The Importance of Black Hats
May 12, 2017
By The Rt. Rev. Kirk S. Smith, Bishop of Arizona
This week, I hope you will allow me to put on my black cowboy hat (mitre?) for a bit. The subject is a bit disheartening, but one which we in the church need to be aware of–Vestry and Bishop Committee responsibilities.
We all know that Vestries and Bishop’s Committees are elected by the parish or mission to represent its members and, along with the clergy, to have oversight over the work of the church.
However, along with oversight comes responsibility. This is especially true of financial responsibility. The Vestry/Bishop’s Committee acts much like the trustees of any other nonprofit body in that they are to make sure the money given to the church by parishioners is spent wisely and responsibly.
Sadly, it has come to my attention that this is not always the case. Right now, there are a few congregations in the diocese that are in serious financial trouble because the Vestry/Bishop’s Committee abdicated their duty to safeguard the assets of the church. No one likes to oppose the wishes of the Rector/Vicar, but there are times when someone in leadership has to ask, “Yes, but how are we to pay for what you want?” A friend of mine, who is a financial consultant to Arizona nonprofits, told me recently, “It’s not just churches who fail to make the hard choices. Trustees are always tempted to take the easy way out. Instead of saying, ‘how can we raise more funds?’, they opt for taking more money out of reserves, usually without any plan to pay it back.” Years of “robbing Peter to pay Paul” can result in there being no Peter left at all!
Let me share an example from my own past experience. A congregation I once served had a multimillion dollar endowment when I was their priest. When I left, the parish seemed to be in good hands with a Vestry made up of professional men and woman, a good segment of them lawyers. Yet over the years, the new Rector insisted on spending down their reserves on projects he felt were important, but were never explained. Rather than question him, the Vestry simply caved in. That Rector left after about 10 years, and the remaining endowment was only a fraction of what it was before. A parish which was once wealthy now struggles to stay open.
So, this is a plea to those who are serving (or whom you elect) to make sure to exercise their fiduciary responsibilities, to ask the hard questions, and sometimes even to say no. That sometimes means being unpopular, and it alway means taking on some hard work, but it is the only way that our churches are going to be financially healthy. Does this mean that governing bodies cannot use reserve funds? Of course not, but when they do, there needs to be a careful strategic plan in place about how those monies are going to be spent (i.e., to help the church grow, not just to cover the deficit), and how they are going to be replaced.
The Standing Committee is looking at ways to assist clergy in charge, treasurers, and Vestries/Bishop’s Committees in exercising financial oversight. In the meantime, if necessary, please call us with any concerns.
That is my “black hat moment” for the week. I hope that it will lead you to speak to your Vestry/Bishop’s Committee members and support them in their important work. Black hats now can protect us against black armbands in the future.