Church of Chicago
Founded in 1871 when the congregations of Westminster Presbyterian and North Presbyterian Church merged. On October 8th of that year the Great Chicago Fire destroyed Fourth Church’s first worship space the very night the young congregation dedicated their new home. The current building was designed by Ralph Adams Cram and opened for worship in 1914. Fourth Church is now the oldest structure on Michigan Avenue north of the river.
A prior Executive Associate Pastor (Chief Operating Officer of the Church) became interested in having NCRC evaluate and possibly reduce costs within the church. This task was delegated to an interim Finance Officer and then to the Director of Finance. With new leadership and as a prior CFO of a major corporation, NCRC was challenged to identify 11 expense categories and negotiate expense reduction with current and potentially alternative suppliers. Fourth Church staff did not have the time, the negotiating skill sets, or the knowledge of industry trends and item costs. Their challenge to NCRC was that they would be interested in our expense reduction evaluation and forecast providing it did not take their time and did not conflict with the mission of the church.
National Cost Reduction Corporation Approach
NCRC followed its five meeting cost reduction process which is as follows. Meeting 1 – Introduction and Overview. Meeting 2 – Completion of expense worksheet which identifies categories to be evaluated, suppliers names and approximate annual expense. From this worksheet NCRC develops a forecast of expense reduction. Meeting 3 – NCRC presents to prospect forecast of savings and documents to be approved and signed for moving forward. Meeting 4 – Approved and signed documents are given to NCRC. NCRC makes copies of specific supplier invoices to begin apples to apples benchmarking. Meeting 5 – (8 weeks later) NCRC presents documented and approved Findings and Recommendation Report which includes documented conversations with each supplier. The excel spreadsheet which accompanies this report details to the item description level previous and new lower costs. NCRC submits first invoice. Updated audits are conducted at 4, 8 and 12 months during year one.
Because of effective cost reduction management, annual savings to Fourth Presbyterian Church were just over $40,000. Additional savings in future years were achieved by evaluating and changing suppliers in the document management category. With over 27 copiers and printers throughout church offices the savings and process improvement in this category were extremely meaningful. Another category of large savings was in reducing security expense.