giving increased that year, the trending is not generally favorable to a quick fix. Most of this is due to a myriad of surrounding circumstances. Blackbaud researchers also state that there is an overall decline in the number of donors, donors are aging, government support of non-profits is declining, donors and watchdogs are demanding greater accountability, service demands are rising, revenues have barely recovered to pre-recession levels, expenses are up, and the number of non-profits continues to increase.[ii]

Let’s recap some critical data points:

  • Decline in number of donors
  • Decline in government support
  • Service demands rising
  • Expenses rising
  • Number of nonprofits rising

Any reasonable assessment of these points casts something of a pall over fundraising prospects looking forward.

Mitigating Factors

There are two additional considerations that create a rather staggering big picture.

Employment Issues

Add to all these a disturbing fact: the number of jobs for development directors at non-profit organizations far outstrips supply. In part this is due to the demands of the employer looking for experience with securing “large donations” or multi-year experience in successful grant writing. There are only X number of people with that experience already and, given the increasing size of the demand market (number of charitable organizations) and the traditional low wages afforded to nonprofit employees, it seems unlikely the demand will be met any time soon. Retention rates for key development staff is also a bit scary in that the average length of service is only 16 months[iii] and general staff turnover rates are somewhere between 20-25% annually (including part time staffers).[iv] The most-cited reason for leaving is for higher wages.[v] Give your employee the experience they need to move on then give their replacement goals that were even greater than last years’! Recruitment, selection, training, and human resource administrative costs associated with new hire acquisition and orientation are staggering.

Overhead Costs

The giving well is by no means running dry.  BUT: The National Center for Charitable Statistics reports that there are 1.4 million nonprofit entities in the United States. Collectively they receive about $1.6 trillion annually, of which 72% is from service fees (tuition, is a great example), 22% from contributions, gifts, and government grants, and 6% from “other income” (like rents).[vi] That means, $352 billion of revenues requires some form of donor solicitation or grant proposal. The generally accepted industry standard on fundraising costs is roughly 20%, putting the cost to raise funds somewhere in the neighborhood of $70 billion. On the upside, nonprofits supply 10% of all jobs and 9% of all wages.[vii]

Both of these – employment issues and overhead costs – add to the inefficiency of a “non-productive” industry (one that does not offer products or services at a profit, or even a financial breakeven). One has to wonder if there is not a better way.

A Modest Proposal

No, I am not going to suggest that we eat the children. But I am going to propose we look at modifying a model that already exists, just that we do it in a more direct and intentional way. Nonprofit universities have monies held in endowment funds. These funds are created to pay for specific functions of the university, such as departmental funding, specific professorships, or scholarship programs. Typically, money is donated and then invested in the stock market. A portion of the residual income from the stock portfolio (typically up to a 5% return) is allocated to pay for those functions. To endow a doctoral program at one institution requires a endowment gift of $10,000,000 which can predictably return $400,000 annually to fund two “chairs” (professorships), student scholarships, and program overhead costs. The remaining portion of residual income from endowed funds is rolled over to continue growing the fund. Of course, fund managers, usually an outside brokerage house for smaller institutions or whole internal departments in larger institutions (like Harvard or Notre Dame), are amply compensated from the residual income as well.

But the point is, these nonprofits own stock in for-profit businesses. And so can most, even if their total “endowment” is a bit smaller than Harvard’s $30 billion.[viii] While state laws differ (and I am not qualified to give legal advice in any locality), most states have a way to incorporate for-profit businesses as a subsidiary of a nonprofit or private individuals can incorporate then donate the new business’ stock.[ix]

Overcoming the “Mixed Model” Objection

When conversing with non-profit leaders, I often hear the comment, “I don’t know anything about running a business.” Nonsense. Other comments tend to be along the lines of unuttered disdain about mixing business and charity. If we understand the etymology of the word charity (fundamentally meaning kindness), there is nothing more charitable than meeting the pecuniary needs of individuals and communities – exactly what business does as it pays for everything . . . EVERYTHING . . . whether the foods we buy and the rents we pay, or tuition for our children’s education, or the gifts we give to support our local churches and food banks, and even the taxes we pay to provide public schools and roads and police protection. There is nothing more charitable than giving someone a job.

What these non-profit leaders tend to ignore is they are already operating on the same exchange-based model as for-profit business owners. They are simply operating under different terminology. Both for-profit and non-profit corporations have revenue (whether from sales, grants, or gifts). They both have expenses. They both pay salaries. They both have some objective bottom line(s), whether in dollars or other goals accomplished. They conduct marketing or outreach via advertising or awareness campaigns and appeals to generate their revenue and to offer their goods and services to targeted customer demographics or “clients.” They both deliver goods or services to their communities. The “business” models look very much the same when you break down their tax returns and reporting to the IRS, whether an 1120S or a 990. The operating principles involved are universal. Even households operate fiscally on this same model: income, expenditures, objectives.

To move away from the idea that non-profits should not “become businesses” or be in business, I prefer to introduce the idea that all institutions – whether for-profit, non-profit, religious orders, families, hospitals, universities, you-name-it – operate on the same exchange model. That is, every institution serves defined purpose(s) and tends to serve it / them in ways that are more similar than dissimilar.

Advantages of Non-Profit Ownership of Businesses

When Wal-Mart comes to a small town, everyone is excited that they will gain access to a broad range of products at low prices. They buy into a value perception that, in the long run, does not hold up.[x] Small businesses, owned by local non-profits, offer several advantages to the non-profit and its immediate community.

Local Impact

The three greatest impacts of local business ownership by a non-profit are local control as to how the business profits are spent, local job creation (especially living wage jobs in management and production roles), and capital retention (money staying in the community longer to fund more local charitable work or to fund greater local economic development). A small business owned by a local non-profit benefits from the vested interest of the community (as well as the highly interested non-profit board and staff) in seeing the business succeed as it provides jobs, tax revenues, goods and services, and charitable funding simultaneously.

Wal-Mart – Item 1: A new Wal-Mart in a small town tends to replace dozens of the living wage jobs of local business proprietors with just two, the Wal-Mart store general manager and the pharmacist. Non-profits owning small local businesses can help stabilize local living wage job markets.

Financial Impact

As noted above, the average cost-of-fundraising nationally is 20% of revenues. That means that one of every five dollars that comes in the door is spent to go find the next five dollars. With the revenue stream of a business flowing in the door, the non-profit can eliminate this expense. Business profits can be paid in monthly dividends directly to the charitable organization, tax free and with no labor overhead or office expense attached. In effect, the fundraising staffers are middle men reducing the efficiency of resource utilization of the non-profit.

The other middle man who can be eliminated is the broker managing the stock holdings, the endowed funds typically invested in a stock portfolio and spread across diverse companies, of the non-profit. A sub-committee of the non-profit board can be established, especially utilizing those members from the business community, to coach, generally monitor, and inform strategic decision making. It is best if this group is heavily weighted toward those who have started or own small businesses. Corporate types can advise larger businesses on the specifics of their specialization but tend to not fully understand the multifaceted role of the entrepreneur / small business operator.

Wal-Mart – Item 2: The capital grown from business profits, previously spread over many small local businesses and spent or re-invested in the local community, becomes a capital drain as the profits of the Wal-Mart are siphoned off to Bentonville, Arkansas where corporate executives make big salaries and the charitable choices of giving back are made at long distances from where the money was actually earned.

Market Fluctuations

When the market collapsed the first time in the early 2000’s, I was working for an academic institution. Almost overnight, the value of their endowment, held in a traditional portfolio and managed by an outside firm, dropped by something on the magnitude of $40 million dollars, a full third of the portfolio value.

Local non-profits, buying existing or creating new small businesses, can pick and choose businesses that tend to be recession proof, or at least recession resistant. Stock portfolios tend to follow the overall market but some businesses are relatively immune. Thrift and resale stores (and discount retailers like dollar stores) serve a charitable function as a viable alternative for those in lower income classes. During economic downturns, thrift stores tend to thrive as a broader range of higher income clientele resort to higher value / discount purchasing.

There are several other categories that would be among the best choices to protect cash flow / non-profit revenues against market fluctuations. People always have to eat. Grocery and cooking-related businesses tend to hold their own. Food is always in demand but as people spend less to eat out they will look for specialty foods and even cooking utensils and classes to fuel their new found draw to cooking at home. Healthcare, including long term care for the elderly, is a stable model. And there are many other products and services – gasoline, auto parts and repair, used cars, accounting services (including tax preparation, bookkeeping, and payroll services), childcare, computer repair, funeral services – that do not suffer the demand losses of other products – fine dining, luxury items, real estate, etc. – during economic downturns. Surprisingly there are some businesses that weather recession better than you might expect that may not come instantly to mind – donut shops, discount movie theaters, laundromats, and waste collection services.

With local charities invested in local businesses, appeals to the community can even be made to support these businesses during economic downturns and “donors” turn into customers who get tangible value in return for doing business to support the charity.

Conclusion

Any fundraiser can tell you that fundraising is getting more and more difficult every year. The limited pools of funds and donors available for appeal are faced with the ever increasing awareness of far greater needs than can ever be met and more hands out standing at the door. Many major donors, whether individuals or foundations, have already targeted where their giving is going to go. They too suffer portfolio depletion during downturns and giving drops substantially.

The best hedge against the shrinking pools and increasing demands is to create new wealth, generate new capital, and add to local job pools. Non-profit operators, especially churches, have yet to actualize and empower the multitude of gifts, talents, and resources sitting every week in the wings waiting for the opportunity to be more than just a checkbook to fund charitable activities. Business people want to be involved, have much to give in time and talent, and could possibly be the best long term solution to the crushing charitable needs of a broken world.

Work and exchange (business) were designed into creation as blessings and even divinely defined characteristics of what it means to be human. The Church especially has the opportunity to witness to the world that profits are not evil but can be intended for good. Rather than funding exotic mansions, vacations, and high fashion, business profit can be redirected to serve God and humankind intentionally by creating business ownership and management under the auspices of non-profit charities. Small business investment in impoverished areas, whether domestic or global, will also prove to be the smartest “aid” in the decades to come.

[i] MacLaughlin, Steve, presenter. “Charitable Giving Report: How Nonprofit Fundraising Performed in 2012.” Charleston, SC: Blackbaud, Feb 2013.

[ii] Chardon, Marc and Hal Willams. “The Imperfect Storm.” Charleston, SC: Blackbaud, Aug 2012.

[iii] Www.philanthropy.com

[iv]Www.charityjob.co.uk and Council on Foundations (COF), “2010 Grantmakers & Salary Benefits Report: Key Findings,” www.foundationcenter.org

[vi] Www.nccs.org

[vii] Ibid.

[viii] “U.S. and Canadian Institutions Listed by Fiscal Year 2012 Endowment Market Value and Percentage Change in Endowment Market Value from FY 2011 to FY 2012” (PDF). National Association of College and University Business Officers (NACUBO). January 2013. Retrieved 2014-01-04.

[ix] For example, see Tam, R. Stanley. God Owns My Business. Camp Hill, PA: WingSpread Publishers, 1969.

[x] I am not picking on Wal-Mart in particular but only use them as an example of the numerous chains, including franchise operations, that ultimately can be economically detrimental to local communities.

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Eden’s Bridge Blog Milestone: Top Article

Okay, so my blog is not exactly setting the world on fire but it has just passed 20,000 page views. To date, the most popular post (accounting for about 4.4% of all page views across 160 posts) has been “On Justice and Righteousness (mishpat & tsadaq)—Strong’s 4941 & 6663,”  an excerpt from my book, Eden’s Bridge: The Marketplace in Creation and Mission.

I find this intriguing because given all the other content of the blog, this post is fundamentally biblical and theological study. Mostly what I hear from folk when I share on the integration of Christian faith and economics is that they want bullet points on “what do I need to do.” I am encouraged that my most popular article is focused more on knowing God and understanding his ways.

Eden’s Bridge has been, from its start, a fledgling ministry. Without the support of an academy, I have largely funded operations out of my own pocket. I am deeply grateful to a handful of people who have come alongside and offered help when I needed it most (especially in getting to Chiang Mai, Thailand for the Global BAM Congress last April).

Right now, however, I could use your help. I believe there are two areas of concern that require more research in the business as mission movement. One is on the theoretical (biblical and theological) side where we need to more carefully consider how BAM and Christian Social Enterprise (CSE) tend to set themselves apart from Christians who are already doing “business as business” and whether creating such a dichotomy is helpful, or even a legitimate approach. Are we called to create “alternatives” to worldly institutions (like the marketplace) or are we called to lead and transform these institutions, from where they are, according to the  biblical, redemptive mission of God?

The second area for research is on the practical side. There are thousands of BAM / CSE initiatives popping up all over the world but communications between them is often all but nonexistent. We need academic leadership to step up and engage in the coordinated research of assigning, then collecting, collating, and analyzing case studies to help us better understand what is happening and where, and what we can learn from melding these data in a “big picture” conversation, especially to develop best practices, answer the big questions of funding, facilitation, and mobilizing marketplace Christians from developed economies, and press the community of faith that is transforming business as we know it. The world’s poor continue to die everyday, both physically and spiritually. What is the role of the marketplace in revealing God to the world that they might be fed materially and in Christ?

Would you join with me? Donations can be made at PayPal using my email address: davedoty@edensbridge.org. Eden’s Bridge, Inc. is a U.S. registered, 501(c)(3) not for profit corporation and all gifts are tax deductible. Thank you for your continued support, especially in prayer.

Shalom,

Dave Doty

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