Strategic Thinking for 21st Century Churches: Part 1

By Raul Rivera

It was 1957 and thirteen-year-old Bobby Fischer faced chess master and U.S. Open Champion Donald Byrne in what has become known as the "game of the century."  When Byrne threatened Fischer's queen, the young chess prodigy made a move that stunned the world of chess by sacrificing her.  Byrne took the queen only to discover a few moves later that Fisher's pieces were perfectly aligned; each with the ability to strike the opponent but also to protect each other.  Move after move resulted in the capture of many of Byrne's pieces. Checkmate!  A new champion was revealed that day because of strategy.

Why churches do not create legal strategies

Legal strategy has always been looked at as an "Oh by the way" or as a "necessary inconvenience worthy of only grudging thought."  Yet scripturally, it has always been through the legal side that churches suffered the most loss.  Every prophet in the Old Testament that was persecuted suffered it in the arms of government and legal proceedings.  Jesus Himself was brought before the court of the Sanhedrin and Pilate to be judged. Yet with such a great number of legal battles that have taken place throughout history, it is a bit of a surprise that churches today spend little to no time preparing a comprehensive legal strategy to face the times and seasons we live in today.  I want to take the next several weeks to discuss some strategies that every church needs to consider.  Today I will introduce all four of them and then give some details to strategy #1. 

Strategy #1: Create a for profit arm that has the same religious protections as a church.

Strategy #2:  Create a holdings company that protects the church's assets in the event of a lawsuit.

Strategy #3:  Create an outreach arm that qualifies to receive both private and public funding so that it may engage in good works.

Strategy #4:  Take a second look at the church's corporate papers, including 501(c)(3), and establish a public record that protects from today's hostile legislative culture.

Strategy #1: a for profit arm that has the same religious protections as a church

It is likely that the dream in your heart is much bigger than the finances of the church can support.  What if your church created a for profit stock corporation that is owned and operated by the church and then used it to start a business that generates real income to the church?  Many churches across America are beginning to do this and are realizing that the marketplace is another way in which the church can continue to gain influence in society.  Not only does a for profit arm create an income stream for the church, it also gives an opportunity for the church to participate in places usually foreign to churches.  In the New Testament, Jesus entered the marketplace and used it as an opportunity to heal the sick (Mark 6:56).  Most churches have no place in the marketplace.  Yet, the marketplace is where most people spend the majority of their time.  Today is the day to begin to strategize adding a for profit arm to your church.  This topic is covered with much greater detail at our Ultimate Church Structure Conference.  I encourage you to register and attend.

How to do it?

While the formation of a for profit arm is a much deeper discussion than this article can provide, below are two important steps to follow when setting it up.

1.     Begin to set aside a portion of the church's tithes and offerings to be used later for the purposes of investing in the for profit arm.

2.     Create the for profit corporation with language that will make it a closely held corporation of the church.  By doing so, the corporation can establish its 1^st amendment right to the free exercise of its religious beliefs.  Therefore, the corporation may use the same rules to hire and fire as the church and to limit its services to only those activities that do not violate its faith.  This is an important strategy because many churches would never be able to participate in the marketplace if its closely held for profit arm had to engage in government rules that forced it to violate its faith and doctrines.  In a 2012 federal court case in the District of Columbia, the court ruled that when the beliefs of a closely held corporation and its owners are inseparable, the corporation should be deemed the alter ego of its owners for religious purposes. In such circumstances, courts must consider the rights of the owners as the basis for the free exercise claim brought by the corporation" (TYNDALE HOUSE PUBLISHERS, INC. v. KATHLEEN SEBELIUS, SECRETARY ) OF THE UNITED STATES ) DEPARTMENT OF HEALTH AND ) HUMAN SERVICES, et al.).

Trusting God

I get encouraged when I see the number of churches that have implemented this strategy.  They are leaving behind dry wells and are trusting God to be their portion as the Levites did with their pasture lands when they entered the Promise Land.  Many people in the church world may criticize this strategy as a distraction from the call.  Others may say that the church is only to focus on preaching and teaching, and stay out of making money.  To them it appears that you are sacrificing the queen, but you know better.