Tuesday, August 29, 2006

The Corporation and the Presbytery

Everyone in Presbyterian circles has heard of “renegade” congregations being “taken over” by their Presbytery.

It was many years ago and I was attending my first Presbytery meeting following my ordination. During the Committee on Ministry section of the meeting it was reported that an administrative commission had gone to a particular church, disbanded the session and started procedures to fire the pastor. You see, this church had refused to ordain women elders and deacons.

Kirk of the Hills, in Tulsa, Okalahoma, is in the process of leaving the PCUSA. The session has voted to leave the PCUSA and join the Evangelical Presbyterian Church. A congregational meeting has been called for the church to vote on that action. The pastors have renounced jurisdiction of the PCUSA. Kirk has done something that is brilliant! The Trustees of the Kirk of the Hills Corporation has hired the pastors to lead the corporation and the congregation that is no longer a part of the PCUSA!

Why was this a brilliant move? Most local churches are not-for-profit corporations in the state where they are located. The corporation elects trustees to run the corporation. The Presbytery is not a voting member of the corporation! They have no jurisdiction over a separate corporation! (I am not a lawyer, so this is not an official legal position.)

At the end of each year my wife and I get a statement of our giving record from the church. We are able to deduct this amount from our taxable income because we have given it to a not-for-profit corporation. People give to the United Way and can deduct it from their taxable income because the United Way is a not-for-profit corporation. Locally, people give to the Associated Ministries of Pierce County. They can deduct their giving from their taxable income because the Associated Ministries of Pierce County is a not-for-profit corporation. The same could be said for the Red Cross, Habitat for Humanity, Green Peace, the Republican or Democratic parties, etc. (Note: I am not an accountant or lawyer so check with your tax advisor to get tax and legal advice.) Can the PCUSA go in and take over the United Way? Of course not, the United Way is a separate not-for-profit corporation. Can the PCUSA take over Habitat for Humanity? Can they take over the Red Cross?

This move raises some important questions. Does the corporation own the property or does the “church” own the property? (It would seem that if the corporation owns the property then as long as the corporation keeps functioning the corporation would be able to maintain ownership of the property.) Does the corporation “own” the corporation assets? (If so, it would seem that the Presbytery has no legal standing to come in and take control of the bank accounts and investments.) Corporations can hire and fire.

The Kirk of the Hills actions may be a defining point in the history of the PCUSA.


At 9:59 AM , Blogger Quotidian Grace said...

I agree that the Kirk of the Hills strategy in their withdrawal is interesting.

The PCUSA is legally similar to a franchise -- like McDonalds, for instance. An individual may own a McDonalds restaurant, but has a contract with the national franchise corporation that specifies how the restaurant is to be operated. Similarly, the congregation's nonprofit church corporation owns the church's property and must operate the church's religious and business affairs as specified in the BOO.

The difference is that a PCUSA church owns its property "in trust" for the PCUSA. So the property is encumbered with a trust interest. That trust interest, together with the implied contract to abide by the BOO, is what gives the denomination the right to make a claim on the property.

The PCUSA's legal interest is pretty clear when it comes to churches like mine which were organized after reunion and under the current BOO which specifies that our property is held in trust for the denomination. It's not so clear when it comes to churches that were organized under some predecessor of the current denomination.

For example, the St. Johns Island church in S. Carolina was organized 300 years ago--before there was any type of Presbyterian national structure. Suppose they voted to withdraw from the PCUSA. Would a court find that they gave a "trust" interest to the PCUSA when there was no such provision at the time they were created? You'd have to know all the facts and circumstances of the church's relationship with all the predecessors to the PCUSA to get the answer to that.

Sorry, I didn't mean to write such a long comment, but I wanted to point out the complexity of church property disputes.

At 10:36 AM , Blogger Pastor Lance said...

I agree that the trust part of the BOO deals with the property. What I think is intersting is the part about the presbytery coming in to remove a session. They do that authority in the BOO. Do they have the authority to remove the Trustees of a corporation? I don't know...

At 11:29 AM , Anonymous will spotts said...

I also find this an interesting strategy to attempt.

I'm waiting to see how it plays out. The meeting tomorrow should be interesting. Most corporations have meetings of the members - in my church the corporation meetings are essentially congregational meetings. I wonder if they would have to ratify the decisions of the trustees?

At 11:30 AM , Anonymous will spotts said...

I also find this an interesting strategy to attempt.

I'm waiting to see how it plays out. The meeting tomorrow should be interesting. Most corporations have meetings of the members - in my church the corporation meetings are essentially congregational meetings. I wonder if they would have to ratify the decisions of the trustees?

At 1:16 PM , Blogger Quotidian Grace said...

For what it's worth, under Texas law the annual meeting of the congregation is the annual meeting of the church corporation. State corporate law can vary, but probably that's also true in Oklahoma.

At 2:09 PM , Anonymous xtrsk33r said...

At our annual meeting we hold both. First the meeting of the congregation,it is adjourned, then the meeting of the corporation. Each section is announced and has a different moderator.

At 8:39 AM , Anonymous Jon Thomasson said...

QG -- I appreciate your lawyerly mind. But I think the BoO really doesn't apply any more where the denomination is involved because the denomination itself has already broken the covenant/contract represented in the BoO. It could be argued that any such violations should be fought all the way up to the GAPJC. But when the higher up you go in the PCUSA, the greater corruption you find, I find that argument uncompelling.

The denominational affiliation in the PCUSA is somewhat analogous to a marriage. The only exit Jesus allows for that covenant is in the case of adultery. The adulterous affair with the Spirit of this World has happened and the OGA and synods remain unrepentant. To fight using the BoO when most of your opponents and the judges are not even sisters or brothers in Jesus just doesn't make any sense to me. I think that those who choose to stay (primarily because of comfort?) will find themselves slowly dragged down and may eventually even worship the god of their non-believing spouse.

On a lighter and more personal note, I hope the wedding goes well this weekend and that the Spirit of God is overwhelmingly present at the occasion!

At 8:58 AM , Blogger Bayou Christian said...

It was a telling point at our evangelicals meeting with the GP yesterday when he said, "if our pension and property is what keeps us together then we are in trouble" to which clergy and elders representing 12 churches said, "then we are in trouble".

read it - if we could we would be gone.


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