Boosting Mission, Saving Money
By G. Jeffrey MacDonald
Space-sharing arrangements with like-minded organizations have been a missional and budgetary boon for Church of the Holy Comforter in Lutherville, Maryland, a suburb close to Baltimore. Leases to a Jewish congregation, three therapists, and a learning camp have closed budgetary deficits and kept the church operating in the black.
Or at least they did until the pandemic hit.
As COVID-19 has disrupted all aspects of church life, space sharing at Episcopal congregations has come under intense stress as well. At Holy Comforter, the Jewish flock that had been paying $30,000 per year for access to a chapel and meeting spaces was suddenly unable to pay even a penny for four months last year. It now pays just one quarter of its prior rent.
“They’re a really struggling community, and we don’t want to be in the position of making someone go under,” said Holy Comforter Rector Christopher Tang. “So we said, ‘Look. You need to pay us last.’ Not the best business decision, but we all believed it was the right thing to do.”
The COVID-19 fallout didn’t end there. Due to pandemic restrictions, the therapists no longer needed office space in a former parsonage that had fallen into disrepair. Active Minds Learning Camp wasn’t able to run its usual programs in the Sunday School rooms and parish hall. In the dog days of summer 2020, a key financial tributary in the form of rental income was running dry.
But new pandemic-driven, space sharing opportunities have emerged to put Holy Comforter back on track for surplus as soon as this year, according to Rector Chris Tang. Active Minds has pivoted from afterschool programming to offering remote learning at Holy Comforter for kids who can’t do school all day at home. Active Minds is now on pace to pay $10,000 more per year to the church than it did in pre-pandemic times.
And where therapists once rented offices in an underutilized home, Holy Comforter is making sure space is no longer languishing. The church now rents the entire Dove House (former parsonage) to Well for the Journey, a wellness center for those who see themselves as spiritual but not religious.
With questions mounting as to the pandemic’s long-term impact on church life, church property consultants say space sharing is by no means a casualty of COVID-19. On the contrary, such partnerships will play an increasingly important role in mission and finances.
But reverting to old playbooks won’t suffice. Congregations need to look with fresh eyes, they say, at what will be needed in their communities and what they can host at their facilities that will be consistent with their missions.
“There’s a whole swirling set of questions that most entities are not getting into,” said Bob Jaeger, co-founder and president of Partners for Sacred Places, a Philadelphia nonprofit that consults with congregations on new, mission-centered uses for old spaces. “A lot of us need to be asking these questions because it’s getting at the heart of the operation, the dynamics of congregations today and whether they will fail or not.”
The pandemic has scrambled the landscape of space sharing in religious facilities, according to a Partners for Sacred Places survey of 131 congregations in late June and early July 2020. Only 34 percent of community service programs based at these religious facilities were still operating in early summer; 38 percent were not expected to ever resume operations in those locations.
Programs that congregations described as most likely to reopen at their facilities were clustered in a handful of fields: health, legal, feeding the hungry and substance abuse treatment. Least expected to reopen were space-sharing arrangements for homeless outreach, community arts, violence prevention/intervention, and workforce development.
Congregations should approach partnerships with other organizations first and foremost as space sharing for the sake of enhancing the church’s mission impact, Jaeger said. He cautioned against seeing rentals as a financial rescue strategy. That’s in part because arrangements work best when missions are aligned and synergies become new assets. Sharing space with for-profits can sometimes be doable, Jaeger said, but church income from such arrangements might be taxable.
With so much in flux due to the pandemic, Jaeger suggests inviting community leaders and local organizations to visit the facilities, discuss community needs, have a look around, and hear what they can imagine happening there.
“Demand and opportunities to share space will be as great as ever” after the pandemic, Jaeger said. “I’m not worried about that. But the mix of uses will change.”
After pandemic restrictions ease, whenever that might be, space sharing could be needed to help fill new budget gaps. That’s because, even though pledged giving has generally held up well thus far, congregations might see weakness in that area after the pandemic, according to the Rev. Canon Dr. Lang Lowrey, canon for Christian enterprise for the Diocese of Atlanta and consultant on church real estate development. Converting land or buildings into income-producing properties can expand endowments when such revenue streams are needed.
“Post-pandemic, what I fear will happen is that parishes will return from the pandemic to see attrition and no newcomers for the past 12 months to replace them,” Lowrey said in an email. “In this case, I suspect parishes will try to sell excess land — land previously purchased for expansion — to pay for operating losses… Turning land / buildings into endowment makes sense, but once it is sold then it is gone forever.”
Economic pressure can light a fire for new, income-producing mission partnerships. That’s been the experience of the Rev. Richard Meadows, who serves two predominantly Black Baltimore congregations, St. James on the Square and St. Michael’s and All Angels. He grew up attending St. Philip’s Church in Buffalo, New York., where his rector, the Rev. Kenneth Curry (father of Presiding Bishop Michael Curry), nurtured a model of providing space for a social-service enterprise.
“That’s where all of this stems from: Bishop Curry’s Dad, St. Philip’s and St. Philip’s Community Center,” Meadows said.
Meadows tried a similar approach at churches in Connecticut and Florida, he said, but it didn’t gain traction in leery congregations. He finally found a receptive vessel when he came to Baltimore, where financial pressure meant he could be more enterprising.
Now space sharing accounts for about half the revenue in St. Michael’s $120,000 budget. The church has a lot of facility to offer: a 650-seat nave, chapel and two fellowship halls which together seat 280. Three other congregations use St. Michael’s for worship. A community service provider rents a storefront. Other mission-minded groups with leases, such as Youth with a Mission and Camp Success, are among those who regard St. Michael’s as home.
COVID-19 has battered St. Michael’s rents, which now add up to less than a quarter of the $5,500 per month that they were generating pre-pandemic. But expenses have fallen so much with the building being closed that the church is keeping spending in line with income, according to Meadows.
Strategic improvements are meanwhile positioning St. Michael’s for post-pandemic trends. An insurance claim after a pipe burst on the third floor in 2017 enabled a makeover to one side of the building: new flooring, heating and air conditioning. Now the church has gone further by renovating its commercial kitchen by replacing gas lines and appliances. That makes it desirable as business incubator space or as a “ghost kitchen” in St. Michael’s gentrifying neighborhood.
“Some people won’t return to the restaurant business, but they’re looking for commercial kitchens to run their catering operations or however they get their food out,” Meadows said. “We’re going to hopefully take advantage of that.”
For Church of the Holy Comforter, opportunities born in the pandemic go beyond covering budget gaps. Renovations have also become possible through creative arrangements with space-sharing partners.
Deferred maintenance, which once made the Dove House a candidate for demolition, is now getting done on the dime of Well for the Journey. Rather than pay $2,400 per month market rate for use of the whole house, Well for the Journey is paying $2,000. In exchange for the discount, Well for the Journey is investing $100,000 in renovations, according to Tang.
“They wanted to do some major renovations, which included gutting the kitchen, rebuilding that, putting new flooring in – just really a significant upgrade,” Tang said. The congregation still has access to the house for storage and for Sunday morning adult education.
Active Minds Learning Camp has also made pandemic-related improvements to the church as part of its new lease agreement, which began January 1.
Active Minds Executive Director Mike Serio “is putting in the safety protocols,” Tang said. “He dropped probably $8,000 in sanitation systems,” including a Clean Tech Elf station that sterilizes hands in seven seconds. “He outfitted our parish hall with one of those, and he paid for that.”
With at least one-third of community programs expected not to return to their faith-based landlords after the pandemic, even congregations with space-sharing experience are gearing up for a time with new partners and new arrangements.
For the innovative, it’s a landscape and a season ripe with opportunity.
“A normal way for a church to look at an old building is with the leaks, the cracks in the stone and the empty Sunday school, and it just feels like it’s a burden,” Jaeger said. “Architects can … reimagine how these great old spaces might be reconfigured and used in new ways. That can fire up their imagination for how a Sunday school wing can become a center for children or a parish hall can become a center for the arts. There are lots and lots of possibilities.”