In this my second post as your new chair of the Board (I’ll never do one this long again!), I want to recap for you just one portion of last week’s Board meeting—to reveal both a consequential decision made that night and also how the Board reached that decision. Both may tell something about the directions this new Board is likely to take, directions that, certainly at this early stage, you may want to encourage or discourage by communicating with us.
First, some background. As you may already know, the FUSE program, which occupies a large portion of our space during the week, is suddenly moving to new quarters, causing, among other consequences, a deficit of $26K in the budget for next year. The resulting substantial hole in our operating budget will be difficult either to fill or to work around. With that in mind, let me try to capture briefly the Board’s discussion of this particular problem and its potential meaning for the upcoming year.
We began by considering this question/concern: How should we fill the hole in the budget left by the FUSE program?
Fortunately for our discussion, some members of the Board have already been in sub-groups examining how we could optimize our space and the revenue we might derive from it. Briefly, they revealed that we are amateurs at being landlords: we have a maze of historical relationships with various tenants (for-profit and not-for-profit) that are not optimal either for revenue or for mission. Conversations among that group and with professionals in the congregation confirmed that we would have to develop significant new managerial capacity to become an effective commercial landlord, including the capacity to recruit and manage new tenants.
Our discussion moved to the relative costs and benefits of renting our space to outside organizations or companies of any kind. Fundamentally, we wrestled with this question: is trying to increase rental income an optimal use of our energy and our resources?
The primary benefit of renting our building is clear: the $26K from FUSE is a lot of money to plug into a budget that is already too thin.
We also discussed the costs of capturing that income. Acting as landlords for unrelated businesses requires considerable management, maintenance, cleaning, conflict resolution (a lot of that this year), wear and tear, negotiating to handle special events, etc. etc. And in this case, there would be the additional costs (in time and energy) of marketing, recruiting, contracting, adapting space, etc., for a new and appropriate tenant, in short order.
Further, our discussion revealed the costs of lost opportunities. Committing our space to other organizations (especially unrelated businesses) for three to five years reduces our own options for enlarging the congregation, increasing its visibility and impact, expanding its own programs and services to the community, incubating new partnerships with social justice organizations, etc. etc.—all food for thought and good discussion.
At the outset of the meeting, probably most Board members (including me) expected that we would immediately try to find a new tenant. By the end of the meeting, however, we reached a different conclusion. We decided to pause, to use this next six months to examine, experiment, and reflect on how we can best use our precious space (and other resources as well) to serve our mission. During the meeting, our ministerial staff suggested some ideas they desperately want to try with our space, experiments designed to expand our reach in religious education, music, and ministry. You may have other ideas, and we look forward to hearing them. We also want to pause long enough to revamp the way we seek and manage rental income in order to optimize our returns on that as well. This seems like a good time to reconsider and experiment.
I think we reached that conclusion for several reasons. First, we each came to feel that we could absorb the financial loss for this year (not easily, but nonetheless) to invest in our future. Careful reports from the finance committee revealed an upward trend: the annual canvass exceeded expectations, the Mayfair haul was higher than ever, the capital campaign is way over our original goal already. And we have an endowment to back us up. We can sustain a deficit for this year.
Second, earlier discussion about the capital campaign had focused us on the future. With the early signs of success for the first phase of the campaign, we are sure that our building will be safe, strengthened, and even beautiful again. For phase two, we can begin to focus on how to best use, adapt, configure, or modify all of our resources, including the building, in order to expand our congregation, our ministry, and our mission here on the green.
Third, the members of the Board recognize and share the energy and optimism of our congregation and the confidence we have in our ministry and staff. We want to reflect and amplify that optimism. We want to invest in our future.
We hope we made the right decision, and we hope that you will tell us what you think.