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Minneapolis (ELCA)-JB — The board of trustees of Augsburg Fortress, the publishing house of the Evangelical Lutheran Church in America (ELCA), adopted a strategic plan aimed at making the company fiscally sound and recognized as a significant ministry within the church. The board also learned that the company's financial outlook is improving.
The trustees met at the Augsburg Fortress corporate offices here Oct. 23-25.
The strategic plan identifies Augsburg Fortress' vision, strategic directions and objectives, values statements, strategies, strengths and weaknesses, opportunities, competitive and environmental analyses, future plans and financial projections. The plan was proposed for board action by the publisher's management team.
Reviewing the plan is the "most critical function of the board," Beth A. Lewis, Augsburg Fortress president and chief executive officer, told the board. "This is where we need the board's help."
"The adoption of a strategic plan increases the level of partnership between Augsburg Fortress and the ELCA," said James "Jim" Myers, board chair, Kailua, Hawaii. "Our plan will make us a better partner and a stronger financial partner." Company leaders have looked at the publisher's strengths and weaknesses "honestly," with the purpose of making the company's outreach stronger, Myers said.
In a brief executive session, the board evaluated the work of Lewis, who began work in her role Sept. 1, 2002. The board affirmed her efforts to turn the ministry around with a standing ovation, Myers said.
"What a change Beth Lewis has brought to Augsburg Fortress," Myers said. "Everyone is moving in the same direction. Attitudes are so different. One person sent me an e-mail and said 'what a difference one person can make.'"
In a report to the board, Lewis said in her first few months as president and chief executive officer, she set out to improve communication and accountability, and she asked customers and former customers to give the company some "grace."
"We've come a long way, and we have a long way to go," Lewis said in her report. Referring to Augsburg Fortress as "the ministry of publishing within the ELCA," Lewis said the company wants members to better understand the connection the publisher has to the ELCA.
Augsburg Fortress is working to build partnerships through regular communication with constituents and churchwide partners, and it has offered its meeting space here and in Philadelphia — home of its Ecclesiastical Arts Studio — to church groups that want to use them, she said. Lewis said she is "delighted" with the response.
"This 'ministry of hospitality' is another way we are improving communication," she said.
Augsburg Fortress is using a "Balanced Scorecard" management system of accountability for all programs and employees. The system includes "a common set of objectives" for all, she said.
Lewis credited her management team and Augsburg Fortress employees for their work to turn the company's fortunes around.
Since 2001, the company has improved its financial situation considerably, said George W. Poehlman, Augsburg Fortress vice president for finance. He reminded the board that Augsburg Fortress suffered a $7.17 million loss that year.
While the financial status of Augsburg Fortress is significantly better, it is unlikely the ELCA publisher will reach the break-even point this year or next, the board learned. Through September, the company's net loss for 2003 was $1.67 million, nearly $1.2 million better than at the same time one year earlier, Poehlman said. The net loss is "very close" to projected figures, he said.
The board gave preliminary approval to management's proposed 2004 budget. Based upon a sales forecast of $44.6 million, management proposed a $25.5 million operating expense budget. The proposal projects a net loss of $272,000 for 2004. It anticipates an increase in sales of $1.8 million, while aiming to keep the company's operating expenses under control, Poehlman said.
"We've done a lot in the last three years on expense reduction," Poehlman said. "But we're getting to a place that with further expense reduction, we're going to have to reduce the scope of our product offerings."
Critical to the publisher's success in 2004 will be sales of five items, Poehlman said. They are: a new Vacation Bible School resource, "Davey and Goliath's Camp Creation: A Super Gospel Celebration"; "Witness," a Sunday School series; worship supplies to congregations; programs designed to raise funds for congregational ministries; and new worship resources in the ELCA's "Renewing Worship" series.
The board also took action on or learned about other matters of interest:
+ It lowered the percentage to be used in calculating the pension benefit formula for employees hired after Jan. 1, to reduce the funds the company must contribute to its defined benefits plan. Some board members expressed concern for the reduced benefit and how it may impact hiring in the future. But others endorsed the proposal as good for the long-term financial health of Augsburg Fortress. Some board members raised concerns that Augsburg Fortress employees join the ELCA pension plan, since the publisher is a churchwide unit.
+ Subscriptions for The Lutheran, the magazine of the ELCA, continue to decline, said the Rev. Barbara R. Rossing, board member, Chicago. Rossing, who represents the the board on the magazine's advisory committee, said many in the church support the magazine and are concerned about the decline. Presently, the magazine has 444,495 subscriptions.
The board also discussed a unique proposal presented to the advisory committee for The Lutheran, in which the churchwide organization could provide the magazine to church members at reduced costs, said James M. Huber, publishing director for The Lutheran, Augsburg Fortress. Such a plan could be beneficial to the ELCA, he said.
"It will be worth the investment," said the Rev. Steven L. Ullestad, bishop of the ELCA Northeastern Iowa Synod, Waverly, adding that members would "learn about the wonderful ministries of the church." Ullestad is the board's advisory bishop.
+ Board members adopted and signed a "Board of Trustees' Covenant," in which they pledged to share and accept their responsibilities to provide strategic oversight for Augsburg Fortress and advocate for the ELCA publisher.