Connect Ltd FAQs
Thanks for taking the time to be part of our Connect legacy. I believe this conversation is one of the most important we could have, with outcomes that could transform our community!
Below you will find a list of all the questions from our discussions so far about establishing a company arm of Connect. We have broken these questions into Missional, Admin and Concern categories. Some of these questions were asked directly, others were inferred or drawn out of conversations. It is not an exhaustive list, and there may well be more questions to answer, or raised from the answers below. If you still have questions, please feel free to make a submission at the end of this form.
Arohanui,
Pastor Shanan
Missional Questions - Why?
Are we best to support existing agencies in these areas, or start our own? We see this as a both/and rather than an either/or question. Connect has always been passionate about partnerships. We already have great relationships with several schools, the Ministry of Education, REAP and the Marlborough District Council, and a number of local counsellors, to name a few. These partnerships are built on synergy, with common goals and mutual benefits. As we’ve put our toe in the water, we have already build positive relationships with Arohanui Tiny Homes, the Marlborough Sustainable Housing Trust and the Marlborough District Council who are all trying to address similar problems, and have something to offer us in assistance, and something to gain from us as we work together.
Unless it is profitable – what is the point? Our intention has always been to run the company with a positive cashflow. The two main criteria for the company would be to provide for ministry needs in our community, while also raising income for further ministry opportunities. In it’s early stages, as with most long-term investments, there will be little to no profit as funds are reinvested back into the projects they come from, but the difference these projects will make will have immediate profits of a different kind. Transformed lives are the greatest currency in the Kingdom of God, as this is the “profit” that we are the most interested in.
Our ultimate goal is to get more people to church, how does this help? I guess that depends on whether we view this as our ultimate goal or not, or more importantly, whether God sees this as our ultimate goal. The Church is called to be salt and light in the world, to make disciples, and to care for the least, the lost and the last. We are not called only to sow where there is a benefit for us, and in fact Jesus seems to describe the most pure worship as that which doesn’t stand to benefit us. I think Jesus calls us to action when we see suffering in our community, regardless of the response. However, Maslow’s hierarchy of needs shows us that physiological needs and safety needs to precedence in a person’s life over issues like Esteem and Purpose. It’s hard to think about your eternity when you can’t think beyond the simple needs of today. By addressing these needs, we help people to get into a better place where they can consider the greater questions of their creation and creator, and our other services through the Church and Trust can help with this.
What is the mission/purpose behind this idea? Our Vision as Connect is to be a Church that reaches UP, IN and OUT – in our relationship with God, our relationships with each other, and our relationship with the community. Right now, we have two major vehicles for recognising this vision, Connect Chuch, and Connect Marlborough Trust. The Church is responsible primarily for Spiritual Formation – Worship, Discipleship, Fellowship and Equipping believers for the mission of God. Connecting People with Jesus Daily. The Trust is the vehicle for the church to enrich our community. Creating spaces where people can come to get physically, mentally and spiritually well. These spaces are motivated by our faith in Jesus, and sprinkled with encounters with His name and His people. However, we recognise that a third area exists that we are not actively impacting, and for those that find themselves in that place, they are often cut off from the community that they live in, and unable to meaningfully engage with the programmes or people mentioned above. These people are fighting a daily battle for sustainable shelter, employment, safety and basic individual or family resources. When you are fighting for these daily essentials, it’s hard to form meaningful relationships, both because of the energy required to build and maintain these connections, and the ostracization from community by failure to fit social and economic norms. The Church and the Trust have some ability to work in this space, but we believe there is an opportunity to engage more effectively in this space through a third vehicle, a charitable company. The company would be mainly focused three areas, housing, employment and education. By focusing on these areas, we have an opportunity to address the foundational needs with an often overlooked percentage of our community, and give them a hand up into the greater purpose for their lives. By working in partnership with our existing Church and Trust, we have an opportunity to provide opportunities for all stages of our community
How do we protect a balance between growing our assets and using them? Stewardship is a major theme of scripture, whether that’s our gifts, our bodies, our lives, or our property and possessions. More often than not, stewardship in the bible is talked about in the context of people not taking risks, rather than making too many. Consider the parable of the talents, the Israelites building bigger barns, or the sermon on the mount when Jesus talks about not “storing up” treasures on earth. A significant catalyst for this conversation is that the leadership feels we are burying our opportunity in the ground, and not stewarding our assets as well as we could or should as people of God. We also have a responsibility to make sure that we are not careless with what we have, and this is why we want to create a company that ensures that wise heads are making wise decisions on our behalf.
Is this what our church is for? The answer to that question is both Yes, and No. We believe that The Church is called to make a difference in the community it’s in. The Church has a call to evangelism and to benevolence, generosity and philanthropy. Often times these roles can end up in tension with each other as the church divides its resources or time among them. Some members of the church become passionate about evangelism at the expense of benevolence, while others become fixated on social welfare at the expense of evangelism. We want to be a church that embodies both of these, as we see in the example of Jesus. We believe by establishing a charitable company, both of these arms will be strengthened, as the church becomes freed up for spiritual formation and evangelism, and the company provides opportunities for social change, without compromising one for the other.
Admin Questions - How will it work?
How does a charitable company work? A charitable company operates just like any other company – it can own property, employ people, pay dividends and has limited liability which means that in most situations individuals cannot be held liable for the debts or financial losses of the company. Where a charitable company differs is it is registered as a charity with the Charities Commission and has been established for charitable purposes. As such it is not required to pay income tax on its profits.
What’s the difference between the church to doing this instead of a charitable company? There are two differences: •First, the charitable company will be able to access central government funding to assist with its charitable work whereas the church cannot. This is because central government agencies when considering funding applications are required to consider the financial status of the organization and their governing entity which for the church is the Baptist Union of New Zealand. This therefore precludes the church from accessing funds which would be essential to finance social housing and other significant charitable ventures. •Secondly, operating as a company limits any liability to the company which as we venture into commercial and social enterprises will become increasingly important. Operating as the church currently is, puts the Baptist Union of NZ and potentially the senior leadership liable personally.
How do tithes and offerings work under these proposed changes? People can still continue to make their tithes and offerings to the church as before. The church will still have operating costs such as staff wages and ministry expenses that need to be met. As all three entities are or will be registered charities donations can be made to any of them and will be eligible for a donation tax rebate.
Can we afford it? In short - yes. There are initial legal costs and some ongoing compliance costs however these will be offset by the income earning potential and greater flexibility the structure provides to leverage the existing assets. As the make up of the church and the economic climate has changed over the last seven years so has our sources of income and we have leveraged our assets to bring in rental income. As our financial context continues to change it is both wise and prudent to consider how else we change fully utilize the resources God has entrusted us with to fulfill His mission. The question that may be more important to ask is – can we afford not to?
Will there be a return on any properties purchased? It would be important to ensure that any properties purchased play a part in fulfilling the long term strategic plan of the company. The overall mission of the company will be to build the asset base, create a sustainable income stream and leverage assets to provide a triple win – benefit for the community, benefit for the church and bring glory to Jesus. Some properties/business ventures will provide a positive cashflow to finance this, others may provide more of a social support aspect or a mix of the two. Each purchase or investment would need to considered in the context of the wider mission and long term cashflow management plan.
Who will be on the board? The Senior Leadership of the church would be able to appoint and remove Directors. It is imperative that the Board is made of a mix of people with the right skill sets to manage the assets and create and implement a long term investment strategy. It is also necessary to ensure that Board members share a strong belief in the vision and purpose and that the Board remains closely aligned with the mission of the church and the Baptist Union. Board members would be selected on this basis.
Who will the company be accountable to and how will this be enforced? Like any other company the company is subject to the legal requirements of the Companies Act and the Charities Commission. In terms of other accountability the shares of the company will be held by the Baptist Union of NZ as a bare trustee acting for the purposes of Connect as the named beneficiary. This is very similar to how our property is currently held in conjunction with the Baptist Union. A Memorandum of Understanding will also be written setting out the expectations of both Connect and the company and will clarify the objectives, vision, relationship and responsibilities of each. It may include communication or approval required from the church for the acquisition or disposal of property over a set threshold or transactions that exceed a set threshold.
What are our assets? Our assets are our land and buildings at 8 Beaver Rd. These have a capital value of $2,190,000. There is a mortgage held against this property of $250,000.
How will we ensure everything is legal and ethical? We will engage expert legal advice, the guidance of the Baptist Union of NZ and ensure an open and transparent consultation process.
What “experts” are we consulting in this process? Specifically, the experts we have consulted so far are Steven Moe from Parry Field Lawyers in Christchurch. He has a passion to see churches thrive in this area and is a regular speaker at the Christian Savings Bank conferences. He has also worked closely with the Baptist Union previously to assist Oxford Terrace Baptist Church set up their social housing entities and Karori Baptist Church transfer their assets into a charitable company. Wayne Schache Operations and Finance Director of the Baptist Union has been involved in discussions and if the set up of a charitable company is approved by the congregation and Council we will work closely with Wayne during the documentation and set up phase. Tim Jacombs, Pastor at Karori Baptist Church has also been contacted as someone who has led a church through a similar process. Tim has a Masters in Theology and is also working towards gaining his Masters in Property Practice and so brings not just experience but a very well rounded and practical perspective. Locally, and specifically in regard to social housing, we have met with several members of the Sustainable Housing Trust and Marlborough District Council staff members.
How will this overlap with the existing church and trust governance and structures? The church, trust and company will all have the same overall mission to achieve Kingdom purposes, actively being engaged with supporting the Marlborough community and creating places where people can come to get well physically, mentally, emotionally and spiritually. While all three entities will do this to some degree they will each have a specific area of focus - the church will focus on ministries, mission and discipleship, the trust on providing programs and support to our community and opportunities for church members to be actively involved in the providing of practical assistance to the community, and the company role will be to be a good steward of the church’s resources, to grow them and create sustainable income streams for these purposes. Each will have its own governing body - the church is overseen by the Eldership, the Trust by a board of Trustees and the company will be governed by a Board of Directors. To ensure continued alignment between the three entities the Senior Leadership of the church will have the power to appoint or remove both Trustees of the Trust and Directors of the Company. Where it is practicably possible there will be a Senior Leadership representative on both the Board of Trustees and Board of Directors.
Does this initiative have the support of local/central government? Connect Marlborough Trust has received a lot of support from local government and in our most recent discussions with key Marlborough District Council staff they mentioned that their main concern for the Marlborough community is the lack of housing. Setting up the charitable company would allow us to step into the social housing space. It is also a nationwide problem and central government has indicated that it is a core concern to them too. Central government is making funding available to entities like this charitable company to be able to meet these needs. Local examples are the Methodist Mission and Sustainable Housing Trust who have received significant amounts of money from central government to help alleviate these issues.
What are the financial implications if it fails? If approved the land and buildings of the church will be transferred to the company. This will be recorded as an unsecured debt owed by the company to the church. Within the memorandum of understanding between the church and company it is suggested that there is a clause that allows the church to exercise its discretion to either forgive that debt or request its repayment, subject to the financial capacity of the company. This essentially gives the church control over the assets if the company is deemed unsuccessful (however this is defined). It is important to note that if failure in this situation is defined as having insufficient income to meet the current liabilities then irrespective of whether the assets are held by a company or the church the options that would need to be considered are either downsizing and moving to a smaller property or refinancing.
Concern Questions - What if?
Will Christian people be running the charitable company? How will the church maintain “control” of where things go? How will the company remain God focused? These questions all speak to a similar and valid concern. Mission drift is a real problem for many well intentioned organisations, and Christian organisations have been no exception in this. Many organisations that were founded with Christian values and beliefs are now completely removed from the church, even some that retain their Christian name. We want to ensure that this doesn’t happen to us. I would also add that we want to be careful not to be so cautious that we miss God opportunities in our region. The key to preventing mission drift is strong governance, clear policies and open communication. To that end, here are a couple of early thoughts that we think hold an even keel. Connect Ltd will be directly attached and interwoven with Connect Church and Connect Marlborough Trust. The Church, Trust and Company would be what is known as an interlocking directorate, in which one or more board members would be involved in the governance/management of each entity. In addition to this, the Connect Board of Elders could hold authority to appoint or unappoint a board member of Connect Ltd for any reason, as they currently can with Connect Marlborough Trust. I think that limiting the board of directors to only Christians could harm our mission. Firstly, it is arrogant to assume that we have all of the answers, and secondly I have seen many people come to faith by being invited to participate in the work before they had their beliefs figured out. I think that a policy that gives a percentage, or a number of board members who must be Christian and Connect Affiliated is wise to protect the board from being overtaken, as well as clear policies about synergy and boundaries. Of course, the company belongs to the church, and our members will get the final say in the structure that gives them confidence of remaining on course.
Is this a “mega-church” attitude? I’m unsure what the exact definition of a mega-church attitude is, but I think I can make some safe assumptions. Selfish Ambition, Profit over People, and Power hungry, are attitudes that we want to avoid, and good governance, good policies and Christian culture are an important part of this. These same processes will protect us from having a “small-church” mindset as well, where we don’t dream, or take risks, and expect big things from God. This delicate balance must be maintained with regular evaluation, robust leadership and honest conversations. Who are we doing this for? What are our true motivations? Who benefits from the work we do and by how much? The purpose of the company is to benefit the community primarily, the church secondarily, and God ultimately. This order or things gives us a foundation to build on and a goal to work continually towards as we take faith steps for God in this area.
Where to from here?
Connect will hold another members meeting in September (Dates TBC) to receive feedback from our people and discern what next steps we take from here. If you still have unanswered questions, feel free to make a submission below, or follow one of the other links for more information.