The establishment of the MB conference RRSP program
In the early 1980s, when the Canadian government amended taxation rules, God put people in place who would launch a program, unique to the MB church, that would make millions of dollars available for church planting and growth across Canada.
Accountant George Kroker from Willow Park (MB) Church in Kelowna, B.C., has a motto: “If you can use the tax system to help charity, you should do it because that’s part of stewardship.”
George has taught many not-for-profits and their supporters how to use the Canadian tax system to increase donations. The busy private accountant would become a key visionary in the establishment of Mennonite Brethren stewardship ministries as a catalyst for church growth in Canada.
In 1979, the Canadian conference received a letter from the Alberta conference: “We are becoming very dissatisfied with keeping the gospel to ourselves. We must reproduce ourselves in vital young churches…. The high cost of land and building presents a problem. A newly born fellowship of believers finds it almost impossible to acquire a facility to meet its needs. Many churches that have been built in Alberta in the last 10 or 15 years are paying back loans, with interest. [We need] strategies for funding church planting building projects and the creation of a fund to finance initial grants to new churches.”
“We were under the gun,” recalls Walter Kehler, then chair of the board of trustees and the conference’s legal counsel for some 40 years. MBs were “looking at big church plants in major cities; the rules were a lot different and the costs way higher. There was no quick way to press a button and get money.”
I dare you!
William (Bill) Schmidt, stewardship ministries’ first field representative, gave a presentation on financial planning at George and Nell Kroker’s church, Valleyview Bible in Kamloops, B.C. Growing up together in Coaldale, Alberta, in the ’50s, George and Nell attended German school Saturdays under Bill’s tutelage, so on that spring Sunday in 1980, they invited their old teacher to stay at their home.
Bill told them about churches’ expansion dreams, particularly Willingdon Church in Burnaby, B.C., the first MB church with a mortgage beyond $1 million, and about the increasing difficulty of financing churches. New construction and larger churches needed more than the conference’s endowment fund could handle. The well was “going dry,” Bill confided.
The need pulled at George’s passions: “Deep down, it was the fact that why should banks profit from this if we have the resources within our own body to do this? We can help each other!”
George ventured, “Would the conference be interested if I could show them how people could use their RRSP money to finance the churches?”
Bill smiled. “Is that legal?”
The Canadian government had just amended taxation rules to allow investments in Canadian first mortgages. George assured Bill his idea was legal, but he’d have to do some research to see if it would work for mortgages on churches.
“We’d be interested, if you could come up with something.”
“It was like a dare,” recalls George. George toyed with the idea, bouncing around scenarios in his head. But his clients kept him occupied.
Thank heaven for bell-bottom jeans
Labour Day 1980, God “intervened” in the accountant’s busy schedule.
George and Nell were installing Arborite in the basement shower. They’d just painted the final sheet with contact cement, when Nell yelled, “Fire!”
They’d turned the gas furnace off before they started, but forgot to shut off the pilot light on the dryer.
George, hemmed into the shower by burning Arborite, yelled, “Get the kids out of the house!” He jumped from the shower, grabbed the fire extinguisher, pulled the pin, but turning around to put the fire out, he saw “a great big wall of fire, thundering, blowing the ceiling tiles out. It was just horrifying.” George dropped the extinguisher.
Nell cried, “Your pants are on fire!” Thanks to his nylon socks, George’s ankles had third degree burns. “Fortunately he had bell-bottom jeans,” explains Nell. “If he’d been wearing polyester pants, it would’ve been a whole lot worse.”
Nell was just able to call the fire department before the phone lines burned. The Kroker’s house sat on a hill – with 27 steps to the front door. When the ambulance arrived six minutes later, and the paramedics said, “We can’t get the stretcher up here,” George walked down 27 steps in his undershorts, socks melted to his feet.
The Krokers lived in a hotel while their house was repaired. George met with a few clients, but between that and homecare, all he could do was lie around.
George remembers thinking, “I’ve got nothing to do but think about the RRSP program: here goes!” While some might question God, Nell says her husband joked about the experience shortly afterward.
“To me, it was a funny thing: here I am burned, I can’t go to work, I’m supposed to take it easy – what am I going to do? I had all these ideas in my mind; I just hadn’t put them to paper yet.” George concluded, “I guess God put me here because he wanted me to write this stuff down. ‘Well, God, if that’s what you got to do to get me to finish it off…’”
Within weeks, from his hotel room, he’d written a letter (dated Sept. 22) to Jake Riediger, treasurer of the Canadian conference, with details of an RRSP proposal that could represent a needed “new approach” to raising funds – moving beyond only collecting donations to managing investments that could be reinvested for long-term church and financial growth.
George was back on his newly grafted feet and meeting clients at his office by Thanksgiving. With a Revenue Canada employee’s verbal approval for his idea, he flew to Winnipeg Oct. 14, 1980, to meet Jake and make plans.
“I sensed he had a real heart for the church,” says George. “He was willing to step up and try things.”
Jake and the board of management had been pursuing the creation of a donor foundation since 1978; to meet long-term growth needs and the challenge of inflation, a pool of capital funds would be invested and the income applied to conference programs, but the plan had met with resistance. Walter Kehler, board of management member at the time, recalls: “The difficulty was that some said, ‘Either you support the church or you don’t; just putting aside money that will sit there for a long time slows our growth.’”
Walter says the beauty of George’s plan was that “it was setting aside money people were putting away for retirement anyway.” Church members could simply switch their investments from the bank to the conference.
According to Jake’s correspondence, a “very enthused” board of trustees approved the RRSP plan Dec. 1, 1980.
The pieces fall in place
As an accounting partner at KPMG, George had worked closely with Alex Chisholm, a trust officer at National Trust in Kamloops. When George explained his idea, Alex responded, “Yeah, that should work – and National Trust would be interested.”
In Winnipeg, Walter, who was overseeing the legal aspect of the RRSP program, also had a connection: he was National Trust’s solicitor, and their offices were across the street.
“There was no question that God had to be in this thing,” says George. “Because how else would we end up with myself, Alex Chisholm – an Anglican, and Howard Holst – manager of National Trust in Kamloops who eventually becomes manager of National Trust in Winnipeg and handles everything?”
Like Alex, when George met with Howard about using RRSPs to fund churches, “We didn’t have to sell Howard on it; he was sold before we got there.”
The speed bump arose when George was sent to Bob Jarman, with National Trust in Toronto, who “put a kibosh on the thing.” Bob had experience setting up RRSP programs for charities – a bad experience. A similar program he’d created for another church conference fell apart due to insufficient involvement from investors. Jarman’s message was: “We’ll put a lot of work into this thing, and then it will go the way of the dodo bird. You’ve got a great idea, but it just doesn’t work in the end,” recalls George.
But Alex and Howard promised, “We’ll get on his back!” They phoned George to say, “Jarman is coming to Calgary for a meeting. Would your guys be willing to go to Calgary?” George flew from Kamloops, and Jake and Walter flew from Winnipeg, to meet Jarman at his hotel for breakfast Aug. 28, 1981.
How big is this thing?
Bob looked at his watch: “Tell me quick: Mennonites – who are they?” George explained there were MB churches across Canada, not just in B.C., and that the Canadian conference had a line of credit for church mortgages that couldn’t meet the demand.
Bob asked, “How big is this thing – the MB conference?” Walter shocked him with the statistics: nearly 22,000 MB church members.
But how much money would they foresee in the fund, Bob wanted to know. George responded, “Between myself, a few other board members, and our families, we have $7–800,000 that would go in the moment this is ready.” George remembers, “He was absolutely astounded.” George told Bob, “My guess would be in the first 18 months we would have no less than $1.2 million,” and after five years, it could reach the $5 million mark.
“It blew his mind that we could gather that support across the country on some unified basis.” At that point, says George, “We were off to the races!”
Why would I take less?
At the 1981 convention in Sask-atoon, George presented the plan, explaining how most RRSPs through banks are invested in mortgages for properties that we as investors know and care nothing about.
“When I thought about this for a moment, I could hardly contain my imagination,” he told delegates. “Why could we, as Mennonite Brethren, not set up a plan where we could direct the trustee to invest the funds in mortgages on church properties?”
“When I see that I can save on my income taxes and, at the same time, help fund the Lord’s work, my enthusiasm grows even larger. As Mennonites we have been forerunners in areas such as health, burial, and benevolent funds – why not funds for our capital projects within?”
The 1980s was the perfect time for the conference to offer churches loans at a lower rate than they could receive at a bank, and a great time for investors: the rate for stewardship ministries’ first RRSP holders was 13.74 percent. However, George recalls one delegate in 1983 confronting him with “Why would I ever put my money into this thing and take less than I could get if I go buy a term deposit?”
George’s answer was “Because this is the Lord’s work and you’re assisting to fund churches. You’re doing RRSPs anyway; what are you giving up? “For where your treasure is, there your heart will be also.” (Luke 12:34).
The wheel that got things turning
Current conference CFO John Wiebe says from the start till 2000, “Stewardship was an RRSP program.” Although the current program looks “substantively different” than what Walter, George, or Jake may have imagined (today, RRSPs represent only about a quarter of the monies invested with the Canadian conference), John calls the RRSP program “the wheel that got things turning.”
Today, stewardship ministries has more than $60 million on loan to churches across Canada, an ambitious program that started with churches like Willingdon. Walter Kehler says that, again in 1992, “They wanted to borrow $4 million from us. After much thinking and praying and being concerned, we gave it to them.”
Walter recalls some of his predecessors on the board of management asking, “What are you guys doing? This fund was supposed to be for small loans. You’re not in the finance business!” But Walter knows they made the right decision: “Growth was happening, beyond what people realized. And, of course, as it turned out, the Willingdon project did quite well, thank you!” In 2011, the Burnaby church – celebrating its 50th anniversary – has an average attendance of 4,000, and in 2010, returned $380,000 to church planting efforts in B.C.
Walter and John regularly field questions from other charities about the MB conference RRSP and deposit programs. John, who encourages his stewardship reps to tithe their time to other denominations, acts as “volunteer stewardship director” for other nonprofit organizations, helping them get similar programs off the ground.
“We pioneered the RRSP idea for other charitable organizations in Canada,” says Walter. George always knew, as a family of churches, “if we believe in this thing, we can make it work.”
A God thing
George retired from public practice in 1998, and he and Nell moved to Kelowna in 2003. They spend their summers in an RV volunteering at Christian camps across North America. George continues to offer free tax advice to charities, and whoever else will listen.
Alongside saving people’s businesses – and their dignity – George counts his part in the conference RRSP program as one of his greatest accomplishments. “It’s one of the things that you look back on and say, ‘I’m really glad I did that.’ I survived, and the conference survived. It all worked out.”
Nell smiles, “We always thought it was a little bit of a ‘God thing’ to lay him low.”