November 16, 2012
Family Christian Bookstores -- Private Equity, Mission Drift and the Religious Corporation
Posted by Christine Hurt

A couple of years ago, I was fascinated to learn the behind-the-scenes story of Veggie Tales, as recounted in Me, Myself & Bob by Phil Fischer.  Fischer started Veggie Tales with funds from friends and family, then eventually took on funding partners, creditors and a leadership team that pushed Veggie Tales away from its original Christian-based mission to one that became more secular but no more financially stable.  Vischer eventually lost Veggie Tales in bankruptcy court, when it was purchased by a secular bidder.  In my microfinance class, we talk a lot about the differences in for-profits and nonprofits, if there is any, and mission drift.  I received an email today from Family Christian Stores, the world's largest Christian retailer, that seemed to suggest that management at FCS was fighting against mission drift, at least from now.

FCS' press release is here.  FCS is a privately owned (private equity-backed) company that has stores nationwide that sell Christian bibles, books, decorations, jewelry, DVDs and music (including Veggie Tales).  Now, FCS' management and three outside purchasers have joined together to buy back FCS from its private equity owners.  In doing so, the new owners have pledged to recommit to their mission and give 100% of the profits to charity (instead of the 10% it was earlier).  From a law professor's perspective, however, I'm interested to know whether (and why) it is maintaining its for-profit status.  At first glance, it seems like being a nonprofit would serve the same purpose as giving away all profits.  The nonprofit could either funnel surplus to charitable uses or reduce the cost of its religious wares (which would probably be tricky with vendors).  Here, the charitable purpose is outsourced to a number of external ministries.

This article from Christianity Today links to earlier articles chronicling the mission drift of Christian bookstores and FCS in particular.  This link is to an article debunking FCS's rationalization of its move to open on Sundays (presenting religious reading material as necessary in spiritual crises that may arise any day of the week).

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