Last year, at the end of 2012, Harvest Bible Chapel finished $700,000 (or 2.7 percent) behind on its annual budget of $26 million. This year, it is facing an even larger shortfall, as it is currently $2.9 million behind budget. What’s more, since the publication of the Phelps/Slabaugh ex-communication video, the rate of weekly losses has increased to an average shortfall of 18.5% against the planned budget.
Last Thursday, James MacDonald and the leadership of Harvest Bible Chapel called a mandatory, emergency, all-staff meeting. During this meeting, he informed the employees of HBC that weekly attendance has declined, and as a result, financial giving has also dropped. As a result of these new economic realities and the unchanging nature of the debt crisis, he announced a number of austerity measures that have been put into place.
- Harvest Bible Chapel is continuing their ministry-wide hiring freeze. If an employee elects to leave for whatever reason, he or she will not be replaced, but rather, his or her duties will be reassigned to other current employees.
- Six full-time staff members were laid off on Wednesday (November 6th).
- An undisclosed number of part-time employees were also laid off.
- The 5G Campaign will be extended for another year in the hopes that it can be effectively resuscitated.
- An undisclosed number of high-level pastors have taken pay cuts ranging between 5 and 15% of their total gross income.
- Finally, James MacDonald, himself, has taken a 20% cut in pay to help alleviate the financial shortfall.
While we fully recognize the validity and importance of all of these financial sacrifices, a preliminary evaluation of the current situation suggests that this may not be nearly enough to combat the current trend in decreased giving. If the 18.5% decrease in giving is projected out into 2014, HBC will come up approximately $4.8 million shy of its annual budget of $26,000,000. So what appears to be happening at present is that Harvest is taking small initial steps in the hopes that the congregation that remains will dig more deeply into its own pockets to help alleviate the projected shortfall. This situation is precisely the reason we wrote about the dangers of accumulating a massive and potentially unsustainable debt. Debt always presumes upon a positive future that may or may not materialize in ways that are hoped for or even anticipated.
Finally, and most importantly, this announcement raises a critical question. James MacDonald is clearly trying to position himself as a sacrificial leader by announcing that his pay cut is larger than any other pay cut being taken by other staff members. But one must remember that other staff members do not have multiple streams of income that are all being derived from a core ministry based out of HBC. Other staff members do not get paid by Walk in the Word, nor do they get paid large book advances or large honorariums for outside speaking engagements based upon their fame as a mega-church pastor.
James MacDonald recently paid off the mortgage on his $2.1 million Inverness home and placed it in a trust. So, if James MacDonald were to have taken a 50% pay cut from his last known HBC and WITH salaries, which exceeded half a million dollars per year, that would have left him with a $2.1 million home that was fully paid for, a cabin in Michigan with a $300,000 renovation, a $250,000 base salary and no monthly mortgage payments to make. Please remember, he would still be earning additional compensation through book advances, speaking honorariums, six-figure personal expense accounts and possibly even other sources of income (e.g. HBF?).
Now imagine, how many of the six full-time employees could have remained employed if James would have taken a 50% pay cut and contented himself with merely earning five times the annual income that his congregations in Rolling Meadows and Elgin typically make?