ELCA NEWS SERVICE

November 9, 2004

ELCA Publisher Puts 2005 Hopes In New Resources, Budget Controls
04-209-JB

     MINNEAPOLIS (ELCA) -- The board of trustees for Augsburg
Fortress, the publishing ministry of the Evangelical Lutheran
Church in America (ELCA), adopted an operating budget which
projects a net income loss that could reach $2.3 million for
2005. The trustees met here Oct. 21-23.
     However, the trustees are hoping the plan -- combined with a
series of new resources for sale, spending reductions and close
budget control -- will propel the ELCA publisher toward break-
even or better for the first time in several years.
     Board members and staff expressed many concerns about the
ELCA publisher's financial situation.  Augsburg Fortress'
management projects an operating loss of $1.85 million and a net
loss of $2.2 million for 2004, said George W. Poehlman, Augsburg
Fortress vice president for finance, in a report to the board.
In 2003, the company's net loss was $3.5 million.
     "My message is this: we've made progress, but we have not
made as much as we hoped for or as much as we needed to make,"
Poehlman said to the board.  "We cannot continue to do this on a
loss basis.  We have to find a way to generate revenue to stop
the losses."
     Some trustees spoke in support of the budget and management
team, saying they believe the company is in its best position in
years to get its finances in the black. In adopting the 2005
budget proposal, the trustees asked the board's audit and finance
committee to work closely with the company's management and to
keep the full board informed regularly about the company's
financial progress.  One member voted against the budget
proposal, saying he was "not comfortable" in adopting a budget
with a projected net income loss of $2.3 million.
     Sales are behind forecasts in such key resource areas as
basic church supplies, Sunday School materials and worship
materials, Poehlman said.  By contrast, Fortress Press, the
company's academic book line, its operation in Canada, The
Lutheran magazine and the "Lutheran Voices" book series, are
doing well this year, he said.
     Beth A. Lewis, Augsburg Fortress president and chief
executive officer, said the company's lack of financial progress
is puzzling because she frequently hears from  ELCA members and
leaders about the company's improved resources and customer
service.  Particularly frustrating, she said, is that many
congregations are not buying "staple" items from Augsburg
Fortress, such as offering envelopes, communion supplies, candles
and other necessities, yet Augsburg Fortress prices are
competitive with other suppliers.
     "We are so frustrated because we know, based on affirmations
and accolades, that we're doing a lot of things well.  And it
(higher sales) is not happening," she told the board.
     Now in her third year as Augsburg Fortress president and
chief executive officer, Lewis said she has worked in publishing
"turnaround" situations before.  The staff is "pretty stressed"
that the company's financial situation is still lagging, she
said.
     Most board members agreed that Lewis and the company's staff
have done everything they could to turn things around.  Lewis
emphasized that for 2005 the publisher will focus on sales of new
resources, spending reductions and greater advocacy for Augsburg
Fortress materials by key leaders in the church.

Board members Must be Advocates, Lewis Urges
     In her report to the board, Lewis asked the trustees to be
advocates for Augsburg Fortress.  She gave them written examples
of how the company has changed, and how it has improved its
resources and services.
     Lewis said the ELCA publisher is positioning itself as the
church's "publishing ministry" versus the long-used phrase
"publishing house."  The use of "house" seemed to separate the
publisher from the ELCA, Lewis said.  As a ministry of the
church, Lewis said "it sends a very strong message about who we
are."
     Among the other examples she cited were:
     + Augsburg Fortress sales of its 2004 Vacation Bible School
(VBS) resource, "Davey and Goliath's Camp Creation," were up 26
percent over the previous year's offering, marking a success in
VBS resources for the first time in several years for the
company.  Meanwhile, sales of VBS materials offered by many other
church denominations declined in 2004, Lewis said.
     + More than $212,000 has been raised through a Camp Creation
unit aimed at providing funds for deep tube wells in Bangladesh,
emphasizing the ministry the publisher can provide.
     + More than 99 percent of orders Augsburg Fortress receives
are shipped within 24 hours from the company's distribution
center in Grove City, Ohio.  That beat the service offered by
companies from which many people order books, clothing and others
goods, Lewis said.
     + In the past 15 months Augsburg Fortress has made more than
700 downloadable resources available for sale at
http://www.augsburgfortress.org on the Web, a direct response to
customer requests.
     + The company will offer a speakers' bureau consisting of
staff and authors for synod assemblies in 2005.
     "We need more people to speak who will help us tell the
story of what we've done," James Myers, board chair, Kailua,
Hawaii, told the trustees.  "That's a critical role for you as
board members."

Less Spending, New Resources Planned for 2005
     By December 31, Augsburg Fortress will leave the customized
ecclestical arts business, Lewis reported.  The custom studio,
located in Philadelphia, is for sale, she said.  Very low margins
forced the management team to make the announcement in September,
Lewis said.  Augsburg Fortress will continue to offer paraments,
robes and other ecclesiastical arts materials made by other
companies, she said.
     Augsburg Fortress is combining multiple databases to support
subscription fulfillment, another cost-cutting move, Poehlman
said.
     The savings, combined with new sources offered now and next
year, is important to the company's future.  New resources
available include:
     + "Davey and Goliath's Circus Spectacular," a new VBS
offering for 2005 that builds on the company's successful 2004
offering.
     + "No Experience Necessary," a Bible study resource authored
by the Rev. Kelly A. Fryer, assistant professor of congregational
leadership, Luther Seminary, St. Paul, Minn., and author of the
first book in Augsburg Fortress' "Lutheran Voices" series,
"Reclaiming the 'L' Word," published in 2003.  The new Bible
study will be released March 28, 2005, and will be introduced at
2005 ELCA synod assemblies.
     + Beginning Nov. 29 "Splash!" resources will be available
for early faith formation in children from birth to age 3.  A
Splash! newsletter is offered to families of young children to
help maintain church connections.
     + The "Lutheran Handbook" -- available in spring 2005 -- is
a field guide for all things Lutheran and will be available for
congregation members and prospective members.  The handbook will
be a component of a new Web and print-based Confirmation resource
available in August 2005.
     + Provisional worship resources are available to
congregations, and if the 2005 Churchwide Assembly approves a
plan for the church's "Renewing Worship" project, a new ELCA
worship book is expected to be available in the fourth quarter of
2006.
     "I am most excited about these new resources," Myers said in
an interview with the ELCA News Service.  "That's exciting, and
they have long been needed.  We're into new territory, and that's
what Augsburg Fortress should be doing."
     Board members discussed proposals to restructure the ELCA's
churchwide organization and governance as most churchwide boards
have done this fall.  They also discussed a preliminary report on
a churchwide communication plan, requested by the Rev. Mark S.
Hanson, ELCA presiding bishop.  Hanson is expected to discuss the
report with a committee of the ELCA Church Council when the
council meets this month in Chicago.

For information contact:
John Brooks, Director (773) 380-2958 or [log in to unmask]
http://www.elca.org/news