Best practices for families in the business of a church

By Leslie Dashew

Issues that plague secular family businesses are greed, entitlement, jealousy and struggles over power and control. The same is true for churches.

Most people don’t think of churches as family businesses. Yet, as in most fields of endeavor, we find that young people often follow in their parents’ footsteps. Typically, this is the field that they know most about since they grew up around it.

Most famous church family successions of late are the Schullers, the Falwells, and the Grahams (though a ministry, not a congregation). They are not immune to the issues that plague secular family businesses: greed, entitlement, jealousy and struggles over power and control. (See sidebar on the November sale of the Crystal Cathedral by the bankruptcy court.)

So what have we learned about the best practices for family businesses that church leaders might benefit from who have family members in salaried and leadership posts? The following are 12 practices that we have seen help prevent or minimize the destructive conflict.

Shared vision: Have you created a vision for the future of the church that is shared by stakeholders?

How does your family regard its dreams for the family and how it will connect to the church? This statement assures that everyone in the family is headed in the same direction and the statement forms the basis of plans, policies and roles.

Shared values: Have you documented the values that are most important to the family and that are shared? Even when families have different occupations and paths, there are often a core set of values to which all subscribe and can be the guiding principles for decisions that affect the entire family.

Planning: Do you have strategic plans to provide a road map to success to help you reach your vision? Do you have budgets to guide your use of resources that are consistent with your plans?

This relates to what the family wants and what other stakeholders think are critical to the future of the institution.

Communication: Have you created a family council or had a series of family meetings to explore your vision and values and to develop a set of family polices (and/or a constitution)? Are you comfortable about discussing the undiscussables? Have you created a forum (like the council) to talk about the difficult subjects that must be addressed in families that own businesses and develop the skills to do so? This forum is important to assure that family members feel they have a safe environment to discuss difficult subjects, often in areas where family members have differences.

Without this “safe haven” families become fragmented since they feel they can’t discuss differences.
Performance management: Do you have clear roles and job descriptions for everyone working in the business? Does each person understand the tasks for which he or she is accountable and the extent to which he or she can make decisions on their own? Is every employee given feedback on a regular, structured basis so that they know what they do well and where they can stand improvement? Is that documented?

Have you developed, written down and shared a family employment policy so that all family members (and key employees) understand how family members may be considered for employment? Do you have a policy on compensation that assures that everyone receives “fair market value” for their work?

Governance: Do you have documents describing the ownership of the assets of the church with clear description of the roles, rights and responsibilities of owners (e.g. shareholder agreements)? Do shareholders have a regular time and place to learn about what is happening in the business and to share their goals and concerns? Have you read or do you understand the current governance documents of the church? Do they clearly set out the expected course of action in the event of a change in leadership?

Churches, by law, are not owned–but issues of ownership and leadership can be similar. Perhaps your church’s governance documents designate an automatic successor (similar to the common “President” and “Vice President.”)

Another option is to create a committee of individuals who would come together and search for a successor. For example, your church could amend its governing documents to provide for a selection committee that would collect information on interested applicants and present the best suited applicants to the board or congregation.

There is no right or wrong answer; whatever plan fits the dynamic of your church is the best one for your church.

Catastrophe planning: Do you have a plan for who would direct the church if the leader died suddenly and documents that are readily accessible to help that person deal with the legal, financial and operation challenges in that crisis? Have you shared the plan with key people so that they will be prepared to implement it at that time (spouse, other church executives, etc.)

Succession planning: Have you considered what type of leadership will help achieve the long-term vision for the church and who might be prepared to be a successor to the current church leader? A frequent mistake is to look to someone just like the incumbent or a relative. It is important to start with the goal for the future and look at who has the competencies to help achieve that.

Estate planning/insurance: In the event of a death in the leadership, does your organization know and understand who owns the deceased leader’s intellectual property? Can your church still use a pastor’s sermons and teaching material after his death or must the church obtain a license from his beneficiaries before being able to do so?

On another note, does your church have key man insurance on its primary leader? Could your church survive the death or permanent disability of this individual, or would it need a cushion to survive on while it recoups?

Building trust: Have you identified points of distrust, explored what is contributing to the distrust and what can be done to repair those relationships? Are you working to keep trust by honoring each other? Distrust undermines family and church relationships and can be something that is difficult to address: especially if distrust in the leader has developed.

Advisors: Do you have advisors who are challenging your thinking and proactively bringing your attention to issues that will protect you, your family and your business? Do your advisors talk to each other to be sure that they are coordinating their efforts on your behalf?

Independent directors: Do you have a board of directors or trustees to help you work “on the business of the church” rather than “in the business” with independent perspectives that come from outside the family and the church? It is difficult to find people who are connected to the church and yet independent.

If you want to be sure that you are seeing issues that could destroy the family or the church, it is important to engage and empower independent overseers who will “tell the emperor that he isn’t wearing any clothes.”

While not every one of these 12 practices may apply to your situation, the key is to be sure that you are using the best practices of organizational leadership and stewardship no matter what the connection is between your family and your church.

Leslie Dashew is the president of the Human Side of Enterprise LLC, Scottsdale, AZ, and a partner in the Aspen Family Business Group LLC. She is the co-author of the new book The Keys to Family Business Success.


Uncertain future

A bankruptcy judge awarded the sale of the Crystal Cathedral in late November to the Roman Catholic Diocese of Orange in a move that will require the church to vacate the cathedral within three years. The Catholic church will refashion the iconic cathedral for use by its own parishioners.

The Associated Press reported that “the Crystal Cathedral’s troubles run far deeper than the loss of the campus and stem from (Robert H.) Schuller’s retirement, an ill-fated attempt to hand over the ministry to his son (Robert Anthony), and the church’s failure to adapt to attract younger worshippers.” Members of the family had feuded for nearly four years over the future direction of the congregation.

The diocese’s offer was for $57.5 million for the 40-acre campus. The cathedral leadership was still holding out hope for God’s “intentional delaying” for an intervention that would stop the sale to the diocese.


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