INTERIM REPORT OF ST.

JOHN‟S CHALLENGE
COMMITTEE
June 27, 2010
 Agenda
2

a. Setting the Stage

b. Research and Lessons Learned
c. Interim Recommendations and Next Steps
 Setting the Stage: Annual Meeting
3

 Budget out of Balance: $146,000 (expenses larger than

revenues)

 Strongly divided opinions in congregation about what to

do

 Result:
 Split vote to approve a 3 year plan to balance revenue and
expense
 Approved creation of data and Challenge committees and
report back to Council and Congregation
 Setting the Stage: Financials
4

Summary Financial Report 5/31/2010 Budget Annual

Y-T-D Y-T-D Budget
Total Income $ 379,693 $ 406,782 $ 976,276
Total Operating Expenses 312,185 333,980 812,944
Mortgage Expense 68,055 68,055 163,332
Total Expenses $ 380,241 $ 402,035 $ 976,276
Net Surplus (Deficit) ($ 547) $ 4,747 -

Budget assumes $94,276 in reserves use; plus $46,000 in challenge

revenue. Through May, no reserves have been used. No challenge revenue request
yet made.
 Monthly Update on Giving 2010

Offerings January Feb. March April May Total

By Month
2009 $ 47,540 $ 52,540 $ 75,578 $ 55,214 $ 80,981 $ 311,853
2010 $ 87,945 $ 62,082 $ 61,150 $ 56,255 $ 69,585 $ 337,017
Increase $ 25,164

Total Income January Feb. March April May Total

By Month
2009 $ 50,203 $ 57,318 $ 99,464 $ 75,003 $ 98,130 $ 380,118
2010 $ 91,650 $ 67,748 $ 74,067 $ 64,424 $ 81,964 $ 379,853
Decrease ($ 265)
 Expenses 5/31/2010 Budget Annual
Y-T-D Y-T-D Budget
Setting the Stage
Benevolence & Social Concerns $ 44,990 $ 45,388 $ 119,230
91% in
6 Total Personnel 203,997 218,349 524,038 these
Property & Grounds 32,041 31,648 77,076
4 areas

Debt Service 68,055 68,055 163,332

Adult Ministry & Education 6,505 9,678 19,420
Business Management 10,278 11,126 26,620
Children's Ministry & Education 3,253 3,637 9,550
Evangelism & Communications 2,111 3,375 8,100
Faith & Health 626 1,356 3,125
Stewardship 435 720 2,800
Worship & Arts 5,416 5,296 12,660
Youth Ministry & Education 2,507 3,063 9,050
Mutual Ministry 26 344 1,275
Total Operating Expenses $ 380,241 $402,035 $976,276
Of the Benevolence: $33,000 is pass-through: Food Shelf/World Hunger/LWR/Missions.
Largest of rest: $55,000 ELCA
 Setting the Stage
7

 Cash Status:
 Unrestricted funds: $360,559
 Approximately 4.5 months cashflow

 Outstanding Debt Status: May 31, 2010

 $1,662,018
 Setting the Stage: Charge
8

Approved by St. John’s Congregation Council April 27, 2010

The Challenge Team in coordination with church staff and appropriate boards and subcommittees, is
charged with the following by the St. John‟s Congregation Council:

Charge: Charge Goal Current Status/Goal

1. Gather information on Congregation: May 31, 2010. COMPLETE
2. Review Membership rolls and Trends: April 30, 2010. COMPLETE
3. Develop Strategic Plan: April 30, 2010. SUMMER/FALL
4. Strategies to increase attendance May 31, 2010. SUMMER/FALL
5. Strategies for increased giving May 31, 2010. SUMMER/FALL
6. Routine updates on Progress on-going IN-PROGRESS
7. Final Report to Council/Congregation Sept.30, 2010. IN-PROGRESS
 Setting the Stage: Charge
9

Why not just cut or ask for money now?

1. Concerns at Annual meeting went beyond just finances (e.g.

membership trends, staffing levels, etc.)

2. Many different assumptions about congregation‟s finances,

membership, and programs ---but not based on facts

3. People want to contribute to something they believe in. We need a

clearer plan for St. John‟s both programmatically and financially
before asking for more money.

4. Long-term problem needs a long-term plan.

5. Current finances „on track‟ and reserves allow thoughtful but timely
process.
 Setting the Stage: Workplan
10

 March:
 Gather, develop and understand the Charge

 April/May:
 Gather Information – to understand congregation history and current status

 June:
 Interim Report to Congregation: lessons learned, interim recommendations and next steps.

 July/August:
 Review and focus congregation mission, strategies, programs, resources

 September/October:
 Make recommendations to Council and Congregation for Long-term workplan
 Launch implementation groups based on the workplan (both on giving and program sides).
 Research and Lessons Learned
11

 Giving

 Financial History
 Current Finances

 Membership

 Congregational comparisons

 Survey

 Program summary

 Staff time study

 2009 Giving
12

St. John‟s has many members that do not give $

• 723 Households in last annual report
• 279 or 39% give $0

Most of St. John‟s budget comes from small number of

members
• 444 households with recorded giving: of these

• 11% gave 41% of funds

• 29% gave 28% of funds
• 60% gave 31% of funds
 Financial History:
13

 Giving and spending growth over 15 years has been relatively stable,
though with spending growing slightly over giving.

 Financial challenge began in 2003 with the building addition.

 Several attempts to address the challenge (campaigns)

 Decision to direct some of campaign dollars to debt interest vs.

principal….delayed financial challenge

 Congregation faces financial challenge that can be defined in 2 ways

 $146,000 recurring annual gap (expense over giving)
 $1.6 million outstanding debt
 Financial History: General Fund
14 Net (loss) or gain in General Fund
$40,000

Debt Service
Paid from Campaign
$20,000 2007-2008

$-
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

$(20,000)

Addition
Began 2002
$(40,000)

$(60,000)

$(80,000)

$(100,000)
 Financial History: Capital Campaigns
15
DESCRIPTION
Cost of ‘New Building’ construction (2002-2003) $3,262,185.55

FINANCING OF BUILDING-
FROM "GWG“ (Growing with Grace) $1,287,522.83
FROM LONG-TERM DEBT (2003) $1,974,662.72
$3,262,185.55

Cumulative Fund Drive Activity-

Sources of funds:
Allocation of special gifts $18,000.00
Contributions (both SOG and GWG) $2,546,249.19
Interest income $16,460.13
Total Income $2,580,709.32

Uses of funds:
Fund raising costs & consulting ($94,721.89)
Benevolence ($160,158.21)
Building project costs funded ($1,287,522.83)
Debt service (both principal and interest) ($1,038,306.39)
Total ($2,580,709.32)
 Where the Money Comes From:
16 2009 General Fund Revenues: $927,286
Rental, $7,579 ,
1%
Unpledged Designated/
Offering, Appeals, $38,839
$171,921 , 19% , 4%

Reserves,
Used for legal costs
$72,797 , 8%
Pledged Offering,
$619,934 , 67% Interest Income,
$12,455 , 1%

Other, $3,763 ,
0%
 Where the Money Goes
2009 General Fund Expenses: $917,736
17

Benevololence,
$124,475 , 14%

Support Staff
Ministry, Debt Service,
$307,326 , 34% $139,932 , 15%

Business Mgmt.,
$30,292 , 3%

Boards and
Program Costs,
$52,658 , 6%

Pastoral Ministry, Property,

$188,020 , 20% $75,033 , 8%
 Membership Trends
2500
18 St. John's Lutheran, Northfield Congregation Numbers 1988 to 2009

Baptized Members
2000
1965 1948 1960 1981
1894
1834 1859 1852 1814
1858
1812 18231836
1799
1738 1745
1704 1725 1725 1695
1659
1620
1500 1526 1498 1506 1523 1522 15331546
1452 1427 1420 1446 1449 1471
1393 1406
1358 1357 1362 1353 1343 1359 1376 Confirmed Membership

1000

831 # Households
809 778 792
767 772 763 767 750 771
737 730 727 734 729 721 721 710 738 738 723
685

543 576 554

512 517 526 542 512
500 487 489 504 502 499 475 483 495 508
449 459 434 425 405
285
Avg. sunday Attendance
254 251 283
211 216 226 234 234 219 240 223 223 209 207 215
194 200 195 191 187 186
Avg. Sunday School Aged (grades 3-8)
0
Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
 Membership Trends
19

 Have not actively managed „active‟ vs. „inactive‟ membership.

 Overall Membership has grown on books since 1988

 Baptized by 132 to 1,836 in 2009
 Confirmed by 188 to 1,546 in 2009

 Northfield Population has grown 5,000

 Participation (measured by Sunday attendance)

 In 1988: 543
 Peaked: 576 in 2002
 Low:405 in 2009
 Congregational Comparisons
20

Members Regular
Baptized Worship Attendance Regular Giving/ Operating Total Debt

Membership 1990 2001 2008 Giving Worshiper Expenses Benevolence Payments

St. John's 1,836 489 542 425 $ 899,500 $1,918 $648,761 $121,797 $163,332

St. Peter 1,527 300 400 400 $ 444,903 $1,112 $430,579 $94,648 $20,149

Bethel 1,048 226 441 490 $ 709,937 $1,449 $573,175 $115,804 $65,880

Minnesota Peer Average (4) 1,645 366 422 414 $ 626,803 $1,584 $519,448 $70,413 $108,149

National Cohort Average (3) 1,207 379 387 372 $ 704,729 $1,925 $555,631 $83,044 $152,359

* Unless Noted: All information from 2008

 Survey Results
21

 412 completed surveys

 Demographics:
 103 Members with Children (18 and under)
 309 Members without Children

 Worship Frequency
 More than once per week 29
 Weekly or nearly every week 298
 6-12 times in the last year 53
 1-5 times in the last year 24
 Not in the last year 8
 Survey Results: Income Levels
22

 $0-30,000 30
 $30,001 to $60,000 111
 $60,001 to $90,000 60
 $90,001 to $120,000 61
 Over $120,000 32
 Prefer not to answer 118
 Survey Results
23

 Would You Recommend St. Johns to a Friend:

 377 Yes
 35 No

 Is St. John‟s in your will?

 28 Yes
 293 No
 91 Prefer not to answer
 Survey Results: Overall Satisfaction
24

NUMBER OF PERCENT OF
SATISFACTION LEVEL RESPONSES RESPONSES

87%
Extremely Satisfied 80 19%
Satisfied to
Extremely
Very Satisfied 206 50%
Satisfied!
Somewhat Satisfied 75 18%

Neutral 16 4%

Somewhat Un-Satisfied 28 7%

Very Un-Satisfied 7 2%

Extremely Un-Satisfied 0 0%
 Program Summary &
25
Staff Time Study
 Works in Progress
 Interim Recommendations:
26
Communications
 Improve and expand communications
 Need multiple delivery communication approach
 Cable; Newsletters; newspaper; radio; email; in-church
communications; facebook, etc.
 Enhance and Improve web site (in-progress)
 Maintain and utilize Email (in-progress)
 Interim Recommendations: Membership
27
and Attendance
 Conducta broad review and adjustment of membership rolls,
database and bylaws (underway: complete by September)

 Develop Active Membership Recruitment /Retention Plan

 Exit interviews
 Personal contact for visitors
 Search out and call on prospective new members.
 Pastors & selected assigned committee members to call and follow
up on members who DO NOT attend worship services on a regular
basis and document reasons.

 Targets:
 Improve worship attendance by 20% (100) in the next 1 year and
40% in next 2 years.
 Interim Recommendations:
28
Congregational Care
 Enhance efforts to personalize congregational care
 Grow our capacity for membership visits to St. Johns members who are
in retirement centers or homebound – in addition to visitation pastor
calls.
 Improve our follow up with families who have lost a family member
within three/six months.
 Identify additional supports to members who have needs.
 Interim Recommendations: Finances
29

 Improve Financial Transparency and Communication

 Add routine updates: weekly bulletin; monthly newsletter;
announcements by Pastor; and other communications.

 Annual Giving
 Continue personal statements for pledge status
 Develop targeted „asks‟ based on interests and participation
 Build „Asking Teams‟
 Advertise and Seek „automatic‟ donations

 Planned Giving
 Need to build a strong planned giving plan
 Target: Increase number of members including St. John‟s in their
wills to 50% by 2015
 Interim Recommendations: Finances
30

 Spending/Debt:
 Defer payment of $25,000 of ELCA benevolence pledge until we
have met our challenge metric for the year (no more than $94,000
of reserves utilized by December 2010). Beginning 2011 reduce
ELCA benevolence by 10% ($5,500) until budget balanced
(subject to review).

 Target: By 2012, the congregation will reduce the percent of total

revenue budgeted for Personnel to 50% (currently 54%).

 Debt Reduction Plan:

 September/October envelope will include option to contribute
directly to debt reduction

 Target: Reduce mortgage payments to below $1 million by Fall

2012
 Interim Recommendations: Program
31

 Increase Focus of Programming

 Complete program review
 Routinely monitor participation (in development: Personnel
Committee and staff)
 Seek out feedback for every program (in development)
 Review other daily tasks that could be done by others.

 Targets;
 Pastors and Staff to review and re-evaluate all programs and
find ways to end 10-15 present programs to give Pastors and
staff time to concentrate on higher priorities or critical areas.
 Next Steps
32

 Hold Focus Groups (July)

 Staff
 Past Members

 Effort to review and focus mission and strategies (July/Aug)

 Review findings from surveys and focus groups
 Engage Congregation in setting direction and priorities

 Complete recommendations and present to Congregation

Council with specific dates, tasks, assignments and metrics.
(September/October):
 Programmatic Plan
 Financial Plan
 Fundraising Plan
 Summary
33

 Concern: Will we be out of money soon?

 Response: Have 4.5 months of cash reserves and have not
utilized any of these reserves yet this year.

 Concern: Missing specific plans. Raise $ or Cut?

 Response: We began our effort in March. We are working
through our plan.

 What is our Plan?

 Research: Who we are, our history, ….
 Roadmap: What are our strategic efforts for congregation
 Hit the Road: Implement
 The End - of Phase I
34
 Setting
Balance Sheetthe Stage
Summary
December 31,
35 Assets May 31, 2010 2009
Cash & Cash Equivalents -- Unrestricted $ 360,559 $ 320,457
Cash & Cash Equivalents -- Restricted 25,000 83,615
Land, Building & Equipment 4,866,760 4,866,760
Other Current Assets 1,618 802
Total Assets $ 5,253,937 $ 5,271,634

Liabilities
Accounts Payable $ 10,729 $ 27,420

Mortgages 1,662,018 1,688,901

Other Current Liabilities 6,326 4,875

Total Liabilities $ 1,679,073 $ 1,721,196

Fund Balance & Property Equity $ 3,574,864 $ 3,550,438

Total Liabilities & Fund Balance $ 5,253,937 $ 5,271,634

 Setting the Stage: Charge
36

Approved by St. John’s Congregation Council April 27, 2010

The Challenge Team in coordination with church staff and appropriate boards and subcommittees, is
charged with the following by the St. John‟s Congregation Council:

1. See that data and information is gathered to help the Congregation and its leadership
understand the “state of the congregation” relative to member needs, participation and interests
by May 31, 2010. COMPLETE
2. Understand and describe the various characteristics of the membership rolls of St. John‟s by April
30, 2010. COMPLETE
3. Develop a strategy for communicating strengths, weaknesses, opportunities and threats of St.
John‟s to the congregation by April 30, 2010. SUMMER/FALL
4. Define and propose strategies for increasing attendance at St. John‟s events, with particular
emphasis on Sunday worship services by May 31, 2010. SUMMER/FALL
5. Define and propose strategies for increasing financial giving from members of the congregation
by May 31, 2010. SUMMER/FALL
6. Provide monthly updates and progress reports to the Congregation Council. IN-PROGRESS
7. Complete work by August 31. 2010 and submit final report and any relevant recommendations to
the Congregational Council by September 30, 2010. IN-PROGRESS
Financial History: Long-Term Debt History 1994-2008

37
DESCRIPTION AMOUNT

Debt balance 12/31/93 $430,000.00

New debt-2003 (building project) $1,974,662.72

Tuck pointing refinancing, 2006 $148,109.79

Total long-term-debt to retire $2,552,772.51

Long-Term debt balance, 12/31/08 $1,744,330.46

Outstanding Debt
Net long-term debt retired , principal (through 2008) $808,442.05 12-31-09
$1,685,000
Debt service recap-

From general fund (1994-2006) $712,530.96

From "GWG“ (Growing with Grace) $231,831.82

From "SOG“ (Stewards of Grace) $776,074.77

Total debt service $1,720,437.55

- Principle, per above ($808,442.05)

- Interest, computed ($911,995.50)

 Congregational Comparisons
38

 Bethel:
 Giving units who actually give: 340
 Average weekly attendance, 2009: 494
 Personnel budget: $499,455
 Percentage of entire budget, 2010: 60%
 FTEs:
 Pastors: 2, FT
 Program staff: Director of children's ministry, .6; Director of youth ministry, 1.0; Director of worship
and music, .75 Administration: church accountant, .5; office administrator, 1.0; parish secretary, .4
Custodial: janitor, .5; set-up, .25

 Emmaus
 Giving units who actually give: 225
 Average weekly attendance, 2009: 450
 Personnel budget: $290,000
 Percentage of entire budget, 2010: 49.2%
 FTEs:
 Pastor: 1 FT
 Program staff: student ministries, 1.0; worship, 1.0 Administration: office management, 1.0.
Financial History: Long-Term Debt History 1994-2009

39
DESCRIPTION AMOUNT

Debt balance 12/31/93 $430,000

New debt-2003 (building project) $1,974,662

Tuck pointing refinancing, 2006 $148,109

Total long-term-debt to retire $2,552,772

Long-Term debt balance, 12/31/09 $1,685,000

Net long-term debt retired , principal (through 2009) $867,772

Debt service recap- Through 2008

From general fund (1994-2006) $712,530

From "GWG“ (Growing with Grace) $231,831

From "SOG“ (Stewards of Grace) $776,074

Total debt service $1,720,437

- Principle, per above ($808,442)

- Interest, computed ($911,995)