First Presbyterian, DallasMembers: 1,600
Annual Budget: $3.5 million
(all numbers are approximate)
The Rev. Dr. Joe Clifford spent six years in the banking and finance business in Tennessee before he began working with Presbyterian churches. The background’s come in handy, as the pastor and head of staff at Dallas’ First Presbyterian Church, an economics major from Auburn University, has had to do some fancy figuring to help keep the Dallas church on track over the last three years.
The 150-year-old-plus mainstream denominational church is located in the midst of a growing urban center. It has a re-energized farmers market a few hundred feet from its steps and a new $14 million building rising on its property.
But Clifford says the church has had to innovate to balance its books. “We’ve done creative things like use a Lilly Grant for a pastoral residency program,” he says. “We’ve had hiring freezes and no pay raises, but we were very glad to survive with no layoffs.”
At the same time, Clifford says, “our pledge Sunday for the capital campaign [came in October 2008] right in the middle of the stock market crash, and our congregation pledged over $9 million. That’s astounding.”
Clifford, who came to First Presbyterian from a similar position at a suburban Atlanta church in 2006—just as the Dallas-area economy began to struggle—says he faces the same balancing act in his church every day.
“The church is a divine instrument, but a human institution. It’s a balancing act every church must face,” he says. “It’s certainly more complicated than what I did in the corporate world. I can promise you, most businesses don’t see themselves as a divine instrument.”
First Presbyterian’s building project—it includes a new “welcome center” as well as various renovations and additions—was originally discussed in 2008, but construction didn’t begin until late last year.
“That helped us in a sense that we were bringing money in on the capital campaign, but not spending it,” Clifford says. “When we actually began construction in late 2009, we got a better price from our construction company, because they were hungry for business. Plus, the price of building materials had also dropped, so that was a big advantage, even though we didn’t plan it.”
Friendship-West Baptist, DallasMembers: 12,000
Budget: $10 million total
Rev. Rick Hill spent most of his professional life in the corporate world. He earned a mechanical engineering degree from the University of Houston and then worked for U.S. Gypsum and later DAP Industries in Houston; Jacksonville, Fla.; and Dallas.
Although he was a church member and supporter for years, Hill thought he knew enough to stay out of the church-business world until he got a call from Friendship West Senior Pastor Frederick Haynes, who asked him to help run things.
“This is a multimillion-dollar business, but the church is so much more difficult than the corporate business,” says Hill, who’s now Friendship West’s executive pastor.
“If we did all the things people do in the corporate world, people would accuse the church of being cold and hard-hearted,” he says. “We have to be [both] loving and efficient.”
Although Friendship West has avoided layoffs and salary cuts over the last several years, it did have to close its church school this summer due to the economic downturn.
“We worked hard to save the school, but had to close it,” Hill says. “That was a very hard thing to do. But that is part of keeping the body of the church together.
“I feel Dr. Haynes gives us the what and the why,” Hill adds. “I focus on the how and the when.”
Like many large churches, Friendship West operates with multiple entities, including social and human services, a development group, a social-justice operation, and an educational arm.
“We have a large, multimillion-dollar note on our building and we have a $25,000 to $35,000 utility bill a month, depending on the season, but we have to let the ministry of the church go forward,” Hill says. “We give away $100,000 to $125,000 just to the poor and homeless every year.”
One newly employed tool for financial success is applying for more corporate and government grants, which can be used for some facets of the church operation. Another strategy is embracing a money-saving concept rarely seen at many large corporations: the power of volunteers.
“We have 2,500 volunteers at Friendship West. There is no way we can run the church on a dozen paid staff people,” Hill says. “We are asking people to work for free, and then asking them to give significantly to that work. You don’t ever see that in corporate America.
“As a business, I get to work for the creator of the universe,” Hill says. “If my game was good outside the church, it better be even better here.”
The Cathedral of Hope, DallasMembers: 4,000
Budget: $2.5 million-$3 million
Rev. Dr. Jo Hudson knows all about facing challenges in her chosen profession. The Southern Methodist University Perkins School of Theology graduate is one of the few female senior pastors in North Texas and leads her 4,000-member church, the world’s largest predominantly GLBT (lesbian, gay, bisexual, and transgender people) congregation.
After taking over from popular 20-year senior pastor Michael Piazzi in 2005, Hudson found she was sailing into financial storms by late 2007.
“I could tell we would be facing hard times, so I formed a church committee and put everything on the table to be cut, including The Peace Center,” she says, referring to a $5.2 million church facility that survived and is scheduled to open later this year.
Ultimately Hudson was forced to impose layoffs in both 2008 and 2009, along with pay cuts—some very large—for most of the employees who remained.
“We try to be professional, yet compassionate,” she says. ”The difference between churches and business is that we wait longer than most would have before coming to that decision. And then we were always asking, is there another way? Sadly, for us, there wasn’t.
“To a person, the people laid off were really hurt, so I don’t know if there is a really good spiritual way to do it,” Hudson says.
Christopher Thomas, a Texas Christian University Brite Seminary degree student who serves as executive director, said that online giving has saved Cathedral of Hope from even worse financial trouble.
“We are almost at 50 percent online giving now, and that has greatly helped us,” Thomas says. “We are loath to cancel services because of the summertime slump, but the online givers allow us a consistent stream of income when we do.”
While both Thomas and Hudson said the outlook for Cathedral of Hope is cautiously optimistic, Hudson admits that getting the finances in line is an ongoing challenge.
“Every morning coming into work, I’m listening to the news on NPR,” she says. “Sometimes I’m listening so hard to the business outlook, I can hardly drive.”
Prestonwood Baptist, PlanoMembers: 28,000
Budget: $27 million, church; $70 million total operatio
If there’s any institution that symbolizes the resounding success of organized religion in North Texas, it would likely be Prestonwood Baptist.
It grew from a small church “plant” meeting in a city of Dallas recreation center 32 years ago, to a 28,000-member megachurch, currently sprouting in Plano and Prosper.
In the middle of it all is the son of a chamber of commerce bookkeeper and a former comptroller for a small Arkansas plastics factory, who together oversee a combined $70 million operation.
“Every day I pray for wisdom and discernment,” says Executive Pastor Mike Buster, whose mom kept the financial books for the Texarkana Chamber of Commerce. “But that sure doesn’t mean we don’t use business principles.”
Buster has plenty of chances to do that, in an organization that includes eight separate entities headed by the church itself with a $27.2 million dollar budget.
Prestonwood includes a Christian school, a massive sports operation, radio and TV outlets, a bookstore, a pregnancy center, and a large food court, all operating on a breakeven financial basis. There are five separate 501(c)3 corporations to manage the various entities within the overall church. These entities are all overseen in some way by Buster and executive director of administration Alan Monk, former controller of Gaylord Container Corp. in Pine Bluff, Ark.
Buster says he applies a basic principle to all church operations: “We should never try to spiritualize management problems, and we don’t manage spiritual issues. That applies to everything here.”
Although he has no formal business training or experience, Buster says he’s fascinated by reading business publications for ideas and is always thinking about how he could improve operations. One of the first big decisions he made during his 17-year tenure at Prestonwood was confirming the church’s switch from an employee health insurance plan to a self-insured model, and requiring all employees to participate in a health and fitness program to help reduce insurance claims.
“That has literally saved millions over the years,” he says.
One project Monk spearheaded was an energy-education program that included hiring the church’s first energy consulting group and regulating all of the church’s energy needs. That decision has helped the church avoid $4 million in energy costs since 2006. Newsweek magazine recognized the church for its energy-education program, and Prestonwood was named Best Green Church in a national church conference.
“I’m using every business principle I learned at Gaylord, but I think it’s harder because you have to be a lot more sensitive to the people,” Monk says.
He also compiles a complete summary of weekly receipts from the weekend services. Monk then e-mails it to Buster and senior pastor Jack Graham by Monday afternoon to be reviewed for all trends, positive and negative.
Buster says Prestonwood has not been immune to the national financial downturn, but has worked hard to stay in front of it. “We have thankfully never had to lay off staff, but we had a hiring frost, not a freeze,” he says. “We have certainly done more with less people. Everybody has more on their plate these days.”
The Potters House of DallasMembers: 30,000
Budget: $20 million, church; $30 million, overall
Potters House enior pastor T.D. Jakes is probably the best-known preacher in North Texas. He travels nationally and internationally and has become famous for his movies, best-selling books, and sold-out conferences.
But it’s up to Dallas lawyer-turned-chief operating officer Darwin Bruce to oversee and separate the projects from the super-charged to the spiritual.
Says Bruce, who got his law degree from Southern Methodist University and owned his own company before joining Potters House: “Bishop Jakes has a for-profit company [TDJ Enterprises] which does his books and movies, etc., while the church operates as a nonprofit to spread hope and opportunity to Dallas and the world.”
Bruce oversees the massive Potters House facility in South Dallas, which began here in 1996 and moved into its multimillion-dollar worship facility four years later.
“Our motivation is to support the community, not to make money,” Bruce says. “The biggest difference between corporations and churches is that the church is mission-driven, not profit-driven.”
That doesn’t mean Potters House was immune from the tough financial times that have hit most businesses and churches over the last three years.
“We restructured departments and consolidated vendor support. We had to make sure we ran a very tight ship,” Bruce says. “In 2008 we had some layoffs and did not hire anyone. It is so important for us to manage cash flow and expenses.
“We have to be more transparent with our large-size church,” he adds. “We have to be upfront in saying, ‘This is what we are spending your money on.’”
University Park United Methodist Church, DallasMembers: 1,500
Staff: 20 fulltime; six part-time
Budget: $2.4 million, church; $1.3 million school
George O’Reilly spent 32 years working for (the old) Southwestern Bell telephone company. But now he’s overseeing the preschool business as he helps his church continue to prosper in one of Dallas’ most affluent areas.
The church’s director of administration and development is in his fifth year overseeing United Methodist’s multimillion-dollar budget. But an ongoing, $8.5 million building program points to where the church’s competitive future lies.
In August, the church completed a $1.2 million renovation to the building housing its popular Weekday School, on time and on budget. A new multipurpose building and additional renovations are under way as well.
“It shows that children are a priority here, and we wanted to have nice facilities for them and their teachers,” O’Reilly says. “We completed about five months of work in three because it’s something that needed to be done.”
The school, which operates under the church’s 501(c)3 tax status, has its own board of directors and a separate $1.2 million dollar budget. It charges between $1,350 and $6,250 a year, depending on the child’s age and number of days attended.
“I think our prices are in the hunt with others in the area,” O’Reilly says. “But we feel we have the best quality learning for the children, ages infant through kindergarten.”
While working at the phone company, O’Reilly says, his job was to look out for the best interests of the company’s shareholders. Now he says he’s looking out for the interests of the church and its mission.
To achieve the budget surplus he sometimes saw in his corporate job—and hopes to see more of at United Methodist—O’Reilly preaches a gospel of discipline and conservative budgeting.
“You don’t build a big program and then hope is all works out okay. That’s not being a good steward,” he says. “We have two sources of income—our members’ contributions, and room rentals, school, and our foundation.
“I think, historically, churches always lag six months behind the general economy, so I think the future is bright for 2011,” O’Reilly says. “But you always have to anticipate trouble and tight times.”