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Managing the Changing Dynamics of Legal Risk and Ministry

By James F. Cobble, Jr.

Sidebars to the article Managing the Changing Dynamics of Legal Risk and Ministry

"When men go to law with one another, there is no good cause which the other side cannot obscure with caviling and technicalities" (John Calvin,Calvin’s Biblical Commentaries).

Shortly after World War II, a church was having a picnic at the farm of one of its members. It was a much celebrated annual event with food, games, and fun. However, in a single moment, what had been a time of joy turned into sorrow. A young boy drowned while swimming in the farm pond. Everyone felt the loss and sadness. As a church, the members drew together to support the grieving family. They experienced the loss together, and as a church family, they cared for one another as they coped with the pain.

A similar tragic event occurred recently. A young boy was killed at a church hayride. He fell off the wagon behind the tractor and tragically was run over by the back wheels. He was only 9 years old. The shock of his death penetrated the congregation with deep feelings of sadness and loss. This time, however, another factor came into play—legal liability.

Fifty years ago, when a tragic accident occurred in a church, no one turned to an attorney for advice or threatened a lawsuit. Today, some might say it was a more innocent time; others would simply view it as a period void of accountability.

People like my grandparents—hard-working midwestern farmers, born before the turn of the last century—viewed life in terms of the providential care of God. They knew accidents happened, and that people were hurt. It is hard for me to image my grandfather in his faded bib overalls sitting across the desk from an attorney, ready to blame someone else for a personal loss, no matter how deep the pain. I remember my grandma telling me that when grandpa felt sad, he would go behind the barn and talk to God. It was a time when people bore loss in a different way, especially within the church. Accidents happened then, much the same way they happen today, but people viewed them differently—there was little corporate blame in a legal sense even though there was a widespread feeling of loss and guilt.

Today, such events tend to be handled quite differently from just a few generations ago. Churches are sued just like any other organization. A number of factors contribute to the increased level of litigation that churches now routinely experience. First, litigation has evolved into a frequent and acceptable form of settling conflicts. Over 20 million civil lawsuits occur annually in the United States. Taking someone to court has become popularized through television as a form of personal entertainment. Second, society is becoming saturated with attorneys. Compare the number of physicians in the yellow pages of any phone book to the number of attorneys; you will quickly see the lopsided ratio. To earn a living, these lawyers need clients. When lawsuits do occur, generally multiple defendants are named. The court system becomes clogged with individual cases involving many different people and organizations. Third, our legal system continues to evolve, adding new theories of liability and becoming increasingly complex in the application of law to any professional practice, including ministry. Fourth, getting people into court has become so expensive that it often becomes cost effective to settle out of court. The threat of litigation becomes the first stage of financial negotiations. And finally, large settlements receive broad media coverage. Winning some lawsuits is like holding the winning lottery ticket for a multimillion-dollar jackpot. All of these factors fuel litigation.

While church leaders increasingly recognize that the legal environment is changing, only a small percentage are taking steps to reduce risk. Perhaps one reason is pastors are not sure what to do. In this section of Enrichment journal on managing church risk, a series of articles will explore some of the conditions, trends, and issues that impact the church today in light of current legal realities. Much more detailed information is available at our Web site: www.churchlawtoday.com.

While the nature of the legal environment continues to evolve and change, one reality remains the same. From the beginning of the church until today, legal realities have impacted our story as the people of God. We should not forget that Mary and Joseph journeyed to Bethlehem during a difficult time of pregnancy to abide by tax law. Jesus was tried according to Roman law and sentenced to death as a criminal. For better or worse, like Paul, we still find ourselves making appeals to Caesar. And at all times, let us remember that risk has always been a part of ministry. In fact, risk-taking is an essential part of ministry. Yet, not all risks are good ones. A need exists to differentiate good risks from bad risks, and to develop some basis for distinguishing those risks that enhance ministry from those that harm it.

Understanding the Nature of Risk

From a theological perspective, little has been written about the art and science of risk management. As an applied discipline, risk management is perceived as being more central to the insurance industry than to local congregations. As a result, confusion exists among church leaders concerning the relationship between risk and ministry.

We all recognize that risk is part of ministry. But what does it mean then to reduce risk? A helpful starting point is to differentiate between the following four dimensions of risk: (1) faith risks, (2) pure risks, (3) speculative risks, and (4) ministry risks. Problems occur when we confuse pure risks withfaith risks. The principal focus of risk management at the congregational level is on pure risks.

Faith Risks

Christians have always faced perils. Persecution, for example, is an expected outcome of being faithful to God. At times this has resulted in imprisonment, exile, and even martyrdom for those who follow Christ. Prophets and saints create their own risks through obedience to their calling. For our purpose, we call these faith risks.

Faith risks are inherent in our relationship with God. They arise first from who we are in relationship to God and the core values that emerge from that relationship, and second from what we do based on those values. When we talk about risk management, our focus is not on faith risks. We do not minimize these risks. Rather, we embrace these risks as disciples of Christ.

Example: John is a college student attending a state university. The first week of classes some guys on his dorm floor, including his roommate, purchase some marijuana. When John refuses to participate, he is ridiculed, and one of the students makes derisive comments about John’s faith.

Pure Risks

While faith risks are uniquely tied to our relationship with God, pure risks describe any form of risk that has two possible outcomes: loss or no loss. For example, if lightning strikes a church building, a fire may start. Then again, it may not. There will either be a loss or no loss. That is a pure risk. When such losses do occur, we generally think of them as being the result of an accident. They can also occur from criminal activity.

From a theological perspective, we can argue that pure risks have an upside. In the midst of loss, good can happen. We can learn from our losses, grow in our relationship with God, and receive and share God’s grace in new and important ways. With Paul we can proclaim, "We know that in all things God works for the good of those who love him, who have been called according to his purpose" (Romans 8:28, NIV).

Attempting to reduce pure risks is the main focus of risk management with respect to ministry. Our goal is to minimize accidents and criminal behaviors that hurt people, destroy property, and harm ministry.

Example. First Assembly of God decides to plant a new inner-city church. They purchase church facilities located in an area with a high crime rate. Vandalism and theft are common. Violence occurs within the neighborhood. The building the church uses is old and in poor repair. Fires are not uncommon in the neighborhood. Leaders of the new church discuss how they can reduce these risks.

Speculative Risks

A speculative risk can have a loss or a profit, or neither. A church that invests money in a piece of land, for example, may sell it for a profit, a loss, or may break even. That is a speculative risk. For many people, the most common form of a speculative risk is investing in the stock market or in a retirement plan. The value of the stock may increase or decrease. Generally, the goal of a speculative risk is profit, although not all speculative risks are financial. While they are important, speculative risks reflect a quite different area of risk management from our principal areas of concern.

Example. First Assembly of God collects money to be used for building a new sanctuary. The church board votes to put the funds in short-term CDs until the church will need it. While some higher rates of return were available, leaders felt they represented too great a risk.

Ministry Risks

While church leaders generally understand the nature of speculative risks with respect to financial investments, they rarely, if ever, use such language when talking about ministry risks. The focus of ministry is not profit or financial gain. Yet church leaders understand that ministry requires an investment of time, money, and resources, and that ministry goals may or may not be achieved. For example, a church may make a considerable effort to establish a program for senior citizens. The program may or may not be successful. The time, money, and effort going into the project may be lost. Rather than calling this a speculative risk, for our purpose we call it a ministry risk.

While faith risks are inherent in one’s relationship with God, ministry risks arise out of a sense of calling that becomes manifest in specific plans and actions. Ministry is driven by faith, but also depends on values, vision, decisionmaking, circumstances, and the knowledge and skills of many people. The results are not guaranteed. Bad decisions can be made. Risks are involved.

Example. First Assembly of God recruits volunteers to assist with the new inner-city ministry. With the help of supporting church members, they rent facilities and office space, purchase equipment, and print literature. A young married couple, John and Erin, are selected to serve as pastors. Extensive time, effort, planning, and expense have gone into establishing the new inner-city church. Church leaders supporting the project understand that the burnout rate for inner-city workers is high. The ministry is difficult. Together, they work hard with John and Erin to develop a strategy that will work.

Conclusion

As we can see, all four dimensions of risk are present in our lives and ministries. Furthermore, the occurrence of a pure risk can devastate a ministry and cause severe harm and suffering for many people. Ask any congregation that has experienced a case of sexual molestation of children.

The purpose of risk management is to reduce and, to the extent possible, eliminate pure risks from ministry. If risks cannot be prevented, then the second goal is to minimize their impact. All the while we embrace the risks of faith and ministry. That is our focus in this section of Enrichment journal.


James F. Cobble, Jr., Ph.D., Matthews, North Carolina, is executive director of Christian Ministries Resources.

 

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