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Messages - Mark_Hofman

I think you'd need to read the Kenyan thread and my concern about the cows for Kenya to better understand the context under which I started this thread.  I appreciate you reply...

I have read it; did read it. And I've read what's been posted on the Brothers site. I actually PERSONALLY enjoy reading the various interchanges on all kinds of topics that happen here, and on other blogs.

So, if I'm to understand your perspective correctly, the 'skimming' you are referring to is that which is alleged to have taken place by leaders in the Kenya church and not 'overhead' as 'skimming' by the nonprofit soliciting donations? (Note: I only add the word 'alleged' to reflect that I personally do not know all the facts which play into the story that is unfolding, not to defend improper conduct by any church leader. Eighth Commandment stuff.).

Working with partners in other countries is risky. Shoot, working with partners here in the U.S. can sometimes be risky. We can't control other people. I can't control what you choose to do with God's material gifts; neither can someone control what I do with His good gifts.  The IRS even admits that when it grants a deduction because that can't happen unless the donor relinquishes control to the recipient organization.

Culture and context in other counties, especially in the under-developed parts of the world, adds an unsavory dimension to ethical non-profit work.  Bribery in the U.S. is illegal; in other countries it is also not legal but is an expected part of the process to get things done whether a non-profit or a for-profit company is involved.  So does one shun it on the fact that it's illegal here, or engage in it if that is what's required (culturally) to get the work done in another country? (Note: This paragraph has been corrected as the result of an exchange later in this thread ~ MDH.)

I'm not going to get into my own observations about how the church has conducted God's business over the past decades.  If I have specific concerns based on the information at-hand, I must share them with my supervisor, the Synod's Chief Mission Officer, and perhaps even the Chief Financial Officer or Chief Administrative Officer who both report directly to the BOD (Fourth Commandment stuff) - not in a public forum.  But I will say that if I see practices which were or are questionable, I must then be involved in correcting those practices if the church is going to pursue using God's gifts in a 'more excellent way'.  If one good thing can be lifted up about the restructuring, it's that we've been handed the opportunity to re-examine pretty much everything that was done in the past to determine if it should continue, or be put into a close-out process.  We are a  learning organization.

As evidence, try going to and finding any marketing, promo or fundraising that references Cows For Kenya now - today. That program came to a halt before I started at Synod, and we haven't resurrected it. Reviews happen with all kinds of restricted gift programs, but I'm not authorized to go public with that information (share specifics in this kind of forum) since my words could be misinterpreted and someone might be tempted to lay blame on individuals who simply inherited what was in place the day they came on board - which was inherited from people who came before them.  Or on individuals who are no longer employees/workers at the I.C. (Eighth Commandment stuff again.)

I've also observed that the typical pew-sitter operates with an understanding of the church's mission work that is usually about three to five years out-of-date.  It's normal. But it means that things that happened several years back are perceived to take place today; however, the reality is such that the organization is likely to have learned and moved on.  We're not the best (yet) at communicating well the facts about how much we've moved on to a better way of stewarding all of God's gifts.  And even when we try to communicate, some folks have a hard time listening or understanding.

First, I want to thank Eileen for taking the time to share her thoughts.  Thank you, Eileen.

In evaluating charities for their worthiness, I also recommend checking with them to see if they operate in compliance with the following:

Code of Ethical Principles and Practices - Association of Lutheran Development Executives

AFP Code of Ethical Principles - Association of Fundraising Professionals

The Donor Bill of Rights (Both ALDE and AFP)

At the LCMS, we've made a point to make these documents readily available (without being obnoxious about it) on a FAQ page ( Other reputable organizations make the same kind of commitments. We don't lead the pack; but there IS a pack of ethical organizations.

Here is a story about how conditions for low- or no-overhead tolerance can hurt: When I started in my current position three years ago, I asked the people on my team at that time about their knowledge of the Code of Ethics and the Donor Bill of Rights.  Sixty percent admitted they had no knowledge that such things existed.  Twenty percent didn't answer the survey question (likely out of fear of admitting they didn't know).  Only twenty percent were able to reference specific training they had received in terms of ethics and donor rights.

But when it comes to budgeting, one of the first places an organization will tend to cut - in order to reduce overhead costs - is staff training and professional skills enhancement which can hit things like "Act in the best interest of the donor" (Code of Ethical Principles and Practices, ALDE).  Not only does that hurt donors, it results in high levels of staff turnover where recruitment, training and replacement costs can be two to ten times higher than the costs associated with staff development (Ref. Burke, P. (2013.) Donor Centered Leadership. Cygnus Applied Research, Burk & Associates Ltd. United States).

Many sources are available to guide and counsel both donors and nonprofits toward true, mutually-beneficial partnerships that reduce overhead costs to prudent levels and result in the types of impact BOTH (donor and organization) want to have on people.  Here is one website that is simple and fairly straightforward. (National Council of Nonprofits)

It's interesting to me whenever people refer to overhead as "skimming," as if any portion not going to the end-user is unrelated to the work that is being performed.  So, what definition are you attaching to 'overhead'?

Folks may want to spend some time reading the information available at:  This is an effort of the three major watchdog organizations: Better Business Wise Giving Alliance, Charity Navigator and Guidestar to shed some light on a topic that has really fouled things up for a lot of people.

The cost to solicit donations (when they aren't freely offered up), and especially the cost to care for the donor who makes gifts, are part of the cost of doing 'missions' in this era. Generating and mailing tax-deductible receipts, answering questions from people who want to be good stewards, providing accountability reports, keeping records over the course of a year in case receipts are misplaced, ensuring donor restrictions are met under IRS regulations and the specifications of the Financial Accounting Standards Bureau (FASB) etc. have to be borne somewhere, by someone.  The costs of promoting mission opportunities in ways other than solicitations have to be borne by someone. 

Whenever my team and I pick up the telephone, or answer an email from a concerned or enthusiastic donor, or send out materials that have been requested, or tailor a donor's record to better align with their interest, the organization incurs an overhead cost.  (But I'm answering this thread on a Saturday night, on my time and simply because of my personal and professional interest in 'overhead' as it relates to non-profits)

If the concern is that an organization skims money from mission donations to, say, pay the guy that cuts the grass at the office building then your concern would be well-placed.  But there are rules that discourage (if not prohibit) that kind of thing from happening.  A true example for the LCMS is that Board of Director policies prohibit the use of restricted contributions to fund things like the salaries of the executive officers.  So your mission donation can't pay the President/CEO, vice presidents, or other executive officers salaries.

You can certainly find ways to send 100% of your donation to the field.  I can tell you, as a trained professional, you will run some funky risks doing it that way.  For example, pick a missionary in Africa and mail them a personal check.  Whether they can actually cash that check and get 100% of the equivalent funds from the local bank isn't always a certainty. The local bank in Africa may charge a processing fee - overhead. They may charge a currency exchange fee - overhead. The bank, depending on the country, may want a gratuity for handling your check - overhead.  Because you made a check payable to the individual missionary, you lose the tax-deductibitliy of the donation (ref. IRS Publication 526). And you have no real reassurance that the missionary will use the money to spread the Gospel rather than simply go out for a nice relaxing evening on the town, or to buy a DVD of their favorite movie.

My point is that anyone who uses overhead as a measure of effectiveness of an organization - or even efficiency for that matter - is misguided. Perhaps a better question to ask is what kind of impact you want your support to have, and which organization - regardless of their overhead - is in the best position to help you make that impact. 

As an aside: I also find it interesting that most nonprofits - including church related ones - have an office or department that exists to serve donors, pastors and financial advisers - and provide printed or electronically accessible information to help people make informed choices. My team even provides a toll free number and an e-mail address to make it easy to contact us, yet I constantly read discussion threads about these kinds of topics and wonder: What are we doing or not doing that keeps people from calling us to inquire about these kinds of things?

But about that 'skimming' thing again - what feeds that perception? 
Your Turn / Re: LCMS to Open New Office in DC
March 04, 2015, 05:46:37 PM
Lest the conversation about 'lobbying' continue to drift too far afield, the proposed office is applying for recognition and incorporation as a 501(c)(3), not a 501(c)(4).  It is intended more to speak OUT from Washington to the LCMS (clergy, church workers, laity) on affairs affecting life, biblical marriage and religious liberty, not IN for the LCMS to influence legislation.  If it were intended to lobby, in the commonly understood way, it would have to be chartered as a 501(c)(4).  As a 501(c)(3) it must accept the prohibition against telling people how to vote or who to vote for as well.

Yes, it will share with Washington D.C. folks the LCMS perspective on issues, because the LCMS is being asked to join in the discussion and bring to bear some of the treasures of Lutheran theology we steward on the three named topics.  But the preponderance of it's work is to listen, observe, understand, translate and the communicate out to Synod about issues of great and grave concern to its members and households, as government oversteps its Constitutional boundaries and intrudes into realms assigned by God to the church. That is the function that qualifies it as a 501(c)(3) - informing and equipping of Synod's people - not a 501(c)(4) which would entail advocacy to lawmakers on behalf of Synod's people.

That distinction is important -- (c)(3) vs (c)(4) -- and should not be covered over or smothered in the discussion.
Your Turn / Re: When zero equals good
February 19, 2015, 10:42:32 PM
The blog statement dated Feb 6 would have reflected information reported to the Board of Directors at their November meeting or perhaps the August 2014 meeting, not their most recent which took place last weekend. I'll try to share some additional information (not everything) to chew on, for those who enjoy dispensing color commentary.

The LCMS receives 40% of it's total annual gift income in just one month: December. Revenue in November supplies another 15%. But the news regarding borrowing against designated funds is due to a number of factors beyond that statistic:

1. Yes, there are fewer employees at the International Center.
2. Units (used to be departments, or boards or 'ministries'), at least as long as I've been there, have consistently exercised very good spending discipline, and most are regularly under-spending their authorized budgets.
3. There is a greater emphasis on soliciting and encouraging both unrestricted gifts, and agile "use where needed most" restricted gifts rather than very tightly restricted contributions that may be used only for one very specific purpose and not anything else.
4. We've been blessed by a number of above average unrestricted and 'where needed most' restricted bequests.
5. A multi-year discouraging (but understandable) slide in unrestricted support from Sunday-morning worship offerings, routed through district budgets, has slowed. Several districts (not all but several) have stabilized and even increased their annual pledge of financial support to the national office (SDG).
6. Synod implemented a hierarchy (priority) for fundraising and spending that works opposite to one another:  try to raise unrestricted and less restricted funds vs. tightly designated gifts first; but when spending, draw available tightly restricted first (according to the restrictions imposed by the donor), and supplement or fill the gaps with where-needed-most and unrestricted funds as necessary.  That approach wasn't possible before the restructuring.

I'll stop here for a moment.  This isn't how the borrowing is repaid.  This is what must be done to avoid borrowing in the first place.  Spend less than you take in, and spend what is available intelligently with very good discipline by management.

Good budget discipline also sets aside dollars for debt service and repaying borrowed internal funds, and a small unrestricted contingency.  The President, Chief Financial Officer and the Board have held a very tight line in a way that created the conditions to repay money borrowed from these very tightly restricted designated funds (at one point Synod maintained in excess of 1,300 tightly designated accounts and raised mostly to replenish those accounts.

(And since I took the bait and stepped on the soapbox, I will also raise an issue brought before the 2013 Convention that impacts Synod's budgeting process as well: the $2.25 million annually in unrestricted funds which must be used pay principle and interest on a consolidated debt incurred by Concordia University System schools, a debt incurred over the course of many decades.  Necessary to be sure to keep institutions solvent in hard times; however, it is a nagging use of generous "work at large" funds that could instead be used to proclaim the Gospel, serve and support districts/congregations better, bolster seminary subsidy, send more missionaries, etc.  That debt, too, is slowly being repaid.).

But the real reason this was possible is because people - regular PEOPLE - in the LCMS, including communities of faith gathered around Word and Sacraments in congregations with good pastoral care, walked along side each other - knowingly and sometimes unknowingly - giving of God's blessings in both life and death to make it happen. President Harrison didn't - and couldn't - repay that debt himself. Neither could the CFO, Board of Directors or employees of the International Center. God's people in the LCMS, living out their baptismal faith, made that possible. 

If nothing else, my brothers and sisters in Christ, please stop and whisper a prayer of thanks to God for each person who sacrificed personal needs and wants, and supplied what was necessary over the past several years, to make the repayment of that internal debt possible - while also sustaining our Synod's national and international witness and mercy work.  Please.  We owe them (and perhaps some of you) that much.

It's a moment to give thanks, and to marvel at the grace of our God who does all things well using simple, sinful but forgiven people.

And if you take the time to read the entire statement, this same process (whether a miracle, good leadership, grace, whatever...) has created a three month reserve of operating cash. President Harrison shared news in the same notice that the LCMS continues to make progress in fulfilling the will of Synod, expressed in Convention, to double the number of LCMS missionaries.  He also sneaks in an insightful statement that decision-makers are even monitoring the pace of growth to ensure the missionary force does not grow at a rate the Synod's people cannot financially bear.

And that's all I have to say about that. Sure, we're all a bunch of no good "bureaucrats," but every employee and leader I know is trying their best to steward what the church entrusts to us.  We're not perfect, and we must be held to account. Seeking to understand the truth means, in a situations like this, we must acknowledge (at least) that more people have been involved than those who drive or walk into Kirkwood every morning.  I firmly believe the President's statement of thanks was directed at all those other people - God's stewards coast to coast and border to border - who took courage and joined forces to make this good news possible.

(Forgive the spelling, grammar and punctuation errors herein.  I can't find my reading glasses.)
Your Turn / Re: Gun Control Issues and Clergy
August 31, 2014, 12:14:26 AM
Quote from: John Mundinger on August 15, 2014, 11:35:52 PM
Quote from: LutherMan on August 15, 2014, 08:25:57 PM
Quote from: John Mundinger on August 15, 2014, 08:06:29 PM
I knew an LCMS preacher who wore cowboy boots and packed heat under his cassock when standing in the pulpit.
That's how it should be.  We live in dangerous times...

It was western Colorado and in the '60's.  It had nothing to do with dangerous times and everything to do with his persona.

That sounds like a pastor in Glenwood Springs we used to camp and fish with.  He taught my dad a lot about camping, hunting, fishing, and how to put an edge on a pocket knife. If it's the same pastor, it was his persona.
Your Turn / Re: The Direction of LCMS World Mission
August 16, 2013, 03:16:09 PM
Just a quick (and possibly minor) point that should be injected into this discussion for those who don't follow LCMS things so closely.

Post-restructuring, the Office of International Mission (LCMS International Mission) is not simply LCMS World Missions re-branded/re-badged. The two names are not synonymous. 

LCMS World Relief and Human Care, as a stand-alone entity overseen by an elected board, no longer exists even though the type work it carried out continues as "Mercy".  LCMS World Mission, as a stand-alone entity overseen by an elected board, no longer exists even though the type of work it carried out continues as "Witness".

Witness are Mercy are now being done together, synchronized, with the distinction of happening either internationally or nationally.  For national mission, the added work of a number of old stand-alone departments (Youth, Worship, Stewardship, etc.) that rightly is about our "Life Together" is also being synchronized.

This shift makes the experience question a bit more murky. Experience with what?  Just missions (witness)? Just human care (mercy)? Both?

All this is under the supervisory aegis of the Chief Mission Officer who, I can attest, fully understands the cross-cultural element.  He also understands the socio- economic- and political nuances of foreign environments, and is fully qualified in the arena of strategic planning. Those of us serving under him (4th Commandment) agree to execute the defined mission of the LCMS as the elected leadership designs and defines.

Again, the first point - OIM is more than a re-named WM - is a minor contributory factor to this thread; however, it is one that should be considered in the context of the discussion for those who haven't been following restructuring in as much detail as others.  Will bow out now.

Mark Hofman

(who - full disclosure - also wrestles with the issue of strategic direction and vision as the executive director of LCMS Mission Advancement because we ultimately have to communicate it to investing stakeholders)
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