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Stop Putting Out Fires

Contribution by Deborah Ike, President and Founder of Velocity Ministry Management

Of course, I’m not talking about actual fires (go ahead and put those out).  I’m referring to those proverbial fires where you’re running from one crisis to the next.  That’s what I see happening all too often with churches and their events.  Every ministry department wants to host several events throughout the year (often “planned” a few weeks instead of a few months ahead of time) PLUS the church as a whole hosts events as well.  All of this activity results in exhausted staff, frustrated volunteers, less-than-optimal events, and a congregation overwhelmed by so many event announcements.

Here’s what I often see:

  • The 1-2 weeks before an event, it’s all-hands-on-deck with nearly every other task dropped so all staff members can focus on last minute details for an event
  • No one knows all of the events coming up for the next 12 months
  • Facilities team members are often caught by surprise with requests for room setup and support
  • No single individual has a full understanding of how event plans are coming along or what’s supposed to happen the day of the event
  • Volunteers are frustrated with a lack of clear direction, training, or communication from staff
  • There are a lot of event planning meetings happening but rarely are firm decisions made or actions taken after those meetings
  • There’s a last-minute rush to try and get enough event volunteers
  • The staff barely finishes one event and already has to scramble to work on the next one…that’s coming up in a couple of weeks

Let’s stop the madness, folks. 

There’s a much easier, less stressful, and a more strategic way to host events at your church.  It involves planning ahead, thinking through what’s best (not just what’s good), and being disciplined in your approach.  It’s a bit like eating nutritious food and exercising.  Neither is super exciting but both result in more energy and better health.

If this problem sounds a bit too familiar, join us for the Proactive Event Planning Webinar on October 25th.  I’ll outline a proven process for planning events – one that will help you plan more impactful and less stressful events for your church.  Click here to reserve your spot today.

I’m looking forward to equipping you with a practical, straightforward process that can yield incredible results for your church.

Your Church Has Been Offered a Facility…Now What?

I was privileged to recently sit with Dr. Thom Rainer and talk about a significant and growing topic…the “adoption” of a used facility.

Dr. Rainer, Jonathan Howe and I discussed facility management and why a free building could be the most expensive building your church has.

Some highlights from this episode include:

  • Total annual operational costs of your church building should run between $5.50-$7.00 per square foot.
  • Does your church facility speak the same language that your church culture speaks?
  • Never accept a free facility without a facility assessment to determine how much it’s really going to cost you.
  • Does your church truly have a grasp on how much your facility costs to run?

Listen to the entire podcast HERE.

Where’s My Money!

Let’s face it, you are more than likely asked to accomplish a great deal with minimal resources, especially funding. I wish it was different, but it is a reality in the church facility world. Another reality is that as technology improves, and the Internet of Things continues to expand, leveraging technology to gain savings is a real way to do more for less…eventually.

Unfortunately for us, to leverage the long-term savings on emerging technology will generally require an upfront investment. In that investment, those figures can be a hard pill to swallow. Consider an average facility that wants to install 20 WIFI stats and integrate them with their scheduler…that project cost could easily be around $6500. For a facility looking at saving money, how do you justify the investment?

That is where learning how to calculate a return on investment (ROI) is critical for every facility steward. The concept is simple, but the execution is difficult. In general terms, a ROI will give you a qualified estimate as to how long your investment will be paid off through (typically) operational savings. Every moment after that point would then be considered savings (or newly available dollars for other areas).

A simple ROI formula is [(Gain from Investment-Cost of Investment)/ Cost of Investment]. Because it gives you a percentage, it is easy to compare returns from different investments. For us, we are trying to justify an investment by providing an estimated time it achieves a return of 0 (meaning we have saved enough to pay back project cost). Once it is paid back, theoretically it is now additional income (or rather reduced operating expenditures).

So, how would we approach it as a facility steward? Energy Star states that with simple energy efficiency measures, facilities can achieve 2-10% savings annually on their costs. More aggressive programs can achieve up to 60% savings. I recommend that you are conservative with your target and use a reduction potential of 18%. If you are serious about saving money, 18% is easily attained.

How about a practical example. Remember the church from above, a project cost of $6500 to invest in connected stats. Let’s say their monthly utility bill is $7000. (I know, for many of you that number would be awesome). If they could achieve an 18% per month reduction in utility bills ($7000x .18 =$1260), they could save $1260 a month. Taking the project cost divided by the savings ($6500/$1260= 5.2) tells us that in a bit over five months the ROI is at 0%. Every month after the five-month point the church has $1200 that can be invested elsewhere. The counter-point to the example is this: for every month that you do not invest, you are spending $1200 you shouldn’t have to. In 12 months if you do the investment, you gain approximately $8400, if you do not you spend an extra $14,400.

This is very simplistic in presentation, but this method is easy to understand and reproduce. If you want to start getting deeper, then for ROI’s in energy savings you can start getting in to KwH difference and so forth. The facility steward should always include an ROI when presenting or asking others to approve an efficiency project. The ROI is a critical part of an effective decision-making process. By leveraging emerging technology to improve efficiency, it is an actual investment into the facility. The “sticker shock” that comes with many of these types of projects needs a tempering figure.

When you have taken the time to evaluate the ROI on total project completion, then you can also consider ways to spread the project out. Many times, companies will let you purchase in stages to spread out the cost if you will commit to a total order. It draws out the time to achieve 0%, but it can make it easier to get approved.

Bottom line, calculating an ROI informs both you and those you present the project to where the money is, and how to get it back from the facility and into other ministry areas. If you want some more info, or help putting one together, let us know in the forum, we are here for you.

I Have a Confession About Caulk

We have all heard the saying, “The Cobbler’s Children Have No Shoes”. We chuckle at this…as we cannot imagine that if we were a Cobbler that we would not provide shoes for our kids.

There are lots of variations on this old proverb…but I have a new one-

The Facility Stewardship Guy Has No Caulk (or at least forgot to use it)!

I am embarrassed.

No joke…I have talked about how caulk is only good for a year in almost every workshop I have done in the past 10 years. I have guilt-ed my audiences and readers to the fact that if they are not caulking…or at least inspecting the caulk…on an annual basis that we not properly stewarding what God entrusted to us. I have sat with Dr. Thom Rainer and told him how we did a regression analysis on the use (or lack thereof) of caulk and the long-term impact on facilities if you don’t caulk.

Well…I noticed that some of my siding was not straight on my porch…so I got up on a ladder to inspect…and peeked behind the siding…and what did I see…ROT!!! Yep…the area in question had been built (I use that word loosely) prior to us buying the house…and it is 10-12 feet in the air…so I never got up to look at it in the 21 years we have lived here.

Upon inspection, guess what I found.  That’s right… NO CAULK – EVER.

So…I am living what I have preached…but not in the proactive way (the good stewardship way).  We are now replacing the siding, the plywood, and wet insulation.  Check this pic out:

So…let’s do a quick cost analysis:

  1. If I had caulked the windows at the top “J” molding of the siding every year…for 21 years…I would have spent about $252. (3 tubes of caulk at $4/tube X 21 years)
  2. Instead, I am spending $3,400 for repairs and other upkeep.

That is 14 times as much. This reinforces what we have said before, that the cost to address deferred maintenance is many times more than properly addressing the facility in an intentional and proactive way.

Lesson Learned!

 
 

5 Abuses of Church Property Insurance

Since early in establishing Cool Solutions Group, I have had a number of beliefs and convictions around how we insure our church facilities and why insurers do not “appear” to be more interested in the condition of the facilities they insure. Still don’t get that.

When you couple that with the fact that I have been watching the intersection of Facility Stewardship to Financial Stewardship to Personal Integrity to “Doing What is Right” as it relates to church property/facility insurance claims, I have been both bothered and concerned.  I have seen things that really bother me from both sides of the insurance “table”, and not just a little.

Let me share with you 5 abuses I have witnessed and why I think they need to be addressed:

  1. Pray for a Hail Storm – I have seen this first hand more than once.  A church does not plan for the inevitable cost of roof maintenance and replacement and start praying for a hail storm.  That is just wrong! Why should any company (insurance or not) pay for your lack of planning for the inevitable cost of roof maintenance and replacement? To take this a step further, I do not understand why church insurance continues to increase the value of church facilities when they are incurring more and more deferred maintenance that actually decreases the value. This really perplexes me (I told you I have concerns on both sides of the table). Can you imagine the outcry of churches whose coverage is reduced based on deferred maintenance or lack of maintenance? On the flip side, can you imagine what elation there would be to have little to no premium increases for churches that could empirically prove they were maintaining their facilities?  I would LOVE to see that. That would be true Facility Stewardship!
  2. The insurance company has lots of money – Aren’t you glad they do?!?!  I know I am glad Allstate does when we have a claim at the house. If they did not, how would claims get paid?  But here is the real fallacy with that line of thinking.  Where did that money come from?  Right…premiums. And who pays the premiums?  Right…all the churches (or people) they insure.  So when the insurance company pays a claim, the likelihood of all their other church clients premiums increasing is high. This is as much a Kingdom issue as it is insurance…maybe more. Talk about Financial Stewardship.
  3. We Won The Lottery  – “We just had a major insurance event…NEW SHOES FOR EVERYONE!” Insurance is bought in order to have coverage to repair/replace content and facilities that were directly impacted by the insurance event. It is not a “get out of jail free” card or a license to spend or the golden egg to offset a deficit in your budget. Yet, far too often the mindset of church leaders and staff is not aligned with the real reason for the claim dollars.  Think of it this way…if the insurance event had not occurred, what then?
  4. Pushed to the limit – We have insurance limits in the policy…let’s max them out. If there is a limit for contents or extra expenses or the like, are we not entitled to use ALL of it. Answer = NO.  In fact, not just no, but…
  5. 10 and 10 –  This one is an abuse that the insurance companies have allowed for too long. The term “10 and 10” is a construction industry term for 10% profit and 10% overhead. That means you take the raw cost of material and labor, then add 10% for overhead and 10% for profit…and you allow the general contractor to include their “General Conditions” cost of the superintendent, project manager, etc, the contractor is likely to walk away with 25-30% of the claim. Let me drill this down.  Say you have a $2 Million claim and you allow the contractor to charge 10/10 and general conditions…that could be $500,000 and a nail is not even driven.  In contrast, take that same project value for new construction, the current going rates we see are 6-8% plus general conditions…which equates to only about 15-17%. That is a potential swing of over $200,000. Now, I am not suggesting that the church get that money (refer back to #3 above), but it should reduce the amount of the claim the insurance company pays out…which saves them money…but…as indicated above in #2…it ultimately saves all the insured churches money in the form of less premium increases. NOTE:  The “10 and 10” issue I have is not with the small sub-contractor, but rather with larger claims where a bonafide General Contractor has to be engaged.

So…I realize that the above may not make me popular with many churches and even some insurance companies.  I am OK with that…because Facility Stewardship…coupled with Financial Stewardship are not just a good idea, but spiritual tenets.

Who Rebuilt The Roof?

I have a wondering mind. I like to do mental gymnastics and ask myself “what if”.  I sit and think about some of the most obscure things at times.  I will watch a movie or TV show and contemplate the back story…but even more about the “after-story”.  You know…what happened next?  Did they survive?  Did they end up getting married?  How long did it take the war hero to recover from his wounds and what kind of physical therapy was needed?

Weird…I know.  Welcome to the inside of my mind.

Let me share one of these mental excursions that I recently ventured on.  Most of you are familiar with the Luke 5 story about how Jesus forgave and healed a paralyzed man (starting around vs. 17).  This story starts with a description about some men who brought a paralyzed man, on a mat, to see Jesus.  When they were not able to get the man close enough to Jesus…they got creative.  They climbed on the roof (obviously not an OSHA approved endeavor), removed the roof tiles and lowered the man right down in front of Jesus.  Then Jesus heals him…forgives his sins…and sends him on his way.

What an amazing miracle!  We all rejoice and the people that day (except for the Pharisees) were amazed and praised God.

However…wondering minds contemplate the details that are not written in the gospels.  What about X, Y and Z…for instance:

  1. How large was the hole in the roof? – if we assume a 5’10” man with some clearance, then the hole may have been 6′ by 3′.  That is 18 square feet.
  2. Were there only “tiles” on the roof or did the roof have a substrate (a substance or layer that underlies something) or any other structure(s) that had to be removed?
  3. How long was the rope or other lowering apparatus?
  4. Where did they get the rope?  I’m sure they didn’t make a run to Home Depot.
  5. Had the friends of the man planned all of these details out ahead of time?

While all of that is interesting fodder, the real question that I ponder is…Who Repaired the Roof?

There is no account of how the roof was restored to its functional form.  The man was jumping and praising God…but what about this gaping hole in the roof?  Did the friends just leave the hole for the property owner to repair?  Did the friends ask Jesus to perform another miracle that day and fix the roof?  Did the friends tell the healed man it was his responsibility since he was the one that benefited?  Had they already entered into a contract with the local roofing company?

Here is what I think.  I believe (I have no proof to back this up) that the friends went back and repaired the roof.  Any friends that were selfless enough to carry their buddy on a mat…up to a roof…cut a hole…and lower him down, sound like honorable men.  I believe honorable people like this would have gone back and repaired the roof.  They would have taken responsibility for the physical condition of the place of ministry that day.  They would have stepped up and done what was right.

Do you see any correlation between this story and Facility Stewardship?  The roof did not heal the man.  The house did not forgive his sins.  The house was a TOOL to facilitate ministry and life transformation.  I have preached that for years…but you also must care for the TOOL.  It is tremendous to see the creativity of people using this TOOL to introduce people to Jesus.  The TOOL played a role in this story…in fact, it was a pretty important part…but…it then needed to be restored to be used again on another day as a TOOL.

Facilities are only a tool.

Facilities cannot save or heal you.

But…facilities can be the tool that can make or break a spiritual connection.  Can you imagine how this story might have been different if there was not a house with a roof?  The paralyzed man may never have met Christ.

 

The Never Ending Product – Forever Beta

The world is changing from a “product” based goods/service market to a subscription based model.  This trend has been growing exponentially since the mid 2000’s.  In 2018, there are very few things you can not obtain and use from a subscription:

  1. Caterpillar (heavy construction equipment) now offers a service that shifts the discussion from “Products” to “Outcomes” based on the amount of dirt you want to move
  2. Cadillac, Hyundai, Porsche and Volvo all offer subscription programs for a car (This is not a lease)
  3. Stitch Fix – Clothing
  4. Graze – Snack food subscription
  5. My Royal Canin – Dog supplies
  6. Amazon Prime – enough said!
  7. Husqvarna – now offers battery powered tools in Europe on a subscription model
  8. Kanye West – First subscription album, “The Life of Pablo” sold billions of subscriptions
  9. Zipcar- to book the USE of a car and the ownership
  10. The New York Times – now generates more revenue from subscriptions than ads
  11. On and on and on…

The one industry that is most obvious is software.  The majority of what we consume in the form of software (remember your “apps” are just software) is done through a subscription.  But that transition was not as seamless or easy as you might think looking back.  In fact, it took more than a model change…it was a massive philosophical shift.

In his latest book “Subscribed”, Tien Tzuo reminds us of the huge shift the market had to make from obtaining software via a perpetual license and the age of a CD loading on your computer to the current age where most software is subscription based…especially with the age of Cloud computing and SaaS based applications.  Prime examples of this shift includes household names such as Adobe, Microsoft, Symantec and IBM.  Part of this shift is not just to avoid producing a “product” but rather that IT buyers prefer an OPEX vs. CAPEX.  In layman’s terms, organizations…including churches and not-for-profit firms…prefer an “operational expense” (i.e. subscription) in lieu of a “capital expense” (i.e. physical assets whether software or equipment).

As the subscription really started to take off, the term “beta” became common in the industry.  This basically means your software was “almost ready” and they wanted clients to test drive it for final tweaks.  Then, once the input was evaluated and implemented, the software was considered DONE!

That is changing as well!

On page 134 of Subscriber, Tzou conveys a story about Google and how for over 5 years their logo had the word BETA included.  Google received a great deal of pressure from enterprise prospects and Fortune 500 companies that the word BETA was a roadblock for those who wanted to invest in a “beta” product.  So in 2009, Google released a blog post saying it was removing the word from the logo. How ever, what is hilarious, is the last line in the 2009 release:

One more thing – for those who still like the look of “beta”, we’ve made it easy to re-enable the beta label for Gmail from the Labs tab under setting.

Google basically was saying that this little 4 letter word…means NOTHING to them.  This was the birth of the “never-ending product.”  Google and most other growing SaaS based products follow that…never-ending development…never-ending enhancements…never-ending improvements…never-ending listening to clients and prospects needs…always improving and never arriving mindset.

We too, at Cool Solutions Group and eSPACE adhere to this methodology.  We will never “arrive” or be complete with development.  There will always be more that can and should be done to assist organizations in being EFFICIENT, EFFECTIVE and INTENTIONAL with the facilities they are entrusted to steward.

Forever BETA!

The Pain of Change

When our team ventured into the world of church software nearly 10 years ago, we had an almost debilitating revelation. We did not see this one coming:

THE PAIN OF CHANGE! (or maybe better said – the PERCEIVED pain of change)

We assumed (and we all know what that means) that if you had a better solution, people would flock to it. WOW…were we wrong. In fact, we have seen that in many cases, it has taken years for a church to make the shift from an antiquated scheduling software to a system that works better and is usually LESS MONEY.

Or worse…still thinking that paper, pencil and post-it notes are an efficient way to mange a facility when a more intentional application was available for as little as $1.67 per day.

But that is exactly what we found.  10 years later, I am still scratching my head.

There is an adage that says – Change happens when the pain of staying the same is greater than the pain of change.”

So…what is the tipping point for you and your organization?  When is the pain of “staying the same” greater than the pain of change?

My guess is the pain of change is not nearly as painful as you may think.

What Batman Might Say About HVAC Integration

As we shared prior, we believe that the World of Integration is here to stay…especially in the realm of major facility systems, like HVAC.

eSPACE and Cool Solutions Group released its COOLSPACE HVAC Integration over 8 years ago.  At that time, the only option was for churches that had a JACE.  Then we developed integration with several brands of thermostats.

But do you know what?  Those 2 applications only represented a portion of church HVAC controls systems.  Our team has scratched its proverbial head for many years trying to break that nut.  We thought we had it figured out with the new JACE J8000.  It could do what we wanted…but the price point was in the $7-10,000 range.  That seems unreasonable for a simple “handshake” from one system to another. HOLY SMOKES BATMAN!

We then thought we had hit pay dirt with the Lynx Springs Edge 534…but alas…the driver written for the JACE would not work in this device.  CURSES…FOILED AGAIN!

Well, we are pleased to announce that our team, in partnership with North Building Technologies has developed a solution that not only works…but is cost effective! We have developed a “controller” to link the eSPACE Event Scheduler and pull the schedules from the eSPACE API and convert the data to usable BACnet/LON/Modbus schedule objects for occupancy.   BOOM! POW! BAM!

“Everything’s impossible until somebody does it.” – Batman

Well…we DID IT!

Now, if you have a system that can accept BACnet objects, LON or Modbus, eSPACE (and the 13 other ChMS event schedulers) can communicate with your HVAC system and assist with increasing energy and operational efficiency. You do not need a JACE (but if you have one, that is cool too).  You do not have to spend $10,000.  For a fraction of that, you can integrate your HVAC and Event Scheduler!

KA-BOOM!

The Least Expensive Time to Own a Church Facility

Over the years, I have been asked when the least expensive time to “build” a church facility…and 9 times out of 10, the answer is TODAY. The only exceptions to this have been when there was a recession like in 2008-2010.

Today, I want us to change the question and shift if from when to BUILD a facility to the least expensive time to OWN a church facility.

Strangely enough…the answer is nearly the same. The answer to the latter may not be “today” but it is definitely the day you finish construction and move in. Does that sound counter intuitive? Do you think I’ve completely lost it (you may be right in general, but not on this point)?

We have laid this out several times in the past in articles and blogs…but I am concerned that many church leaders still do not grasp this. Because our firm works on both the BUILD and OWN (what we call Sustain) spectrum, we see the miscalculations of church leaders that fail to plan for the long-term costs to operate their shiny new facility…as well as the nearly devastating results of churches that have been in their facilities for years with little to no planning for the inevitable.

Let me see if I can offer a simple example:

  1. Cost of new building = $4 Million (about 20,000 SF)
  2. First-year utilities – about $25,000 ($1.25/SF – the acceptable range for a church is $1.00 -$1.50/SF)
  3. First-year Janitorial, cleaning and paper products – $35,000 ($1.75/SF…which is the low side of average…but hey, the building is new)
  4. First year General Maintenance…you know…light bulbs, touch up paint, HVAC maintenance, clogged toilets, broken glass, etc – $40,000 – $2.00/SF…which is less than the national average of $2.50 – $3.50…but again, I am being gracious because the building is new.
  5. First-year Lawn/Grounds – $25,000 (assuming 5 developed acres)
  6. First-year Capital Reserve Contribution – $30,000 (the recommended range is $1-3/SF annually…so I picked middle ground)

TOTAL COST TO OWN THE BUILDING AFTER 12 MONTHS = $4,155,000.00.

That is a 4% increase over the initial cost to build.  So, let’s assume a 2 % inflation from year 1 to year 2, which makes the cost to operate the second year $158,100. So now, at the end of 24 months, my $4M building, costs $4,313,100 to own…which is about 8% above the initial cost to build.  And that does NOT even include the cost of:

  1. Interest on a mortgage
  2. Insurance
  3. Telephone
  4. Internet
  5. Security
  6. IT infrastructure
  7. Facility Management…the PROACTIVE part…not the nail driver/mop-slinger.

I am sure that some of you are saying, “why do we need a capital reserve account starting in year one?” There are several reasons:

  1. If you don’t get into the habit of doing it early, you are less likely to EVER do it.
  2. Systematic saving is done over a long period of time which means you need less incrementally as you have a long time to grow the funds.
  3. You WILL replace all HVAC…all the carpet…all the paving…all the roofing…etc. These are inevitable.  It is not a question of IF you will replace them, but rather WHEN and HOW MUCH. Just think of the big-ticket items such as:
    • HVAC – This size facility will have 110-120 tons of HVAC at a current value of $275 – 300,000. You will need money in 15-20 years to pay for new… at an inflation ration of 2+% a year, you will need $350-$400,000.
    • If you have 20,000 SF of flat roof, the value today is about $160-200,000 and it will need to be replaced in 15-20 years…at an inflated value…this could be $210-280,000.
    • If 50% of your facility has carpet at a value of $4.00/SF today, ($40,000) that will need to be replaced in 7-12 years at an inflated value.

Need I continue?

It costs more money to own and operate a church facility than to just build it.  Be Intentional.