MBC budget, our entities, our legal questions
By David Clippard
MBC Executive Director
April 27, 2004
If memory serves me correctly, I believe I have written only two other columns that spoke to issues regarding the legal questions our Convention is trying to get answered. This all began before I came as your Executive Director. Writing editorial opinions about these legal questions is not a priority for me. Our staff priorities are missions, evangelism, church planting and assisting our 2,000-plus churches grow spiritually to reach their communities for Christ. But I feel the need to offer some perspective with regard to (1) where we have come from, (2) where we are, (3) and the decisions that are just ahead for you.
Where we have come from
When I assumed duties as your Executive Director in September 2002, our Convention was $750,000 in debt and all our reserves (savings accounts) had been spent. In October 2002, we were not even able to make our cash distribution to the Southern Baptist Convention (SBC) Executive Board (which fuels the international and home missions, the six seminaries and other SBC ministries). We were staffed and structured for a $19.2 million budget. The reality of receipts that year was just over $16.2 million in a stagnant economy. It led us to a reduction and realignment of staff and ministry.
In addition to all this, five of our entities had rebelled against their historic relationship with the Missouri Baptist Convention (MBC). We had one small strategic reserve account of money the Annuity Board had given us from stock market earnings years before that was being used to address the legal questions and declaratory judgment filed by the MBC to recover the five breakaway agencies. That account was depleted last year. At the last three consecutive annual meetings, our churches have overwhelmingly voted to “take all actions necessary" to restore these entities to their historic relationship.
We were in pretty tough situations, but in a perfect position for God to show Himself strong!
For years, the MBC has purchased Directors & Officers (D&O) liability insurance coverage, on itself and its institutions. This coverage protects the convention assets from liability in the event of misdeeds by corporate officers or directors (trustees.) Each of the five entities have similar policies, and three of the entities used the same insurer we did, Church Mutual. We believe that, once we recover these five agencies, the legal costs and other damage done by the renegade trustees to their own agencies and to the MBC may be recoverable from the D&O insurance policies.
In order to prevent the five agencies from using up their insurance coverage on fighting us, our Legal Task Force (LTF) intentionally limited our claims in the declaratory judgment action. We did not name any officers or directors in the five agencies and had no reason to suspect they would make claims on their D&O coverage. But they did. We discovered last year that Church Mutual was paying the legal bills for at least three of the rebellious entities while refusing to pay the MBC’s legal bills to defend the countersuits. We believe Church Mutual is acting in bad faith for several reasons. Church Mutual has now filed a lawsuit against all parties, to get a declaration of the policy obligations and we believe they have, for now, ceased payments to the agency lawyers.
What has happened is that we were trying to keep the time and cost to a minimum by using a small strategic initiatives reserve fund. This was “Plan A" to fund the process. At the same time, the entities were using insurance company money – possibly up to 15 million dollars – to fund a legal war chest that permitted them to drag out the process and raise a myriad of procedural barriers. (At the moment the barrier is, “Who has the legal right … ‘standing’ … to represent the 2,000+ churches and 600,000 Missouri Baptists?" The agencies position is that no one has the right to question their actions or hold them accountable.)
When our small fund was exhausted last fall, the Convention’s messengers in their business at the annual meeting created an Agency Restoration Fund. The purpose of this fund is to give individuals and churches the opportunity to help pay the legal defense and restoration of our agencies outside of the MBC budget. If 500 churches and individuals would give $100 to $150 per month to this fund, it would provide all the legal resources we need. This is “plan B." It is a good one.
The long-waged battles for the return of the MBC to its historic conservative theological roots now need “feet" put to the task of finishing this movement. It is time for everyone to be part of the battle. Don’t just say, “We are supportive" … ‘show me.’ I would urge every MBC church to consider in its next business meeting a 24-month commitment to some level of financial support for this Agency Restoration Fund. I heard an old sage say, “Many hands make light work." We already have some who have “stepped up to the plate."
Three Important notes:
1. The LTF anticipates that when the legal questions are finally brought to decision, proceeds from a settlement with our insurance company may likely repay all the expenses we have incurred. We just need to get to the end so we can settle with them. Those proceeds will replenish the strategic initiatives fund. All other contributions made to the Agency Restoration Fund could then be reimbursed and applied to help the restored agencies as well as for missions and church planting.
2. To put the financial issues into perspective, please consider that from 2002 to the present date our total legal costs are about what we would have given to these agencies from our CP budget in just six months. We were giving away $2.2 million a year to the agencies. Over two years, we have paid less than one-fourth of what we would have given to them. The amount we have spent to recover ministry assets worth a quarter of billion dollars is just about one-half of one percent of the asset value. So, in perspective, the amount we are spending is more than reasonable in view of the value of the assets the agencies have wrongfully taken.
3. There is no one that I am aware of that would have chosen to spend even the first dollar on legal issues. It is my understanding that this whole mess was forced upon the MBC when the agency heads and their attorneys resolutely refused to agree to Christian arbitration and thereby left no other recourse than to return to the place it all started – the Secretary of State’s office where the agencies made their charter changes without Convention approval as required.
Where we are now
Praise the Lord, we ended 2002 and 2003 in the black with all bills paid and Cooperative Program gifts continuing to grow. Our designated accounts are all fully funded. Our church planting team is on target to break an all-time record for new church starts for the whole 168-year history of the MBC. Our Evangelism Director, Bob Caldwell, has set a goal of 20,000 baptisms for us. God is good! In the midst of these legal difficulties rest assured that the priority and passion of your MBC Staff is, has been and will continue to be fulfilling the Great Commission. Building and preserving institutions to equip the saints to preach the Gospel to the world is the purpose that drives all of our efforts, including our legal effort to reclaim these MBC institutions for the mission God has given the MBC.
Decisions that are just ahead for you
Your Executive Board on April 13 gave the Staff instruction to put the five entities back into our Cooperative Program Budget. Many have looked forward to this day. This is in anticipation that they will be returning to their historic relationship in 2005. These budget dollars will be given to them for operations needs only upon their return. This is in accord with previous actions taken by the Convention in its annual meetings. In the interim these funds could be used, if needed, to secure their return. This budget proposal will be brought to the convention’s annual meeting by the Executive Board. The Executive Board has set a 2005 budget goal of $16.7 million. It is a very conservative goal and one that we believe will be reached. Another year of encouraging growth in Cooperative Program giving like the last year may prove this goal to be too low. For the first quarter of 2004, we are $251,000 ahead of the identical period last year. This is truly God’s grace.
Dear fellow Warrior of the Cross, I believe the greatest days for our convention are still ahead of us and I believe the greatest churches of our convention are yet to be planted. Pray without ceasing!