Tuesday, March 31, 2009

Isn't "50" just half-time?

Well, it's started. Looks like some fun is ahead as I approach the magnificent milestone of the big "50." Half a century. Is this the middle of middle age?

The first e-mail of what may be numerous and similarly humorous e-mails came through this morning from Chad McCallum. Thanks Chad!

"Mark – thinking of you this morning as you approach the proverbial summit of your life…

I have been thinking of some hymns for the over-50 crowd (now that you are soon to be numbered among that number)…

1. “Precious Lord, Take my Hand, and Help Me Up”

2. “It is Well with my Soul; but my Knees Hurt”

3. “Nobody Knows the Trouble I have Seeing”

4. “Go Tell it on the Speed Bump”

5. “I Love to Tell the Same Story”

6. “Just a Slower Walk with Thee”

7. “Guide me, O Thou Great Jehovah, I’ve Forgotten where I Parked”

Here is to another 50 years of life and ministry! In the words of George Burns, “If you live to be one hundred, you've got it made. Very few people die past that age!”

Blessings on my friend!


Monday, March 23, 2009

Trailing at the Half ...but Prevailing!

Knowledge @ Wharton posted this insightful article (March 18, 2009) on comeback victories:

"According to recent research by a pair of Wharton professors, teams that trail by a little at the half actually have a better chance of winning the game than the squad in the lead.

Wharton marketing professor Jonah Berger and Devin Pope, a professor of operations and information management, found that teams which were slightly behind at the half won more often than they lost. Their research paper, which is based in part on the results of more than 6,000 recent college basketball games, is titled: "When Losing Leads to Winning."

But Berger noted that these findings could just as easily apply to the workplace, because they suggest that employees -- like basketball players -- should be more motivated and thus perform better when they are close to, but just short of, an important goal.

"Take any situation where someone is so close to a goal that they can almost taste it," Berger noted. "The fact that they're almost there makes them work harder." Thus, in the corporate world, where goal setting is an important management tool, Berger said it's a good strategy to pick milestones that are within reach, such as passing a close competitor in sales.

Focusing on goals that are close and achievable may be more motivating than lofty but unrealistic goals, according to Berger. "You want to pick a target that's close, where you are almost there but not quite."

Pope, his co-author, elaborated: "A lot of tools are used in the workforce to motivate people, such as wages, bonuses, etc. While surely these things can have motivating effects, one should not underestimate the potential importance of psychological motivation as well. This paper shows that the psychological impact of being behind by a small amount can cause significant increases in performance."

Motivational behavior is not Berger's usual academic focus. Usually, he delves into topics such as social contagion, viral marketing and decision-making issues like those explored in Malcolm Gladwell's best-selling book, The Tipping Point. But Berger began to think about the issue of motivation while coaching youth soccer. "As the coach, I always had to say something at halftime. And I always tried to be motivating. But I noticed that regardless of how much I emphasized that we needed to work hard, the players always seemed more motivated when we were behind."

When Berger came to Wharton, Pope mentioned an interest in similar issues, so they began to look for statistical evidence to back up the idea that trailing slightly could be a motivator. Earlier research into major sports shows that a team taking an early lead in a game tends to win two-thirds of the time. The reasons are self-evident: The unit jumping to a quick advantage is likely a more talented squad, and the trailing team must make up extra ground to win.

But Berger and Pope decided to look at how smaller halftime deficits affected the outcomes. To do that, they collected the results of 6,572 college basketball games played between 2005 and 2008 in which the difference at halftime was within 10 points.

As expected, the data showed teams with big halftime leads usually went on to win. For example, a college squad that is leading by six points at halftime is the victor about 80% of the time. But there is a significant deviation from the expected result for a team that is losing by just one point at the half. Using the rest of the data to control for expected performance, the trailing team ought to win about 46% of the time, according to Berger. But, in fact, those teams won 51.3% of the time.

Why does this happen? Berger and Pope believe that the answer lies in how losing affects people's drive. "Being slightly behind can be good because of the psychology of human motivation," Berger said, adding that the score provides the players with a reference point for working just a little harder. "If you're behind, you get a little more motivated. You work harder and because of that, you are more likely to succeed."

Indeed, there was no advantage to being far behind at halftime. The researchers note that their findings jibe with earlier research showing that animals run faster when they are closer to a food reward and that people work harder at a task when it is closer to completion, not when the goal appears to be distant.

Second-half Surge

Consistent with the notion that being slightly behind is motivating, the basketball data show that the effort of the trailing team seems to be greatest right after the half. Teams that were trailing by one point at the half outscored their opponents by an average of 1.2 points in the second half -- and half of that average boost came in just the first four minutes of the 20-minute period. The researchers found no evidence to suggest that teams with a one-point lead were easing up.

But how to translate these findings into the business world, where there is not a large scoreboard hovering over the players' heads? Here, Berger and Pope suggest that the role of managers as motivators looms larger -- to set goals that are understandable, achievable and within reach.

They also conducted a secondary experiment in which people were paid to compete in a short, simple game that involved typing letters on a keypad. Midway through the game, one group of participants was told that they were close behind, slightly ahead, far ahead or far behind. A control group was not given any information at the break. Just as the real-life basketball results had suggested, the group that exerted extra effort was the one that had been told it was only slightly behind midway through.

"First, merely telling people they were slightly behind an opponent led them to exert more effort," they write. "Competitive feedback that they were slightly behind not only increased effort in general, but did so more than being tied, slightly ahead or receiving no competitive feedback at all. Second, while being behind boosted effort, it did so only when participants were not too far behind."

Additional research showed that motivation is closely tied to self-confidence. In another sample group in which participants played the keyboard game, they were also evaluated for their self-efficacy -- that is, their belief in their ability to accomplish goals. The researchers found that people with higher self-efficacy were the most capable of exerting extra effort in the second half.

Stop to Take Stock

Berger and Pope see these finding as useful to other fields -- not just business but also in academic settings. For example, they suggest, a team of researchers involved in a competition should focus on the ways that they are slightly behind the opposing academic teams. They also recommend what they call "strategic breaks" -- in which managers cleverly design the timing of breaks to allow employees to stop and take stock of their efforts.

The concept, according to Berger, is similar to how skilled coaches might cleverly use timeouts to control a game. "You obviously want to call time out when the other team is on a run so that [the opposing players] don't gain confidence," he said. "But you also want to call time outs in a way that motivates your own team -- for example, when they are just slightly behind their opponents."  

Wharton marketing professor Maurice Schweitzer recently co-authored a paper called, "Goals Gone Wild," documenting, among other things, how overly ambitious goals set by managers led to scandals at firms such as Enron and Sears when employees felt compelled to cheat in order to reach the lofty targets. Berger said that this finding is one more reason why managers would want to focus on more achievable goals. "What these examples show is that the goals were set too high. Monetary incentives made employees extremely motivated, but the goals were so unreasonable that they didn't have the ability to meet them -- so they cheated."

The goal of the research, Berger noted, was not so much to gain insight into sports but to open a window into human motivation. "The psychology of these situations is the same, whether it's sports or business or academics. [It's about how] we motivate employees or researchers, and how we use competitive situations to help them succeed."


Monday, March 16, 2009

Church Delinquencies and Foreclosures

Consequence of boom-years borrowing hits churches
Rachel Zoll - Associated Press Religion Writer - 3/15/2009 4:35:00 AM

Companies that specialize in church mortgages report that foreclosures and delinquencies for congregations are on the rise as the tough economic times start to make their impact at the offering plate.


Metropolitan Baptist Church was bursting out of its home.

From a group of freed slaves in Civil War-era Washington, Metropolitan Baptist had grown into a modern-day megachurch and community service powerhouse. In 2006, construction began on the congregation's dream complex in Largo, Md. - a $30 million campus with a 3,000-seat church, an education center and an 1,100-car parking lot.

Last year, the congregation sold its church in Washington. Preparations began for the move to what leaders had taken to calling "God's land in Largo."

But on Oct. 20, their plans were abruptly put on hold.

The Rev. H. Beecher Hicks learned that financing for the project had dried up. Construction stopped. And the congregation found that it was homeless - reduced to renting space and struggling to find new financing.

Add houses of worship to the list of casualties of the mortgage crisis.

Foreclosures and delinquencies for congregations are rising, according to companies that specialize in church mortgages. With credit scarce, church construction sites have gone quiet, holding shells of sanctuaries that were meant to be completed months ago.

Congregants have less money to give, and pastors who stretched to buy property in the boom are struggling to hold onto their churches.

"The economy has dramatically changed over the last year to 18 months in a way that very few, if any, had expected," said John Stoffel, administrative pastor at Seabreeze Church in Huntington, Calif.

Seabreeze spent about $12 million on a new complex that was completed in 2007. But a drop in donations, partly due to a rift between the pastor and some church members, forced the church to renegotiate for an interest-only mortgage. Stoffel said Seabreeze hasn't missed a payment, yet the mortgage is far from the church's only debt. The church also owes $1.2 million - due this year - on bonds that helped finance the project, and must repay a $200,000 loan that a couple took out on their house to help Seabreeze cover its costs.

It's hard to quantify just how many churches are at risk. Foreclosure records are scattered throughout county offices nationwide. Completing a foreclosure takes months or longer, so it's too soon for many failures to show up on a company's books. In financially stressed churches, clergy are often reluctant to discuss their plight. They don't want to alarm their congregants, and they fear that any complaints about their dealings with banks will backfire.

"Right now, when you're at the mercy of the lenders, you don't want to look like you're coming out against them," said Bishop Eugene Reeves of New Life Anointed Ministries International in Woodbridge, Va.

The 3,500-member Pentecostal church near Washington needs a couple of million dollars to finish its new $19 million complex. Construction stopped last spring when New Life's lender said it would make no new loans to the church, Reeves said.

"We now have children who don't have classrooms to get into, adults who have to go to an overflow room," Reeves said. "We have parking issues. We don't have enough spaces for cars."

Across the country, congregations large and small are struggling to pay off debt:

-Reliance Trust, an Atlanta company that is trustee for nearly three-quarters of the church bonds in the U.S., has seen "some increases in delinquencies," said spokesman Tony Greene, though he would not elaborate.

Among its clients is Temple Beth Haverim in Agoura Hills, Calif., which sought Chapter 11 bankruptcy protection last July and owes the company more than $7 million, Reliance said in court documents. The property is estimated to be worth less than what the synagogue owes.

-Strongtower Financial, an arm of the California Baptist Foundation, said in a prospectus that 10 percent of its $119 million in outstanding loans were in default as of March 31, 2008, its most recent required reporting date. Chet Reid, Strongtower's president, said the specifics were private, but the company had only one foreclosure in the last decade - in 2006.

-The Evangelical Christian Credit Union, a major church lender with more than $700 million in loans last year, moved to foreclose on seven of its 1,100 loans in 2008, said Mark Johnson, the company's executive vice president. The company has had "a noticeable increase" in late payments, and two more foreclosures are expected this year, he said. By contrast, the Brea, Calif., company said it had no other foreclosures until 2007, when there were two.

These problems may seem minor compared to the epidemic of foreclosures on private homes. But church mortgages have always been considered one of the more solid investments, with lenders often boasting of only one or two foreclosures over a billion dollars in loans.

Even in bad economic times, people still go to church, which helps shield congregations from downturns, lenders say. Churches also have more flexibility than some other borrowers in cutting expenses. They can end charitable programs or trim staff and still stay open for business.

"You can certainly make a bad church loan if you try hard enough," said Dan Mikes, who leads the church banking group of Bank of the West, a major lender. "But if you're careful and you don't overlend, and you're cautious in the way you underwrite, you're fine."

However, the recent boom years brought changes that made the industry more vulnerable.

Firms looking for new lending opportunities in a time of easy credit entered the industry, and competition escalated. The size and number of church loans skyrocketed, with several companies reporting double-digit annual growth rates before the bust.

Some lenders even got into the business of securitizing church loans, combining them as an investment in the way banks did with home mortgages. In 2006, Strongtower Financial, based in Fresno, securitized church bonds for the first time, with a $56.3 million offering.

Roland Leavell, president of Rives, Leavell & Co., a church bond broker in Jackson, Miss., said that firms specializing in church financing often aped their commercial loan counterparts, lending too much money without a thorough check of what their clients could afford.

"The starting point was the commercial banks," Leavell said. "When somebody on one side of the business gets moving fast and loose, it makes every body else move fast and loose."

Johnson, of the Evangelical Christian Credit Union, insists that his company upheld its strict underwriting standards throughout the flush years when the firm was growing at an average rate of more than 20 percent annually. He said the economy alone is behind the recent troubles.

"Our history would say that we had done a really good job," evaluating clients, he said. "It has become very visible to everybody today that the recession hit 18 months ago. The foreclosures we've seen have coincided with that."

But foreclosure and bankruptcy records paint a more complex picture of some of the company's failed clients _ and raise questions about whether the pressure for profit altered the industry's normally ultra-cautious approach.

Among the company's foreclosed-upon clients is Juanita Bynum, a former hairdresser and popular Pentecostal preacher. In 2006, she got a loan from the evangelical lender to buy a $4.5 million lakeview property in Waycross, Ga. She planned to use it for her ministry headquarters and to open a spa for beauty treatments and spiritual guidance.

But she never paid her property taxes on time and ended up owing tens of thousands of dollars, said Steve Barnard, the Ware County tax assessor, who threatened to auction off the land over the debt. The credit union paid Bynum's outstanding tax bill before foreclosing on her land last December, when Ware said the property value had dropped to only about $2.5 million.

Another church with shaky finances and a big debt: the Shiloh Institutional Church of God in Christ in Fort Worth, Texas.

The congregation began floundering soon after Shiloh's prominent pastor, Sherman Allen, was publicly accused of molesting women and beating them with a paddle. The accusers said that Allen's superiors in his Pentecostal denomination - the Church of God in Christ - had evidence of the allegations for years and did nothing to stop him. Allen has denied any wrongdoing.

Meanwhile, lawyers for the credit union that holds the church's mortgage found another scandal - this one involving money. In court documents, the attorneys said the church could not explain how it spent $100,000 in income in 2006, that a $30,000 anniversary bonus paid to Allen in 2007 "is potentially a fraudulent transfer," and that the church couldn't provide financial statements from a certified public accountant for 2005 and 2006.

The church filed for bankruptcy in February 2007; the Evangelical Christian Credit Union says Shiloh owes it nearly $3.8 million on a 2005 loan, and sought to foreclose.

As in the residential mortgage industry, tight credit has had a chilling effect on loans to houses of worship.

Reid, the head of Strongtower, said his company is doing less lending, but he would not discuss specifics.

Johnson, of the Evangelical Christian Credit Union, said the company isn't making loans to new clients.

"We're struggling to do a good thing for our community," Hicks said. "Hopefully, we'll get past this impasse and move forward."