I believe the term “right sizing” is really under appreciated. The word is attributed to a General Motors’ personnel manager who was trying to come up with a better word than “downsizing” back in the 1980’s. Too bad, because all organizations need to be “right sized” and it doesn’t have anything to do with downsizing.
As organizations grow, they need to embrace the same policies, practices and procedures that other organization of the same size must have in order to avoid financial, personnel and ultimately accountability and integrity issues. All too often, nonprofits tend to believe that because they are mission oriented, they don’t really need to have all of the professional and business practices of for-profit organizations. These professional business practices are actually the keys to long-term success.
Nonprofit organizations and churches get into trouble when they grow in size without paying sufficient attention to implementing the policies, practices and procedures that are commensurate with other organizations of the same size. At the ECFA, we spend much of our time and oversight within the financial realm; we speak often of financial controls. However, human resource practices and the appropriate policies dealing with a nonprofit’s employees are also often underdeveloped in nonprofits especially as they begin to grow and have more personnel, both full and part time.
There has been a lot of media attention paid to the growth of the mega-churches. These churches are now found in all parts of the country. They also tend to be independent and not aligned with a particular denomination. There are also the six television ministries that have been the subject of both government and media inquiry. I’ve had the opportunity to provide some perspective into these inquiries and have expressed the opinion that integrity issues are likely related to this issue of rightsizing. I don’t believe that there is anything inherent about a particular Christian movement or type of ministry that leads to integrity issues but actually the problems are more likely a matter of size and not having a healthy attitude towards professional business practices.
As many ministries grow they are more than likely very personality driven and the founder/leader is likely a very charismatic individual that is able to powerfully propel the ministry forward. These leaders typically are not trained in the professional skills and best practices that need to be embraced in governance, financial accountability, internal controls, and issues of taxes and employee compensation and benefits.
While the vast majority of nonprofits and churches are relatively small (75% of nonprofits have less than $500,000 in annual income according to the IRS and the average church attracts less than 90 adults per weekend according to Barna), organization of size need to right size their policies, practices and procedures to ensure that they are literally “taking care of business”. Organizations that try to run their business via a “seat-of-the-pants” approach are looking for trouble.
