Category Archives: Faith in the Marketplace

• David B. Doty © 2018

The greatest deterrent to sanctification (and irritant along the way) is the flesh.  We should be clear that by “the flesh,” we are not actually referring to our physical bodies but, like Paul, we are speaking of that attitude of self-determinism within us that rebels against God’s commands and leading.

For years, I have tried to be very sensitive to the Spirit and be obedient to God. That has meant leaving a lucrative business behind for the sake working with my wife to assure our marriage endured. It meant leaving a good job behind to return to my home state to be closer to my aging father. It has led to sacrificial lifestyle changes that required dramatic commitments. I really want to take credit for the willingness to act on these things but it in truth has been movements of divine grace. I know myself to much to selfish to think all this originated from within.

But obedience is not always about actions. It is more often about attitudes. I must confess, I have issues with authority figures. Not the good ones. I have had some great bosses along the way. But I have had some that were dehumanizing to the point of psychological abusiveness in their approach to their subordinates. My natural reaction has always been to push back. Oddly enough, I never seemed to gain much ground with them but always found myself miserable in those jobs. I have never allowed myself to compromise my pursuit of excellence in performance of my work but too often I awoke to dread the day ahead due to the angst of working in a disrespectful, and thereby, contentious environment.

Paul wrote to the Ephesians: Slaves, obey your earthly masters with respect and fear, and with sincerity of heart, just as you would obey Christ. Obey them not only to win their favor when their eye is on you, but as slaves of Christ, doing the will of God from your heart. Serve wholeheartedly, as if you were serving the Lord, not people, because you know that the Lord will reward each one for whatever good they do, whether they are slave or free. – Ephesians 6:5-8.

This, for me, is the hard place in the sanctifying process. I tell myself that I want to be holy but I cannot be with a rebellious attitude toward my bosses when they do not behave as I believe they should. I want to be treated well, and in many places, I have been. But for those who make what I think are unreasonable demands, I have a very low tolerance.

I believe the root of my rebelliousness was being raised by a very authoritarian mother. Unlike some of the issues my older siblings suffered through, I was, for the most part, a model child. I had some obvious faults but scared to death to get in any serious trouble. I desperately wanted my mother’s approval. But my rebellion manifested late in my high school years and exploded in college in drug abuse and sexual activity. I was determined, being out of my home environment, that I would live and do as I saw fit and as it pleased my flesh.

There are two biblical principles, inextricably linked which I must now address in my growth toward obedience to God, my growth in holiness, as I seek to subdue this enduring rebellious nature.

I wrote a book several years ago entitled Eden’s Bridge: The Marketplace in Creation and Mission. It was, obviously, a study on the role of the marketplace in God’s created design, before Adam’s fall from grace in the Garden of Eden, then the role it plays in God’s mission of the redemption of all of creation. In that book, I included a subchapter, titled “On Justice and Righteousness,” as these two concerns are instrumental in reforming the marketplace through time to restore it to its original design and purpose.

Along the way, I posted that essay from the book on my web site. Since posting, it has been far and away the most read thing I have ever written, have now garnered nearly seven thousand views and growing in number every daily. The essay is a word study of the Old Testament terms most often translated as justice and righteousness, mishpat and tsadaq, respectively.

Two key points of the essay stand out. One, biblical justice is not easily reconciled to our common belief about the concept. Our tendency is to think of justice as someone getting their due, the Old Testament idea of an eye for and eye, a tooth for a tooth. In effect, we think of justice as comeuppance. We even paraphrase it by calling it karma or saying “what goes around comes around.” Justice has an outcome focus. It is brought about by acts of righteousness.

The second point is what turns us on our heads. Righteousness, at least from the divine perspective (being explained through the biblical stories), requires an undue sacrifice on the part of the righteous party. If we think of justice from a human perspective, Jesus’ sacrifice was a demonstration of the most unjust events in human history. But God, being perfect and never-changing, cannot act unrighteously. Jesus’s self-sacrifice is the ultimate revelation of what divine righteousness looks like. He gave what he did not have to give – his life – for those of us who do not deserve it.

Jesus’ crucifixion was the foundation of all divinely redemptive movements toward the reconciliation of humanity to God and the restoration of creation to God’s design and purpose. And we, as Christ followers, have a role to play: We know that the whole creation has been groaning as in the pains of childbirth right up to the present time. – Romans 8:22.

How do these things connect? It is a principle I would call ecclesiastic re-appropriation. In effect, how the church works the works that glorify God (Matthew 5:16) as the light of the world that are integral to the process of redeeming the world, that is, reclaiming creation under the order of Christ’s reign.

Paul and Peter both wrote that we should not return evil for evil including our sufferings of injustice due to unrighteous masters. Never pay back evil for evil to anyone. – Romans 12:17a. To sum up, all of you be harmonious, sympathetic, brotherly, kindhearted, and humble in spirit; not returning evil for evil or insult for insult, but giving a blessing instead; for you were called for the very purpose that you might inherit a blessing. – 1 Peter 3:8-9

The Israelites were even commanded to bless their captors when in exile. Also, seek the peace and prosperity of the city to which I have carried you into exile. Pray to the LORD for it, because if it prospers, you too will prosper. – Jeremiah 29:7.

Why would God ask us to submit to even unjust authority? This is a principle of displacement. Think of someone committing an evil act against you. You can retaliate in kind and that evil remains. But when we forgive, laying our offense at the foot of the Cross, that mite of evil is removed from the world, absorbed by grace, so to speak, and overcome by the love of God.

If we have a clear understanding of God’s redeeming grace and sound biblical eschatology, we can see that slowly but surely, evil is being removed from the world over the long term. Christ’s reign in the world is increasing by the growth of the Church and by the spiritual growth of each believer. This is obviously a very long term enterprise to reclaim and rebuild all of creation, but one empowered, initiated, and guaranteed to succeed entirely by the work of Christ.

God wants us to learn to obey authority, even when it is evil (though there are distinct times he would have us speak out or actively resist – responses that must be completely subordinated to the leading of the Holy Spirit in distinct circumstances) for by doing so, we overcome that evil, not by overt battle but by humility and grace.

Frankly, when it comes to my work, I am not there yet. This essay is in direct response to my own latest battle within myself, wrestling with either serving my flesh or serving God. I do not enjoy the angst, my joy and peace are undermined. As I learn to let it go, I can move closer to God, being remade another small step into the image of Christ, the ultimate sufferer of worldly injustice.

• 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.

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

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

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.

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.