calendar January 29, 2014 in Congregations, Finance

It Pays to Collaborate

The 11 congregations of the Northeast Philadelphia Conference saved over $16,000 during a six-month period by working collaboratively to purchase insurance through one agency then negotiated with an insurance company on their behalf.

“The pastors would do text studies and then talk about how they saw their congregations struggling to be sustainable and thrive,” said Pastor Ben Krey, dean of the conference and pastor of Prince of Peace Lutheran Church. “The model of separate congregations was not working.”

So in 2010, the conference gathered 60 to 70 leaders to start imagining what they could do together. They formed three task forces: Worship, Service, and what was eventually named the Resource/Stewardship group whose mission was to steward their buildings and resources as they moved into the future.

Rich Soltan, a member of both St. Timothy Lutheran and the conference Steering Committee, knew that congregations of the Presbytery of Philadelphia had collaborated to purchase insurance through one agent, reducing their costs. They decided to explore the savings the conference might see by working cooperatively.

Soltan contacted Jeff Beers, senior account executive with Sovereign Insurance Group which specializes in insuring non-profits and houses of worship, about a developing a “Master Program” similar to the one the Presbytery of Philadelphia has had since early 2000. Approximately 95% of the 90 congregations of the Presbytery are involved in that program.

“When you get into a Master Program the pricing structure changes,” said Beers. “It requires the approval of the judicatory and enough churches joining together to make it worthwhile for the insurance carrier, usually about twenty to thirty congregations.”

While the conference was not eligible for a Master Program, Beers met with the North East Philly congregations over a period of 6 months to explain the collaborative process and review their policies.

“The congregations saw a savings of between 12% – 37% depending on the existing policies they had,” said Beers. “The church may not have quoted their insurance for some time so there was no real competition. We helped review their policies. There isn’t a formula to this. It is a negotiation and depends on the insurance carrier and what they are willing to offer.”

It helps when a group of congregations join together to seek coverage so the agent has a stronger negotiating position, because insurance companies ultimately want the business.

Congregations are always welcome to explore ways to collaborate to save on insurance with agencies like Sovereign, or others that offer insurance specifically for houses of worship and non-profits. Collaboration pays. — Rev. Sue Lang


Photo: Stockvault