Showing posts with label Church finances. Show all posts
Showing posts with label Church finances. Show all posts

Wednesday, July 17, 2019

Keep Your Pledge Current!

Ever since Bob Malm’s $100,000 bonus, things have been a little tight money-wise for Grace Church. Don’t make Bob give up his month at the beach! Keep your pledge current! 





Tuesday, July 2, 2019

Really Scary

After wasting more than $1 million since 2004 on feckless priest Dysfunctional Bob, the church will probably take up a purse for him when he leaves. Pretty ironic, given how Bob’s action’s have damaged Grace Church.




Tuesday, December 4, 2018

See For Yourself: Grace Parishioners Asked to Pay Half the Cost of HVAC Rebuild, Despite Almost No Benefit to the Church

At a time when Grace Episcopal is barely hanging in there financially, there’s a dark cloud hanging over things. Specifically, members of the church are being asked to pay half the cost of replacing the HVAC systems in Merrow Hall, the wing of the complex that houses the school and the auditorium. Given the limited benefit to the church of the work, this expenditure, which is estimated to cost in total $626,440, is going to prove a difficult pill for members to swallow.

The work, which is confined to the Merrow Hall wing of the complex, comprises the auditorium, myriad classrooms, the tower rooms, and two small rooms on the third floor of the building — one of which has almost entirely been taken over by the school. In addition, while the offices and sacristy are not part of the same system, they should be included in the work, as the HVAC compressor on the roof that services these areas is already past end of life.

The problem comes into sharper perspective when one examines the question of who uses this space; it overwhelmingly is the school. Yes, the church uses several classrooms for an hour a week, and the auditorium for about two hours a week (coffee hour and La Gracia). The school, however, uses all the space, and on average 40 hours per week. Yet, per the terms of the agreement with the school, the church is being asked to pay half the costs. 

Yet if one looks at the use of the nave, the church uses it about five hours a week, while the school uses it one hour a week for its weekly chapel. (School staff refers to the nave as “our chapel,” and church officers as “volunteers in our chapel.” Not surprisingly, school parents often view the church as part of the school, resulting in a certain level of disrespect.) Despite this relatively high percentage of usage, however, the school contributes nothing to the cost of maintenance, utilities, and repairs when it comes to the nave. 

Similarly, the sharing of utilities favors the school. These costs are shared 50/50, despite the fact that the overwhelming majority of utilities are consumed by the school. As a result, and as a result of the school’s effective fundraising efforts, the school is relatively flush with cash, and will be able to pay for its share of the HVAC work from savings. (Amusingly, some vestry members in 2015 were very resistant to eliminating the $9,000 annual grant to the school, under the theory that “we then would be doing nothing for the school. Hardly.)

Nor is the school content to remain within its space. Over the years, it has managed to take over the clergy office attic, space in the undercroft, the music library (which was supposed to be temporary, but certainly has not been) and more. Indeed, at one point the school was trying hard to take over one or more of the vesting rooms, but it fortunately was not successful.

Is the school responsible for the church’s relatively lackadaisical attitude towards fundraising? Of course not. But at the same time, there’s little evidence that the school benefits the church. I mean, it’s not like students later become church members, or their families become long-term members. (In the past, some joined the church in order to get a discount on tuition, but pledges to the church from these “quasi-members” often were startlingly small, and a surprising number flew the coop the instant their kids graduated from the school. This discount is no longer available.) Indeed, if even half of each year’s graduating class became members, that would add up to 60 new families every year. This clearly is not the case.

The contingency funds for the project could also be an issue. Sensibly enough, the planning phase of the project includes $200,000 in contingency funding, which is a good idea when dealing with a 70-year-old building. Yes, the asbestos has all been removed, but a building that age invariably tosses contractors some curve balls, especially given the rather shoddy construction that formed the basis of the 1994 project. So, the church could wind up on the hook for another $100K.

True to form, the church has made no effort to save for this day. Even the fig leaf of the .05 percent of annual revenue, or $5,000, was zeroed out a few years ago in order to continue to pay Bob Malm’s outrageously generous compensation package. Meanwhile, staff is being asked to contribute to the costs of their own health insurance, and outreach is being cut, but Bob continues to live life large, with his annual month at the beach, his trips “out of town,” any time he feels like a week in Massachusetts or Georgia or elsewhere, and his autocratic control over the composition of the executive committee. Yet Bob has no game plan to grow the parish, no vision for the future, and no goals for tomorrow except to keep riding the Grace Church gravy train for as long as he can.

It’s time for parishioners to put the brakes on things and demand accountability from Bob, or make clear to Bob that it’s time to get the hell out of Dodge. The church simply cannot go on with an engaging but indifferent rector whose primary goals in life are to go jogging, hang at the beach, and play golf; and who evinces zero evidence of any genuine Christian conviction. Bob’s conduct over time has damaged the church on every front, and it’s time for change.

For the record, below is the current status of permitting with the City of Alexandria, which makes clear, inter alia, that the church has nothing to do with the project except to pay its share of the bill. Note the cost of the permitting and the fact that the city apparently has rejected the church’s mechanical plans as of today due to the lack of calculations regarding refrigerant quantity. Interesting, when you consider that the project originally was supposed to have been done last summer.











Ain’t it Great to Be Rich?



Wednesday, November 14, 2018

Grace Episcopal Church: Dispelling the Myth of a Balanced Budget

One of the things that’s troubling about Grace church’s governance is the enduring myth that the church has been running a balanced budget.The reality, however, is that it’s been running a deficit for many years.

Per the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 93, issued in 1987, all nonprofits must include depreciation and amortization in their financial statements in order to receive an unqualified opinion during an audit. (Another reason Bob Malm’s claim of repeated “clean” audits is inherently suspect.)

What does that mean in practice? It means that while including depreciation and amortization in the financials doesn’t alter the church’s cash flow, it does hit the statement of financial activities, or SOA. The SOA is the nonprofit equivalent of an income statement. 

Thus, if we use a value of $1.5 million for the 1995 renovations and simply allocate them on a straight-line, annualized basis over the next 20 years, through 2015 there was an extra $75,000 every single year that was not included in the SOA. In other words, most years the church has operated on a loss basis due to its failure to cover the “using up” of its fixed assets.

The matter, of course, gets worse when one considers the value of the renovations to the organ and the choir loft. Roll these into the mix, and Grace has been losing well over $100,000 annually.

Of course, some will say, “Well, we raised money before, and we’ll do it again.” But that’s a foolish argument, for attendance continues to drop, and the really generous members of the parish, who have long helped hold the whole house of cards together, are fast reaching an age when their generosity will soon be coming to an end. Yet Bob Malm, the vestry, and the church as a whole largely ignore these issues.

It will be interesting to see what the future brings.

Friday, September 28, 2018

Of Finances and Fix-ups: Fiscal Woes Ahead for Grace Episcopal Alexandria


One of the challenges facing Grace Episcopal Church Alexandria aka St. Dysfunction is that, not surprisingly, it manages its finances only slightly better than rector Bob Malm manages his personal finances. Or in other words, it’s a case of “let the good times roll,” right up until the bill comes due. 

The painful reality is that the bill has arrived, and it’s big.

Consider: Just the project to restore the stained glass windows, an congeries worth more than $200,000, will cost north of $60,000. Not a huge portion of an annual budget that approaches $1 million, but when it comes on top of other projects that the vestry has been pointedly ignoring for years, a very heavy burden for a church that is barely making ends meet.

What are these other projects? They include the rotting wood trim (rake boards, window trim, exterior woodwork on the new narthex), the replacement of the ever-failing faux slate roof over the new narthex, the repaving of the parking lot, the replacement of failing double-pane windows (all of which have surpassed expected end of life), and more. Plus, there’s the issue of items failing before their normal end of life, including the condensing boilers, which have not been appropriately maintained since Mike Hix’s death, except for a brief period in 2014. Those little mechanical monsters are seriously expensive, and a major pain in the butt to replace. Moreover, I seriously doubt that staff or the volunteers who handle maintenance of the physical plant even know what I am referring to. Oh well.

The kicker, though, is lurking right beneath the surface. With the departure of more than 120 pledging units, and newer pledging units giving, on average, much less than more established members, the church is falling into a giving pattern consistent with that of dying churches, which is that remaining members ramp up giving trying to delay the end. Thus, there’s very little capacity left for remaining pledge units to increase their giving.

Moreover, there are three factors that undercut that effort over time. One is the demographics of the church, with top givers all now retired and facing limitations on their ability to continue their generosity. Two is the breakdown in Episcopal polity in the parish, which injects risk into the equation. By this I mean that, under the canons, there are only two ways to lose one’s membership in a particular parish: to die, or to transfer. Bob Malm, however, has decided to go rogue and create a third way, which is via the unilateral decision on his part, combined with a campaign of shunning and harassment. Thus, members are faced with an unfortunate reality: They are one falling out with Bob Malm away from losing their investment of time, talent and treasure in the parish. Third is the increasing realization that Bob is not the priest people thought he was. No matter how generous one’s feelings towards Bob, his courtroom lies and his willingness to go after innocent family members, including an elderly dying woman, provide unequivocal evidence of his real values. Ugly stuff, for sure.

Nor are the specifics of my dispute reassuring. Anyone who would pursue a dying woman in court, or try to eject innocent family members like Mike from the parish, is going to have few scruples when it comes to trying to throw others out of the church. (For the record, going after the defenseless is bullying, hence my nickname for Bob, “The Ballless Wonder.”)

Then there is the issue of a replacement for Fanny Belanger. Bob no doubt will try to delay hiring a replacement for as long as he can to balance the budget, but at the same time that means a reduction in pastoral care and other services parishioners receive. Not good at a time when Bob and the vestry are soon going to be asking members to do more in the form of ponying up $600K to get the school’s HVAC back on.

At the same time, working families at Grace find Dysfunctional Bob’s lifestyle to be alien to them. At a time when many, myself included, haven’t had a vacation in years, Bob’s month every summer at the beach, his regular “out of town” junkets, and his extravagantly generous compensation package, combined with his aloof approach and lack of servant leadership, speak to a superficial faith and indifference to the parish’s welfare. Or as one wag put it, “The only time Bob breaks a sweat is when running, or when playing golf.”

Moreover, the $100K bonus Bob got paid in 2014 is cringeworthy. In a day and age when top performers at companies like AT&T may hope to snag a $20,000 bonus, Bob’s bonus is both unseemly, and a really stupid idea at a time when the church is struggling financially.

Who knows? Maybe Bob will have a flash of Christian inspiration and decide to gift his $100K bonus back to the church.

Somehow I doubt it.