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Going public

When the American Bible Society fired Doug Birdsall, years of troubles suddenly came into the public spotlight. Will this great American institution thrive again?

Going public

The American Bible Society building in New York (Yoon Kim)

Handout

Doug Birdsall

As the introductory essay for this issue points out, the American Bible Society (ABS) is one of American Christianity’s grand old institutions. Founded in 1816, it has helped finance hundreds of Bible translations and has a 45,000-volume collection of Bibles, the largest outside the Vatican. Those Bibles, numerous offices and meeting rooms, and the Museum of Biblical Art share space in the Society’s 12-story building at Columbus Circle by New York City’s Central Park.

Because of its good work, faithful men and women had given ABS enormous sums of money—so much that the organization had assets totaling $693 million in 2007. But signs of difficulty have emerged. From 2002 through 2011 ABS overspent its budget by $250 million. ABS has had four presidents in the past decade and is now looking for a fifth. The ABS building needs by 2016 at least $20 million to bring it up to New York building code standards.

Some of the problems trace their roots to the hiring of Paul Irwin as president in 2005. Irwin, a United Methodist minister, got the job despite evidence of misuse of funds while he was CEO of the Humane Society of the United States from 1975 to 2004. Some questioned his ABS spending, including $5 million paid a fundraising outfit, Exciting New Technologies (ENT), whose founder/leader had specialized in working with internet pornography and online gambling companies. (Irwin’s son was ENT’s director of business development.)

The ABS board tried to fix that problem by firing Irwin in 2008. I recently met in the ABS building with Geoffrey Morin, the organization’s senior vice president, and Morin said ABS is an organization on its way back. He said during the Paul Irwin era “we were badly aligned” and acknowledged that the ABS board, which at one point had swelled to 72 members, had become unwieldy—but today the board has just 19 members and a different leadership structure.

The question ABS has to answer is similar to the one thrown at American Christians in 2013 generally: Have you lost your way, or—after going through a rough patch—are you on your way back? ABS shows new signs of life. It has taken a lead role in the Every Tribe Every Nation project, an ambitious project to bring new Bible translations to unreached people groups. Morin says ABS is fine-tuning its approach: “When I came to the Bible Society, one of the ways we measured our effectiveness was in how many tons of Bibles we shipped. Today we are much more focused on engagement and transformation.”

But large problems remain. The organization watchdog MinistryWatch.com found that in 2012, 30 percent of the ABS budget was spent on fundraising, “an amazing five times the average fundraising cost ratio of ministries covered in the MinistryWatch.com database.” Another watchdog, CharityNavigator, gives the ministry an overall three out of four stars, but only two out of four for financial efficiency, and MinistryWatch gives it only one star out of five.

Staff compensation also raises eyebrows, totaling $29 million for its 220 employees in 2011. That’s an average compensation of about $130,000 per employee, with at least 10 senior staffers making more than $200,000 per year. By contrast, grants to other organizations such as foreign Bible societies—a primary way the ABS facilitates Bible distribution—came to less than $8 million. Some of the outsized compensation packages can be blamed on ABS’s New York City location, but certainly not all: Only about 85 of the organization’s 220 employees work from New York. About 75 work from a facility in Valley Forge, Pa., and the rest work remotely from locations around the country.

The ABS board’s attempt to find new leadership for 2013 misfired. Early in the year, new CEO Doug Birdsall brought impeccable evangelical credentials and a reputation for moving fast and for revitalizing large organizations. He began his career as a missionary to Japan in 1980, became a ministry president in 1991, and in 2004 became executive chairman of the Lausanne Committee for World Evangelization, responsible for a series of global evangelism conferences that began in 1974. Birdsall’s work culminated in a 2010 conference in Cape Town, South Africa, that helped to revitalize the Lausanne Movement.

Birdsall at ABS quickly examined the decaying ABS building and decided he wanted more than added fire escapes and exits: In April he told a meeting of influential leaders about his plans for a $300 million center for Manhattan’s growing evangelical church. Those present included New York City pastors Tim Keller and Jason Harris, best-selling author Eric Metaxas, and billionaire Dallas developer Bob Rowling, whose TRT Holdings owns the Omni Hotel chain. On a speaker phone were Redeemer Seminary Chancellor Skip Ryan and financial strategists Bob Doll and David Young.

Birdsall proposed replacing the 12-story ABS building with a 30-story one that would include an Omni Hotel, ABS expansion space, and room for special events and other ministries to work. Rowling, a long-time Birdsall friend, soon committed to finance the deal, and Metaxas loved the idea. He is a long-time New Yorker and admits that the project was “very close to my heart … because of the influence New York has in the world.”

Birdsall moved forward on other fronts. He went through an informal process of grading ABS board members with an A, B, or C. Board members who received an A were, in Birdsall’s opinion, in a position to lead and mentor others. Board members with a B were those who could be excellent contributors but who had areas in need of development. Those with a C should not have their terms renewed. Birdsall placed about a third of the board members in each category.

When board chairman Pieter Dearolf learned of Birdsall’s assessment process and his plans for the building, he saw it as insubordination. The board fired Birdsall in October. On Nov. 5, 11 prominent Christian leaders, including Keller and others who had been at the April meeting, signed an unusual letter saying the firing left them “perplexed and grieved.” Metaxas told me it was “gigantically disheartening.”

ABS leaders visited their critics, including MinistryWatch.com head Rusty Leonard, and told them, according to Leonard, that Birdsall “was not a good fit with the ABS culture.” Leonard said, “Perhaps Doug was not the right guy” for ABS, but “when you hire and fire a guy within a [short] period, there’s a good chance something is wrong with your decision-making process.” Morin told me ABS would have to “earn back the trust” of many evangelicals who did not understand the Birdsall firing.

The clock is ticking. If ABS does not get an extension from the city of New York, it must plan and execute more than $20 million in renovations in the next 24 months. It has to hire a new president. It’s not clear whether the plan to create a $300 million ministry center is dead. Rowling, the Omni owner who could finance Birdsall’s plan, would not tell me whether he’s still in the picture. Morin said, “We have been carefully exploring how to best leverage our New York City location for a number of years.”

Part of the culture clash between Birdsall and the board may have come because ABS, largely by design, is not evangelical per se, but broadly ecumenical. Since Birdsall’s firing, board chair Dearolf has had to step aside because of health concerns, and the acting board chair, Nick Athens, is Roman Catholic. “We have Catholics, mainline Protestants, and evangelicals on our board,” Morin said. “That’s always been a part of who we are.” But former board member Wellington Chui said such diversity often made it hard to make decisions: “We did not all have the same mindset.”

Chui, who also serves on the board of Taylor University, is rooting for ABS: “It has taken steps to reinvigorate itself. The board is a more manageable size. My prayer is for healing so the work of the gospel can go on.”

Warren Cole Smith

Warren Cole Smith

Warren is vice president of mission advancement for The Chuck Colson Center for Christian Worldview and the host of WORLD Radio’s Listening In. Follow Warren on Twitter @WarrenColeSmith.

Comments

  • slufi
    Posted: Mon, 04/11/2016 04:02 pm

    Ministry Watch,It looks like ABS may soon be learning from Wycliffe's fundraising successes based on the announcement here: http://www.worldmag.com/2014/01/american_bible_society_names_new_president

  • slufi
    Posted: Mon, 04/11/2016 04:02 pm

    Ministry Watch,Thanks for the thoughtful replies.

  • Joe M
    Posted: Mon, 04/11/2016 04:02 pm

    I wonder, what was Birdsall's salary? I'b be surprised if it was under $200,000.  For being president of a BIBLE society. I can't be the only one that thinks there is a problem there. All these well-funded para-chruch organization need to be rethought with an eye to forsaking the huge budgets they currently enjoy. Ministries? Um, try lobbies, and lucrative ones at that. Why does ABS want or need an NYC address. Plain absurd. No matter his much Keller and Metexas huff and puff.

  • MinistryWatch
    Posted: Mon, 04/11/2016 04:02 pm

    Slufi - While World should not have used the word "budget" when talking about ABS's fundraising costs, I believe the message they conveyed that ABS's fundraising costs are very, very high was nevertheless completely accurate. So World was technically wrong as you point out in the way they characterized the ratio, but the reader is no worse for that deficiency.I am not sure World made a misstatement regarding the losses ABS has incurred in recent years. They expressed an opinion on the losses, which the author found alarming. Anytime a ministry loses $250 million over a period of years, I believe it is fair for an outside observer to be alarmed by that. Some outside observers, on the other hand, may even believe ABS should maintain its huge endowment and not spend it down. At MinistryWatch.com we prefer ministries to avoid building big endowments in the first place and put donations to work as fast as possible after receiving them. So we "like" the losses ABS was seeing more recently, at least to the extent these were related to a decision to be more aggressive in spending its endowment. But that probably accounted for no more than $100 million of the $250 million in losses. Much of the rest was tied to swings in the valuation of the endowment's investments. So it is reasonable for World to question ABS's losses as mismanagement since the board and management are responsible for the returns on the endowment and those losses accounted for the majority of the $250 million deficit World cited. As a result, I don't think World needs to clarify misstatements or correct sloppy data. I believe World expressed a valid opinion on accurately reported facts regarding the large losses and your take on it is also a valid opinion.       I agree the seemingly non-urgent and impersonal task of translating, printing and distributing scripture is a difficult one to raise money for. Yet Wycliffe raises more than three times that of ABS and Biblica combined at almost one-third the cost. Now, Wycliffe's fundraising costs are still twice the average ministry's, reflecting your concern. But ABS and Biblica might be able to learn something from Wycliffe about how to more efficiently raise money to carry out the task the Lord has given them. To its credit, Wycliffe also seems to be slowly spending down its endowment, which is less than one-fourth the size of ABS's.   

  • Gimpy
    Posted: Mon, 04/11/2016 04:02 pm

    "when you hire and fire a guy within a [short] period, there's a good chance something is wrong with your decision-making process"Yeah, it seems like the real story here is the dysfunctional board: first they picked a known con man to be president and then later on replaced him with a Jack Welch wanna-be. The old "rank-them-and-yank-them" approach is ruthless when done to subordinates but trying it on people who hired and have the power to fire you is just, well, kind of dumb.

  • slufi
    Posted: Mon, 04/11/2016 04:02 pm

    Perhaps Ministry Watch could do an analysis of distinct fundraising challenges that Bible translation and distribution organizations face. I notice in your database that Biblica and Wycliffe, similar organizations, also rank poorly. Could it be that the nature of the work being done is simply more difficult to raise money for than more "flashy" or immediately personal ministries like child sponsorship or hurricane relief? My church has amazing fundraising ratios because of the nature of the ministry - we spend virtually nothing on fundraising - but we also aren't trying to employ high quality academics to do work that few people understand and many in the English speaking world can barely appreciate. If there are actually better techniques than these organizations are using, Ministry Watch could do the Christian community a significant service by identifying those areas of increased efficiency.

  • slufi
    Posted: Mon, 04/11/2016 04:02 pm

    Ministry Watch,I appreciate the clarification, but my concern with the article still stands. The article didn't claim to report on fundraising efficiency as compared to funds raised - it specifically claimed (citing Ministry Watch) that 30% of the *budget* was spent on fundraising. This is simply not true. Obviously, pointing out the error of this statement is not the same as asserting that fundraising efficiency is good or bad. The discussion of how best to measure financial management for non-profits is a complex topic that many in the field debate. Dan Pallota, for example, would suggest that far more money is brought to address issues of mission if efficiency is less of an issue than net revenue to the organization. Personally, I would tend more toward a balanced view of efficiency and net revenue. Fundraising efficiency may be a fair critique of ABS, but that criticism should be made with truthful, accurate information.I am sorry it seemed that I felt Ministry Watch was responsible for the statement "ABS overspent its budget by $250 million." I was intending to contrast this statement with your organizations assertion that this was positive. It seemed odd to me that World would quote your analysis on fundraising efficiency then contradict your analysis when it comes spending down the endowment. As you note in your comment, ABS is making strides to improve in many ways, and to imply otherwise with sloppy data is troubling. Hopefully World will clarify these misstatements to better serve their readers with accurate data and clearer analysis.

  • MinistryWatch
    Posted: Mon, 04/11/2016 04:02 pm

    Slufi - I believe I can easily restore your confidence in MinistryWatch.com. The 30% figure we refer to is the ratio of fundraising costs to contributions. This is the appropriate way to measure the efficiency of ABS's fundraising efforts. At 30% it is five times as much as the average ministry in our database. You compared ABS's fundraising costs to its total spending. We provide that ratio as well at MinistryWatch.com in the Financial Ratios section of ABS's profile, but it is a far less effective measure of fundraising efficiency as it can so easily be distorted by odd spending patterns. That is what has happened in ABS's case. Even so, at 14%, ABS is still spending almost three times as much as the average ministry on fundraising even if you value the expense based ratio versus more than the generally accepted method of measuring fundraising efficiency. As you consider this, I think you will see you were looking at the fundraising numbers in the wrong way.  Also, if you compare ABS's total fundraising costs and overhead expenses to total income (not just contributions, although the two numbers are very similar in 2012 due to a $10 million loss on the investment portfolio), the ratio is 45%, not 20%. By comparing to total expenses, rather than revenues which is the norm, you allow ABS's overspending due to drawing down its endowment to distort your understanding of the situation. Because of ABS's massive endowment, it is something of a unique case, so looking at the ratios versus expenses has some value. But it is not the normal way of analyzing a ministry's finances.It is true the ministry is spending a lot more than it brings in from donors now. It can run large deficits in accomplishing this (depending on the investment returns on the endowment in any given year). But this is only happening because ABS failed to spend the money from earlier donors and built up the big endowment instead. Basically, ABS is effectively spending money now that was given years ago and was held onto instead of being put quickly into good ministry efforts as those earlier donors most likely thought was happening. By running deficits and spending down the endowment to a degree, ABS is correcting a past mistake, which is a good thing. As for me, I would not look at the current overspending as something of a matching gift from the endowment, but everyone can choose to look at that however they like.   The ministry has run large deficits in several years partly due to their effort to spend down some of the endowment and partly as a result of how they account for the value of the endowment. With the wild markets in recent years, the value of the endowment has fluctuated significantly in several years, sometimes causing a huge deficit and other times a big profit. I do not believe I would characterize the $250 million accumulated loss as mismanagement (that was World's characterization, not MinistryWatch.com's) as some of that reflected intentional overspending to reduce the size of the endowment and and some of it was due to their accounting treatment of the market impact on the value of the endowment. Still, World brought up several valid issues about spending at ABS and I am sure ABS will be trying to improve its spending in the future.I hope this helps you understand ABS's numbers better. If not, send thru another comment and we will try to help you work through the admittedly complex ABS financial statements.

  • slufi
    Posted: Mon, 04/11/2016 04:02 pm

    I'm puzzled by the figures being quoted in the article. The IRS 990 for this organization reports just under $12 million in fundraising from July 1, 2011 - June 30, 2012. This is only 14% of the total expenditure of $83 million. Total administrative and fundraising costs are about 20% - certainly not 30% for fundraising expenses.Also of note is that they spent more than $71 million funding programs - $1.49 dollars for every dollar contributed or earned from scripture sales. Those who contribute currently to ABS effectively multiply their ministry dollar due to the significant assets of the organization.The accusations of overspending the budget by $250 million seems odd as well, since MinistryWatch congratulated ABS on spending down some of their assets. Is there evidence that they mismanaged their targeted spending by this much, or is this the impact of economic factors on their total asset holdings? It seems hard to trust MinistryWatch's numbers given the odd assertion of 30% spending on fundraising when IRS data says otherwise.

  • Midwest preacher
    Posted: Mon, 04/11/2016 04:02 pm

    This article was an eye opener.  Surely the larger and more powerful ministries are under attack and while all that is going on they are shooting themselves in the foot.  Perhaps in the future we will all need to simplify.