Monday, March 16, 2015

$25 million Georgia Baptist Convention debt bailout

Georgia Baptists got out of the hospital business some while back, sold the assets to one of the big hospital corporations, and put the money in a foundation which gives grants that support health care needs in Georgia. The initial amount was $125 million. The fund was severely depleted by the economic meltdown in 2008 but total assets were back to about $160 million, meaning that there was a mountain of money that insiders gazed longingly upon and that a few Georgia Baptists were going make decisions about.

It's easily the biggest pot of money around connected to Georgia Baptists. Various significant grants have been made annually to a variety of causes including pregnancy care centers, medical and dental clinics, counseling services and others. This year's grants totaled $3,256,924.

Last week it the Georgia Baptist Health Care Ministry Foundation announced their largest grant ever when they said the Foundation would pay off the $25 million building debt for the Georgia Baptist Convention headquarters building in Duluth. That single item is larger than the sum of all the grants given by the Foundation for the past seven years.

The Christian Index report on the grant is here.

The Foundation has offices in the building and, presumably, Foundation officers and trustees would pass grim-faced GBC leaders and employees in the hallways who understand the burden of a large debt.

Smiling and happy faces abound these days.

I understand money and debt. On a very small scale my last church had a debt wiped out through the sale of a donated property that brought considerably more than expected. I smiled more in church hallways after that.

The $43 million GBC building is a sparkling monument to the halcyon days and optimistic late 20th Century Southern Baptist thinking. It has been a burden. It could not be 'unbuilt' and the large debt loomed over every budget discussion. Even though the GBC had a plan to pay off the massive debt in a time of declining Cooperative Program support, the future looked arduous. The Foundation was the only entity with the sums to fix this. They fixed it. I rejoice with my GBC colleagues in their relief.

It's above my pay grade (actually, my Georgia Baptist pay grade is zero at the moment) to plumb the depths of this massive bailout, but I'll make a few observations:

  • The grant was made and praised as a route to revival in the state. I appreciate the well-intentioned reading of such things but I doubt the route to revival is through retiring building debt. The GBC will be able to devote more funds to matters that actually reach souls and start churches with the money saved from debt service. This year's budget shows $2.15 million in debt service. We have budgeted more money to pay debt than to plant churches. 
  • How will the GBC spend the money now budgeted and spent on debt service? Will we increase our support of the SBC portion of the Cooperative Program? The GBC keeps sixty cents of every CP dollar in state. Will it be considered that the seminaries and our two mission boards deserve more of the CP dollar?
  • Will the GBC create some staff positions put more people on the payroll with the extra money? I appreciate my Georgia Baptist colleagues, but it's tough for this Georgia Baptist to see much of a connection between how many people occupy the Georgia Baptist Building and church health and growth.  
  • Earlier offers by GBC leaders to sell the building and move to more modest office accommodations are, presumably, off the table. In a time when a vision for the future is not centralized staff and programming, where should be be spending our money for maximum return? We have a nice centralized HQ building, a testament to the turn of the century vision of baby boomer GBC leadership. What now?
  • It is a considerable stretch to explain paying off debt for an administrative building as support for health care needs. I get the indirect connection. Presumably, lawyers have already signed off on using Foundation assets for this purpose. 
  • Praise be to the Federal Reserve System whose easy money policy enable the stock market to soar and funds like the GBHCM Foundation to profit with considerable unearned growth. Dare I say that President Obama is indirectly responsible for paying off our building debt?
  • Make no mistake about it. The $25 million that goes to lenders to pay off the GBC debt is $25 million that will never be available to earn income to be spent on health clinics, pregnancy centers, or other causes. We all make opportunity cost decisions. This is the Georgia Baptist Health Care Ministry Foundation's decision. 
  • We sold our hospitals where patients were healed and put a good chunk of the proceeds in a building where staff has offices. You make the call on the propriety of that.
Opinions from Baptists are free and they are ubiquitous. I'll offer my opinion on how the GBC should spend the millions that they don't have to spend on debt service. 


Wyman Richardson said...

Interesting, provocative thoughts. It does give one pause.

Anonymous said...

Unfortunately this is bound to not be the first time that such a "gift" is given. It's hard to imagine the messengers of the GBC having anything further from their mind when they approved the Healthcare Foundation and its work so many years ago.
As noted, only $7 million has been disbursed but many programs and ministries have been started with this money that reach out to our Georgia communities. While the claim in the Index article was that it would not change the disbursements I would imagine that some change will occur. So, now we have a building that will bring revival, while our pregnancy centers, mobile health clinics, and other such centers may find themselves searching for alternate funding in the future.

Michael Kennedy said...

If we were willing to sell the building, why not carry through? If it sells for $45 million then:

1. The GBC Healthcare Foundation can be reimbursed the $25 million. It should be stipulated that this money be used more aggressively for healthcare needs in Georgia (disbursing $7 million is paltry sum when you consider the needs across the state and the money in the foundation).

2. $10 million could be used to secure a new, leaner facility. Or that $10 million could be given to NAMB for church planting and the GBC move into the entire floor offered by NAMB. I'm guessing the utility cost at the current building would be equal to rent and utilities for one floor at NAMB.

3. $10 million could be distributed between the IMB and seminaries (with the IMB receiving the majority of funds and endowed chairs established at the seminaries to specifically train local church pastors).

But, hey, I'm just a lowly GBC pastor...what do I know?

JT Sims said...

You have run out of legitimate criticisms. There are good reasons to be happy about this.

1. Your point that revival is overstated. Good Point.

2. How will the GBC spend the money now budgeted and spent on debt service?--Irrelevant to the debate since Georgia Baptists decide this by voting. Aside from that, the SBC will get a larger percentage. Even if the percentage didn’t change, the dollar increase to the SBC is $10 million over the length of the loan plus 40% of the interest.

3. Will the GBC create some staff positions? --To imply that there is no relationship between “how many people occupy the Georgia Baptist Building and church health and growth” is a big misstatement. The truth is that for the mega-churches in Georgia it has no relationship. For the majority of churches in Georgia, the smaller ones, there is a direct correlation.

4. Sell the building. -- Why presume it is off the table?

5. Administrative building as support for health care needs. -- Good Point.

6. President Obama-- Not only VERY Sarcastic, irrelevant.

7.This is the Georgia Baptist Health Care Ministry Foundation's decision. -- If they could not find ways to spend it on one ministry, at least now, with another ministry, it has a chance at reaching some of the lost.

8. We sold hospitals and put a good chunk of the proceeds in a building where staff has offices.--Sarcasm again. Hospitals have lots of offices.

I am sorry to have to say that most of your points are just not well made.

Unknown said...
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William Thornton said...

Louis, I'm not linking the other blog. It was grossly unfair to a good man, Dr. White.

mackyton said...

Well for my any annual meeting with clients or with my boss, I always book a best convention center where they can get all facilities. I really hope this year I can get an affordable space as my companies budget is not that much good.