How COVID Can Activate Billions for the Kingdom
Article originally hosted and shared with permission by The Christian Economic Forum, a global network of leaders who join together to collaborate and introduce strategic ideas for the spread of God’s economic principles and the goodness of Jesus Christ. This article was from a collection of White Papers compiled for attendees of the CEF Global Event.
Covid has been a difficult time for people around the world, a time of trial and difficulty. We honor those who passed away and wonder what the world looks like next. Would it surprise you if I were to tell you that a lasting effect of Covid can be that a significant number of churches and charities around the world are wealthier, doing more work, and asking for less funding—to the tune of billions of dollars? Would you think I was crazy? Hopeful? Confused?
If you are at CEF and reading this paper, you are already aware of the massive changes happening in the workforce—flexible work/work from home, virtual meetings, less travel, and increased freelancing. You are also probably aware that Covid has dramatically sped up the adoption of these practices on a large scale. Former companies that would have been famous for “face time” requirements just 18 months ago—accounting, law, hard charging businesses—are moving to models that require as little as two days a week in the office, or even none. In many cases, excellent employees have literally moved from the city they were in during Covid. In a battle for highly skilled talent as the economy around the world starts to recover, employers don’t have the liberty to fire and move on to the next employee.
Let us focus on this one statistic that says a lot: Only 12% of knowledge workers want to return to full-time office work. 12%. The world, simply put, is different.
At the same time, charities are hurting. The American Cancer Society expects revenue from its main fundraising event to decrease 45% from a previous goal of $151 million. Two-thirds of churches in the US report giving declines (and one would expect the actual number to be much greater). 10% of UK charities are facing bankruptcy. Add to this the fact that global churches are possibly hurting even more, as many highly paid expatriates return home, many never to return. 42,000 New Zealand citizens returned home from abroad during Covid, for example. 200,000 expatriates left Oman during Covid.
What is the missing link that connects the title of this paper to these trends and these unfortunate facts? Simple: Real estate. Assets. Talents (in the original sense).
On the one hand, we have charities with significant assets (I am using charities generally to include churches, and this paper focuses on those holding significant assets). These assets are most often real estate of some sort—the land of the charity itself and its office/building, but it could also be an undeveloped parcel or even a large piece of farmland. The leaders of this charity are doing this job to serve others, to demonstrate the gospel, and to show love. It is a constant battle and stressor to have to raise funds from donors that do not like funding “overhead/admin expenses,” which is almost a dirty word in this space. But they need this funding to survive, to pay their bills, and to fulfill their mission. They are doing good, literally, and there should be a way to ensure that they are sufficiently funded, freeing them to focus on their mission.
We have a second factor which is that the world has changed. Many employees are working from home—thus, office needs are down significantly. Meetings are often held over Zoom, not in the conference room that the management debated on the color of for two months. Retreat centers, and to an extent large worship halls, are so passe, so 2019.
And now the third factor: For many charities, donations are down, but need is up. The economy may again show a divided recovery, where one section thrives while another struggles. A lack of human connection means a lack of attending church—and a lack of charitable functions and hearing stories from personal connections that often drive the core giving for a charity. There is, at the very least, incredible uncertainty in the air, even for those relatively unscathed. While many charities flail, the financial and real estate markets are on a record tear. Real estate prices seem to be going through the roof, and no one is certain whether there is an end in sight in the near-to-medium term.
The solution that I propose is simple: Charities and churches around the world should look at the assets (the biblical “talents”) that they do have and utilize this incredibly unique time to structure their assets (most often real estate) in a manner that supports and emboldens the mission of the charity.
The American Bible Society sold their New York office for $300 million in 2015. Of course, not every charity is sitting on that kind of an asset base. But many charities have property obtained 100 years ago, or even 40 years ago, when the local property markets looked dramatically different than today. Cities have exhaled, moving people to the suburbs, and inhaled again, driving city pricing to record highs. Real estate developments globally have increased in value, regardless of the location, and formerly developing countries have significant growth and development with corresponding price increases.
If one was to lead your charity in an asset assessment, the process in general looks like:
Assess your assets
Define your mission and the ways you can implement it
Examine options for your assets that further your mission
Implement plan
See your impact go up and the stress of the management team go down
A common misconception is that the only option is to sell a piece of property, but that is far from the truth. At Lighthouse, we use our Mission/Impact assessment framework to walk a charity work through not only the asset assessment itself but also which option actually enhances its mission. It is not just about freeing up capital, it is about securing your future, in a way that furthers your goals at the same time.
Example 1: A church in a high rent city, with a lack of affordable housing and decreasing church attendance, may build affordable housing directly behind the church, providing for potential new church members as well as significant repetitive income streams while also providing affordable housing in the community. This model is being rolled out at a large scale in Canada.
Example 2: A church in the heart of Silicon Valley with skyrocketing land values, residents who are disconnected from each other (ironically), and dramatically falling church attendance chose to sell their property and use the proceeds to purchase several houses. These houses, in turn, house multi-year, committed professionals, who as program interns live for free in return for significant leadership at a local church. The interns serve local churches of the same denomination, increasing the skills available at a dramatically reduced price. This decision has increased the strength of the churches that were left in that denomination, rather than each church continuing to limp along. This model has been done in San Francisco.
There are at least eight other options for how to utilize real estate assets, with combinations amongst the options. The concepts are simple at their core, but running the assessment and managing the process well (maximizing the talents) requires a trusted advisor, as most charity CEOs did not get into their role because they wanted to do real estate assessment.
Many charity leaders are or will struggle to raise funds, even though they are doing excellent work. Even if they are not in difficult financial straits, their need for real estate will have just undergone a seismic shift. Those factors, combined with a blazing hot real estate market, make now the time to look at your talents and see how they can be maximized in order to maximize your impact.
At Lighthouse, we specialize in working with charity leaders who know that they want to move from untapped potential and uncertainty to the better way of sustainable income and increased reach. We are excited about helping leaders of global charities secure their financial futures and maximize their mission. We have transactional experience in over 25 different countries and marry strategic, legal, and real estate insights; we would love to provide a free assessment to any charity leader who reaches out.