City Harvest Saga continues. Analysis into the wealth of City Harvest Church (part 2)

It has been two years since I wrote an analysis on the wealth of City Harvest Church (CHC). This week, news broke out that the Pastor has been arrested over alleged misuse of church funds. It is really amazing that the most fervent defenders of the Pastor are the very victims whom he was alleged to have abused - the stakeholders of City Harvest Church. A business with such loyal following among its stakeholders can easily survive adversities. From this single characteristics springs forth strengths that I shall outline in the subsequent paragraphs. Again, please read this article as a business analysis and not an insinuation that CHC is acquiring wealth through questionable means. I apologize upfront if some readers are still offended.

My observation of events that followed after the arrest has reaffirmed my belief on the wonderful business characteristics of CHC. In addition to the 14 points raised in my first article, I have more to add here;

15. Extremely forgiving customers who will keep coming back for more no matter what

CHC members have taken plenty of battering from the public this week. The moment a person reveals he is from City Harvest Church, people will look upon him like a brain-washed idiot who is unable to see the obvious "truth" (verdict is not out yet, so nobody knows the truth. Wait for Pastor to tell his side of the story first).  The mere association with CHC brings embarrassment.

When a business has such a firm grip on its customers that they refuse to go away despite suffering lots of abuse, this business is on solid ground.

Any business(even reputable ones) that has been in existence long enough will eventually make a big screw-up or even get indicted in scandalous frauds. However, if that business has loyal and forgiving customers like CHC's, it can be assured that its customers will probably keep coming back. It is very hard to erode its customer base as they can take a lot of beating before saying goodbye. Such a business is certainly built-to-last.

16. Very easy to raise money from loyal and trusting shareholders

CHC has a special characteristic in that the customers are also the shareholders because CHC raises funds from its church members.

In my first article, I concluded that if CHC were listed on the Singapore Stock Exchange, I will surely buy it. With the benefit of hindsight, some netizens sneered at this conclusion. They said that I would have lost lots of money this week if CHC were listed as a stock. If CHC were an average business, I would certainly have lost my pants. Most stocks would have crashed on allegations that the Founder has defrauded its shareholders. Shareholders will sell first and ask questions later. Not CHC. Its loyal and trusting shareholders will probably buy on the dips/crashes and no need to ask questions at all. Their faith alone in the company is enough.

With such loyal shareholders, it is very easy for a company to raise new funds for future expansion. It can set up building funds to buy new buildings to house its ever-rising membership. In fact, this was exactly what CHC did 2 years ago when it bought Suntec City.

17. Highly motivated and loyal employees who will work for little money with great passion

City Harvest Church has a unique stakeholder characteristic. The extremely loyal customers and shareholders as mentioned above are also the same group of people who are the employees. Therefore, it naturally follows that CHC has a very loyal team of employees.

HR departments like to say our greatest assets lie in our human resource. Nothing can be more true when this is applied to CHC. Some CHC members (or employees) work as volunteers for little or no money but carry on their work with great passion and sacrificial spirit. Internet stories abound on how much personal time some members devote to church activities. It is a compliment to CHC members on their self-sacrificial spirit in volunteering their free-time for church work (provided they do not neglect their earthly family duties).

These dedicated volunteers are not paid a salary but perform essential operations for the church. This results in tremendous cost savings for operating the company. The company does not need to pay for this voluntary workforce and yet enjoy amazingly high staff morale. I challenge readers to find me another company in the world with such an amazing workforce. Where can you find a passionate voluntary workforce who not only are not paid a salary but actually are encouraged to pay until tears stream down their cheeks in order to have the privilege to work for the company? Little or no salary, high staff morale, work with passion and dedicaion, even pay to work ... WOW!!

The heavy commitment and sacrifice put in by the employees serves yet another advantage to CHC. The more time and money and sacrifice a person puts into an endeavor, the harder it is to let go when the turn of events suggest that he may be wrong. Once he has invested too much, it becomes very hard to "cut loss". A person faced in such a situation may resort to self-denial as a form of psychological defense mechanism to protect himself from facing the pain of meeting reality head-on. It is this defense mechanism which plays an important role in strengthening employee loyalty to the company in crisis times.

CHC enjoys another advantage with the employee pool. In 2010, 47.3% of its members are below the age of 25 and the majority are young professionals aged 25 to 35. The young workforce injects awesome energy and dynamism into the business at little or no cost because they are mostly volunteers.

Having a young membership works towards enhancing corporate loyalty for a church business. When it comes to transmitting a set of beliefs, it is preferable to start with the young as it is easier to shape and mould young minds. Some friends have jokingly suggested starting an Internet church preaching prosperity gospel to get rich (let's ignore the morals of such an enterprise for the sake of discussion).It will not work. To have a firmer grip on the minds of its stakeholders, the church should ensure that members' lives revolve around the church. The more social interaction, the more time/effort put in, the lesser exposure to outside influences from other churches (or even disapproving parents), the tighter will be the bonds. Left alone in front of the computer, people are more discerning and analytical without social pressures from the crowd. Just a few simple searches on Youtube turns out videos highly critical of Prosperity Gospel.

http://www.youtube.com/watch?v=ymBzhmaou7U&feature=related
http://www.youtube.com/watch?v=82owdNdAy58&feature=related

Full-time CHC employees are loyal for a good reason. They are very well rewarded financially. Although CHC is registered as a charity, in the 2008 financial statement, CHC distributed $2.9m out to charity and spent 3.2 times more ($9.29m) on its own employees. This will motivate its volunteer workforce to work hard to get a chance to join its full-time staff.

To sum up, with the extremely loyal team of employees, shareholders and customers, CHC as a business is unbeatable.

18. Need not incur any expense to deliver on customer promises

This business characteristic distinguishes City Harvest from all other businesses I have encountered. If a customer entrusts huge sums of money to a bank which promises 30-fold, 60-fold, 100-fold returns and the bank does not return a single cent, the customer can sue for fraud. If a Prosperity Gospel church makes similar promises and fails to deliver, the customer will have to die first and find out the truth on Judgment day. In the mean time, the Church can cite the Bible story of Job and tell its followers to be patient. Better still, a sharp businessman can turn adversity into opportunity by telling its followers the reason they are not prosperous is that they have not given enough to the Church. Did you give until your heart breaks? Did you give until tears stream down your cheeks? If not, do not expect God to repay you with prosperity in Harvest proportions.

The CHC business is able to collect revenue on a service offering that does not require expenses to be incurred in its development. Even better, if delivery quality falters, tell the customer it is his fault because he did not pay enough. The customer has no way to verify on this claim. He probably will pay more eventually. What can be more wonderful for a business than that?

PS: Throughout history, religious organizations have a strong controlling power over their followers because they can make claims that cannot be proven (obey me and you shall go to Heaven), promises that need not be delivered (give me and you shall be prosperous) and threats that cannot be verified (defy me and you shall go to Hell). Under such uncertainty, even intelligent people lose their critical faculty to discern out of fear and greed. Christian crusaders were told they will go to heaven if they die in war. Same goes for the Muslim terrorists. More than a thousand years ago, the Roman Catholic Church claimed it could forgive sins on behalf of God so that rich donors can enter the Kingdom of God if they donate enough money to the Church. Behind every great fortune probably lies a great sin, this was great business.

Who knows for sure if they are right? There is no way to know until Judgment day. What we can be sure is that the interpretations of the holy book certainly suits right for those manipulative and self-serving religious leaders (who are exceptions rather than the rule). I believe religions are good with the best of intentions for their followers. Having a religion has its advantages but be mindful of manipulation by people who use religion as a tool to advance their own interest. I have no doubt these people truly believe in their own message, otherwise they could not have been so convincing. Intelligent and even kind people have a way of inventing reasons to convince themselves to justify means that benefit themselves at the expense of others. All of us are guilty of this sin to some extent, including myself.

We are blessed by God with a brain to think for ourselves. European civilization was held back by their religious leaders because they let the religious leaders do the thinking for them for the benefit of the few at the expense of the rest. Try to think freely but fairly for yourself. We can interpret the Bible our own way if we feel uncomfortable with that of our religious leaders. Why should I donate 10% of my income if what is left is insufficient for my parents and personal savings? Instead of 10% of my revenue (salary), would it be better if it were 10% of free cashflow (salary - necessary expenses for my earthly obligations and survival)? In all fairness, family obligations have to come before the church. It is not fair to our parents if we give more money to the Church than them.

I cannot agree with the Prosperity Gospel. It insults my concept of a loving God. If a God who claims to love me rewards me only after I have to give until my heart is broken, then He is lesser than my parents who has been giving to me starting from the moment I was born even before I knew how to give at all.