Robert Morris: Gateway Church is Doing Well and So We Are Reducing Staff

On April 18, I reported that fourth largest American church Gateway Church in Southlake TX was in the process of laying off about one-third of church staff. Two days later a church spokesman said the layoffs would reduce staff by 10-15%.  Today, Robert Morris told his congregation that the reduction would be “15 to 20%.” Watch:

Transcript:

One thing I want to tell you, one other thing. Uh, this is really true. There’s one other thing. Before I, uh, start the message, is I want to let you know that we’ve been in the process of evaluating everything that we’ve been doing around here, uh, for several months now.
It started last fall, at our elders’ retreat. And we’re in dynamic growth at Gateway Church. We have been growing dynamically for years and years and it, it hasn’t stopped at all. And we felt like the Lord spoke to us on the retreat last fall, that this growth is going to continue.
And so we need to prepare for the growth, and so, we’ve done what many corporations or organizations have done. We’ve gone through everything we’re doing, we’re saying, ‘Is this the most efficient way and the most effective way to minister to people?’
We’ve looked at all of our positions, we’ve looked at all paid staff, we’ve looked at all volunteers, we’ve um, looked at all of our processes, uh, and we’ve come to the conclusion that we need to make some changes, in how we do things. So we could do things, uh, better. And not be as “busy” maybe as we are, so you’ve got more time to minister to people, be with your family, and yet still be equipped.
And so, we met with, again, every person on staff. And our meetings have been fantastic. We have the best staff in the world. I mean, we have, phenomenal–if you’ve dealt with our staff, I think you know what I mean.
But we realized that we’re overstaffed. And so as we, as we met with all- everyone on staff, we felt like offering some very generous transition packages. And so we had many of our staff that said, ‘You know, I’ve been feeling like God’s saying something different to me, and that I’m supposed to do something else, and so, thank you so much, because this will help me.’
And then also as we went through this, some positions, we realized, are not needed any more. And so we’re going through about a 15 to 20% reduction in staff.
And I wanted you to know that, so that if you hear something, you’ll know why. We’re trying to do what God’s called us to do, more efficiently, and we’re also trying to prepare for the growth that we have in future, and cause that growth to be sustainable.
So um, our growth is– our attendance is up, our giving is up, uh, every- the church is doing well, but we decided we’ve got to make some changes.
So here’s what I want to ask you to do. I want to ask you to pray for these–our staff, the part of our staff that’s going to go through a transition. Many of you have been through a transition. The great thing about being a child of God, and going through a transition, is that God already knows what he has for you next. And God knows that, but I want us to be in prayer.
So I wanted you to hear from me, why we’re doing what we’re doing, and what we’re doing, in case you heard it from somewhere else, it was in the newspaper, on the news this last week, uh, but we have– there’s no financial problems, we are simply trying to do what we do, better. And so we are going through this re-evaluation processes, and it has been absolutely phenomenal.
So again, please pray for our staff, for the ones that will go through a transition, all right? All right.”

Morris puts a nice spin on events but it seems improbable that the reduction is because of growth in attendance and giving. One way to look at church finances is that the church has overspent revenues by $23-million in 2015 and 2016.
Morris said the elders decided to downsize last fall. So after they decided to eliminate positions and charge the youth group for pizza, they also decided to co-sponsor an expensive inaugural ball for President Trump.
Morris uses a business rationale to say downsizing is due to growth (i.e., rightsizing). If Gateway was bringing in machines to take the place of humans, then one might understand how growth in revenues and efficiency might be an outcome of downsizing. Otherwise, his explanation doesn’t seem convincing.

 

Former Auditor: Over Past Two Years, Gateway Church Overspent Revenues by $23-Million

On Tuesday, I reported that Dallas-Fort Worth megachurch Gateway Church is laying off staff while spending millions on undisclosed non-operating expenses. In addition, the fourth largest church in America may have spent millions more than revenues for the second year in a row. According to former Big 4 accounting firm auditor Jason Watkins, Gateway’s expenditures have exceeded revenues by nearly $23-million. The image below was supplied by Watkins.

Gateway Deficit Spending Graph
Compiled by Jason Watkins

You can read Gateway’s annual reports for 2012, 2013, 2014, 2015, 2016 by clicking the links. However, the losses are not apparent at first glance. Watkins told me that the format of the annual reports obscures the true picture. The image below compares actual revenues and expenses.
GW 2015 revenue over expenses
Total revenue for 2015 includes the actual giving to the Heart for the Kingdom campaign and general fund revenue ($147,455,568). Expenses include the Heart for the Kingdom expenses, operational expenses, capital expenditures and debt retirement ($160,653,068). According to Watkins, Gateway spent just under $13.2-million more than the church took in.
In 2016, the church spent $9.6-million more than revenues. In the image below, compare the “non-operating expenditures” line ($13,123,084) with the “revenue over expenses – operational” line ($3,505,562). The difference is a loss of $9,617,522 for 2016. With the previous year’s deficit, Gateway has spent nearly $23-million more than received, according to Watkins.
Gateway Annual Report 2016
Since there is so little detail in the report and since Gateway has declined to respond to questions, it is not possible for me to be dogmatic about the financial picture. However, I think Watkins makes a good case that Gateway’s spending has exceeded what members have supplied. His conclusions seem quite consistent with what Gateway’s spokesman Lawrence Swicegood told the Star-Telegram about cuts in both staff and expenses.
Gateway wouldn’t be the first church to cut staff and expenses but the situation is noteworthy for at least two reasons. One, the size of the cut back is substantial — as many as one-third of 900 positions. Two, the lead pastor of Gateway Robert Morris is famous for his teachings about tithing and the promises that tithing will bring prosperity and success. Since the members have no input into how money is spent, the responsibility falls squarely on the leaders at Gateway.

Gateway Church Issues Statement Confirming Staff Reductions

Robert Morris and Ted Cruz Wilks Bros
Gateway Church Founder Robert Morris and wife Debbie with Senator Ted Cruz (R-TX)

Earlier today, the Fort Worth Star-Telegram published a story with a statement from Gateway Church confirming the staff reductions I reported on Tuesday.  According to the statement from Lawrence Swicegood, executive director of Gateway Media, the church is going to “prune” staff to prepare for growth. I suppose that is one way to look at it, although I also suppose that the staff to be pruned might see it differently.
The Star-Telegram report said that the church planned to reduce staff by 10-15% but gave no time frame. My sources maintain that the plan is to eventually cut as many as one-third of 900 positions.
The Star-Telegram article may have misstated Gateway’s financial status for 2016. As I read the annual report, it appears that Gateway experienced a deficit. More about that in a future post.
To me, a curious note is that the Star-Telegram said the church confirmed the staff layoffs but did not say what initial report had been confirmed. You can read that report first published here on Tuesday.
 
 

Layoffs Coming to Gateway Church Amid Millions in Spending

The fourth largest church in America is in the midst of what has been called a “pruning.” According to sources in a position to know, Gateway Church is in the midst of gradually laying off one-third of current staff. According to sources who wish to remain anonymous to avoid repercussions, Gateway leaders are downplaying the layoffs, calling them a “healthy pruning.” Without referring to the downsizing, Gateway is offering a resume writing workshop to help to those who have been “laid off or fired.”
GW Resume Writing
While the classes will no doubt be helpful, it is worth asking: Why does a church which took in over $127-million in revenues in 2016 need to lay off staff? Gateway’s annual report for 2016 is below:
Gateway Annual Report 2016
First of all, it is worth noting that Gateway is a massive enterprise with a fund balance of over $155-million. At first glance, I have a hard time understanding why Gateway makes their youth group pay for their mid-week pizza snack and is downsizing operational staff. Gateway has not responded to my questions about the matter.
Curiously, Gateway reports $13,123,084 in “non-operating expenses.” Non-operating expenses refer to funds spent not in keeping with an organization’s mission.  As a non-profit, Gateway is supposed to spend donor funds on mission related purposes. If the non-operating expenditures were shown as a deduction from the “revenue over expenses-operations” as was Gateway’s practice in prior years (e.g., 2015), the statements would show a combined spending in excess of revenues (a net loss) of $9,617,522. It appears that Gateway altered their presentation to make the loss less obvious to statement readers. While non-operating expenses can refer to interest payments and other permitted purposes, it is fair to ask why there is no description of these expenses which comprise just over 10% of 2016 revenues.
Possible Non-operating Expenditures
Inaugural Ball sponsorsDuring 2016, Gateway’s founder and Lead Pastor Robert Morris was a vocal supporter of the GOP and now serves on Donald Trump’s advisory committee. Gateway Church helped sponsor a inaugural ball for Donald Trump which took the Morris’ away from their annual January churchwide fast. At the same time, Gateway Church began charging the youth group for their weekly pizza snack at meetings. While the youth group paid for their pizza, the Robert and Mrs. Morris were spending Gateway’s funds on a pricey inaugural gala. With Trump winning the presidency in November, it seems likely that some of those sponsorship funds would have been committed from 2016 revenues. Listen to Tony Perkins thank the sponsors of the gala which celebrated “the great victory.”

In September 2016, Gateway sponsored and hosted a Solemn Assembly of Christian right pastors to pray for the nation. Although the event was a downsized version of the original plan (75,000 pastors in Cowboy stadium), the promotional video makes it clear that the event sought political change through a religious event. Is any of this political activity in Gateway’s non-operating expenses?
[youtube]https://www.youtube.com/watch?v=ljR6pOifHoY[/youtube]
 

Robert Morris: President Trump Talks to James Robison Two or Three Times Per Week

Gateway Church Apostolic elder James Robison has long been known as a Christian right mover and shaker. A persistent story I hear is that Ben Carson would only endorse Donald Trump if Trump first spoke to Robison. Even if untrue, the story highlights the reputation Robison has in Christian right political circles.
Gateway Church’s founding pastor Robert Morris added to that mystique earlier today by telling his congregation that Robison and Donald Trump talk “two or three times a week.” Morris said Robison has Trump’s “private cell phone” which he uses regularly. Watch:

Transcript

I really do want you to get the book, it’s one of the most amazing books I’ve every read, and has conversations of him speaking with people you know, well-known people, Muhammad Ali, President Reagan.
And if you don’t know, I talked last week about serving on the Advisory Council.
James, though, speaks with our President probably two or three times a week, and has his private cell number, and he picks it up even when he’s in a meeting. You know, ‘I’m meeting with the Joint Chiefs of Staff, James, can I call you back?’ But–
So, I’m very very grateful for James Robison and for his influence.

I wonder what Robison does with his influence. I suppose this is intoxicating to those ministers who have Trump’s number, but with Trump routinely peddling falsehoods, ignoring Russian attacks on the Ukraine, and waging war on the press, I can’t see much evidence of Christian influence.