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May 31 2013

The United Methodist Reporter: The closing of UMR: a personal perspective

Original post at http://www.unitedmethodistreporter.com/2013/05/the-closing-of-umr-a-personal-perspective/


By Alan Heath, Publisher and CEO…

In July of 2011, I accepted the position as CEO of UMR Communications. I sought advice from three persons prior to making my decision. One said, “You would be crazy to take the job. Do you have any idea of the mountain you would have to climb?” Another counseled that based on their knowledge of the ministry that it would be a most difficult challenge, but pledged to help in any way he could. The last person was former CEO, Sarah Wilke. She spoke of the wonderful team of people and the importance of UMR’s ministry to the church.

So, I said, “Yes!”

I can say that all three persons were correct. The mountain has been an Everest. The challenge has been very difficult. And I have been blessed to lead a wonderful group of dedicated people for the last 21 months. This ministry has contributed greatly to the life of the church over 165 years. But, there are forces that have worked against the viability of this organization for at least the last 20 years, and especially in the last 7-10 years.

Alan Heath

At one time, the United Methodist Reporter in several forms served nearly 300 church and conference customers. But technology and economics have had a negative impact on the “business” side of the ministry. The story of the last 10 years has been constriction, cost cutting and seeking other sources of revenue with limited success. The organization received reprieve in late 2006 when it branched out to provide print management, order entry, customer service and fulfillment services for United Methodist Women. That relationship provided a new source of revenue and made possible more efficient usage of a significant number of our employees who were able to support the printing and mailing of the Reporter and other independent newspapers, while also providing the human resources for the fulfillment operation.

During the first 18 months of my tenure at UMR, a majority of my time was spent in an effort to make sure that we were fulfilling UMW’s needs. We worked diligently to address every issue and concern they expressed and did so with the desire to serve and support their ministry and the work of their members in numerous local churches.

So, why did they leave? That is a question that I cannot answer for sure. But I believe their leadership felt it was in the best interests of their ministry to move the business to an organization that specializes in order entry, warehousing and fulfillment. The concept of partners in ministry which drove the original relationship morphed into more of a customer-vendor relationship—not something that was ultimately beneficial to either party.

In recent days some have asked, “Did UMW’s decision kill your ministry?” The answer to that question is, “No.” If anything, the opportunity we had to serve UMW and its members allowed us to maintain our core ministry for six years longer than we may have without it. It was a great partnership, at least at first. Compared to what they were paying to maintain their own fulfillment center in Cincinnati, we were able to save UMW approximately $600,000 per year (or more than $3 million over the course of our relationship). And over the six years we worked together, we were also able to return approximately $600,000 more to support the UMW mission.

UMR employees gathered for a final group photo on May 21.

It is true that the loss of this important relationship at the end of 2012 hurt us severely by reducing revenue by 40 percent. Even with very deep cuts that included a major layoff of 15 employees and cutting all other expenses we could, we were not able to reduce expenses enough to maintain even a break-even position. The only way we have been able to sustain operations up until now was by drawing on our reserves, which are now depleted.

During the past year or so, we have been working to develop new relationships and enhance ministry partnerships with agencies of the church. While opportunities for growth from those relationships were slow to develop, we did achieve some success. But the potential new revenue from these sources would not have been enough to overcome the shortfall in the short term. And without a short term solution, there really was no long term one. Our “enemy” was a lack of two important commodities: time and money.

How Can I Help?

Over the past few days, we have heard from numerous folks expressing their sadness for the loss of our ministry while celebrating the impact that the ministry has had on their lives personally as well as in the life of the church. Some have asked, “Is there anything we can do to help?”

Yes, there are a number of ways:

• Please pray for the 26 people who are losing their jobs. We will not be able to pay those employees accrued vacation pay or any severance. This is especially troubling, as we have employees who have been with UMR for nearly their entire adult careers. Pray that God will sustain them in the grief of the loss of their jobs and give them guidance as they seek new avenues of employment and personal ministry.

• Please pray for those customers that will need to find someone else to help them fulfill their communication ministry. We have three sales people who will be offering their services on an independent basis. We encourage all who can to maintain their relationships by continuing to work with these great folks.

• Please pray that we will be granted extraordinary favor with the vendors for whom we will not be able to fulfill lease agreements. We will be returning leased equipment, but obviously will not be able to complete contractual lease terms.

• We will be working and producing up until the close of business on May 31. It will help tremendously if customers with outstanding bills can pay them immediately.

• As our business comes to a close, our financial priorities are with our employees and customers first. But we do want to be faithful with our vendors, many of whom have worked in close partnership with us for many years. Pray that God will provide the funds to help us fulfill the most critical financial obligations to employees, customers and vendors alike.

Thank you for your outpouring of concern, sadness and appreciation. We have been blessed to serve.

—Alan Heath

In an effort to determine more ways to reduce expenses, we analyzed all aspects of our ministry. We investigated the possibility of outsourcing the printing and mailing of the Reporter editions and independent newspapers. Comparing our selling price for just printing and mail preparation to the costs we would pay to an outside vendor, we discovered that it was still significantly less expensive to continue to do this work internally. Coming to this understanding reinforced the key to our operational conundrum. We just didn’t have enough ministry partners (customers) to support the direct costs and overhead for our operations.

More than likely, this was the case seven years ago. But our work with UMW gave us a temporary reprieve. It was also about that time that ministry leadership decided to branch out by providing digital printing services that would allow us to provide a broader array of products to our church customers. A digital press was leased and significant effort was expended in marketing this new capability to our church and conference customers, especially the capability to print using variable data to enhance publications through personalization.

That area of the business did provide a new revenue stream, but the projected benefits to customers and to the ministry were never fully realized. In fact, the digital printing part of the ministry has never “made money” and resulted in significant losses every month.

So, with newspaper printing contributing nearly all of our revenue, it was painful to see that we had an unsustainable situation.

I won’t recount here all of the various options we investigated in an effort to save our core ministry, the United Methodist Reporter. I do want to let our readers know that we are indebted to United Methodist Communications for working side-by-side with us over the past few months, and especially in the past few weeks, to see if there might be an option for our two ministries to integrate.

Sherri Thiel, the chief operating officer of UMCom, along with other folks from that organization, analyzed those multiple options with us with the hope they might be able to provide a means to keep the ministry going. However, they are also limited by reductions in their budgets and did not have the discretionary funds to undergird our operation. But they get our grateful thanks for trying.

So, after much prayer, the management team of UMR Communications felt they had to recommend the closure of the ministry to our Board of Directors. That is the unanimous decision the board made at their meeting, May 16.

While it may be a bit presumptuous to liken our situation to that of the Apostle Paul when he wrote to his young friend Timothy, his words do carry special meaning for our situation. Allow me to paraphrase, “For we are now ready to be offered, and the time of our departure is at hand. We have fought a good fight. We have finished our course. We have kept the faith.”

 UMR Communications
1847-2013

About the author

Alan Heath, CEO

Permanent link to this article: http://methoblog.com/3_0/2013/05/the-closing-of-umr-a-personal-perspective/

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