What went wrong?

Pat Alvarado is the first person often heard or seen during calls or visits to Promise Keepers headquarters in Denver. The cheery single mother has handled the switchboard for nearly two years. She also asks visitors to sign in when they enter the green-carpeted lobby of the modest two-story brick building, located in a low-income neighborhood just northwest of downtown. But she won't be doing that anymore after March 31. At the end of business on that day, pay will cease for all 340-plus employees as PK switches to volunteer staffing, possibly for up to four or five months, to help cope with a financial pinch (WORLD, Feb. 28).

"I love working here, and I'd like to stay, but I need every paycheck," Mrs. Alvarado says. She has lined up work elsewhere.

Seated next to her, helping to handle the phones and reception counter, is Kristine Reinbold, whose husband has a steady job. They have prayed about the matter, she says; they want to "do what God says," and there are only two people in the Reinbold family. She intends to stay on as a volunteer, but hopes the payroll can be reinstated quickly.

Pain mingled with hope was evident everywhere late last month, from the executive offices upstairs to the downstairs cubicles of conference organizers and support people. Of the 10 mid-level and senior executives interviewed by WORLD, the majority said they are committed to staying as volunteers. Several added they likely would have to secure part-time jobs to make that possible. A few said they and their spouses still are discussing and praying about what to do.

Some workers expect a miraculous turnaround at the nation's largest and best-known men's ministry. Roderick Marable, 38, who attends a Pentecostal church, is one of them. The strapping, good-humored single man has worked in marketing and research for a year. "I'm going to stick it out. The Lord brought me here for a reason," he said. "I believe God is going to do something that will blow off our socks. We'll see unity and support as never before."

The reason no one will get paid is that PK founder and chief executive Bill McCartney, facing news of financial trouble, pledged last November that if one person could not be paid, no one would be paid. In announcing the mass layoff Feb. 18, he and other executives summarized their predicament: Income had been in steady decline for months; expected major donations had not materialized; and no cash flow would be available from the advance $60 registration fees formerly charged the hundreds of thousands of men attending PK's two-day stadium conferences.

Projections showed there would not be enough money to make payroll after March 31. Mr. McCartney, who left a $350,000-a-year job as head football coach at the University of Colorado in 1994 to head PK full-time, said the eight-year-old ministry would have to do what it did in the beginning: Look to volunteers to carry the ball until further notice.

News of the stunning reversal at the once-flush multimillion-dollar ministry made front-page headlines and evening TV newscasts across the country over the next few days. A number of employees interviewed by WORLD recalled what happened the following Sunday in the churches around Denver they attend. They said some of their friends at church embraced them and offered prayers, food, and even future help with bills, if needed.

This month, some churches in and out of Denver reportedly were preparing to send the equivalent of welfare checks to individual staff members to help them survive as volunteers in the months ahead. PK has a policy of not accepting designated funds for staff members, a PK officer said.

The day after he announced the cessation of pay for staff, Mr. McCartney, 57, flew to St. Petersburg, Fla., where he spoke with reporters and addressed a PK regional conference of more than 3,000 clergy. "I'm not discouraged," he said, as he appealed to "every church that names the name of Jesus ... to give Promise Keepers $1,000."

Among those who placed a pledge in the collection plate was Pastor Jeff Wilson of South Community Church in Sarasota. He said he promised to give $2,000, of which $1,000 would be for his own congregation and $500 each on behalf of two smaller churches, including a Hispanic mission that meets at a nearby Baptist church.

Wire services and newspapers reported Mr. McCartney's plea for $1,000 gifts from churches. PK officials said some churches-they would not say how many-responded rapidly. At Melodyland Christian Center in Anaheim, Calif., Pastor Ralph Wilkerson said his church would send a "substantial" gift.

Money and pledges from churches actually had started flowing several weeks earlier, the results of Mr. McCartney's appeals for help in January and February at the first seven of nine scheduled regional one-day PK clergy conferences in major cities around the country. Attendance at the meetings averaged between 2,000 and 4,000, according to PK officials, and more than $1 million was pledged on behalf of over 1,000 churches. Spokesmen noted that pledges might come in installments over an entire year and cautioned that some might not be fulfilled at all.

Some churches that have participated in PK activities have decided not to fork over $1,000. Pastor Charles Paxton and other men at 185-congregant Camby (Ind.) Community Church in suburban Indianapolis attended PK conferences in Indianapolis and the "Stand in the Gap" rally in Washington, D.C., last October (WORLD, Oct. 18, 1997). They discussed and prayed about PK's predicament two days after it made national headlines, and then "decided that at any future conferences, they will still pay their $60-as a contribution," Mr. Paxton told WORLD. "No one in the group suggested we send $1,000. We have many needs of our own for which we don't have funds."

Mr. Paxton stated that his church had benefited immensely from involvement with PK, "but our men paid their way." There are many deserving missionaries and ministries; "we can't help them, either." And trying to find a larger church to make a donation on his church's behalf, an action Mr. McCartney suggested for small churches, is unrealistic, he indicated.

At 5,000-member First Baptist Church of Modesto, Calif., where well over 1,000 men have attended past PK conferences, many men lined up at kiosks on March 8 to preregister for a June 5-6 PK conference scheduled for Fresno. "Our men said they don't mind paying, and they wonder why the fee was lifted," said Ross Paterson, 42, the pastor who oversees PK activities at the church. "Our guys are concerned," he said. "They've agreed among themselves to pay the full amount [less the $19 cost of a meal and worship tape] as a donation."

Meanwhile, Focus on the Family's James Dobson chatted on air with Mr. McCartney about PK problems and appealed to his vast radio audience to help out. And Campus Crusade for Christ founder and head Bill Bright is asking 300,000 Crusade supporters on his mailing list and 50,000 pastors on another list to send a gift to PK. (Mr. McCartney became a Christian at a Campus Crusade gathering in 1974 when he was an assistant coach at the University of Michigan.)

PK's fiscal mess grew out of a tangle of circumstances and decisions. Chief among the latter came last fall when, with PK income already skidding downward, Mr. McCartney and his board of directors decided to stop charging men $60 registration fees to attend the stadium conferences, effective this year. Instead, they elected to rely totally on contributions to run the ministry. (Under the new policy, participants may order and pay for a meal and worship tape in advance, but an admission wristband is free.)

The $60 fees, which accounted for about 72 percent of PK's annual revenues, paid for rental of stadiums, the program, meals, materials, and other costs. About $6 of each fee went to help run headquarters and small regional offices in seven cities, PK national spokesman Steve Chavis said. This amount, combined with donations (historically about 10 percent of annual income), in past years sustained the organization through the winter months. In late January and February, advance registrations would start arriving for the spring conference season, and the cash-flow cycle would begin anew.

Mr. McCartney first presented the no-fee proposal at the June meeting of the 17-member board (one member has since resigned). As several board members remember it, Mr. McCartney said he felt strongly it was God's will for PK to remove barriers that might prevent any man-unsaved, poor, or otherwise-from attending. He said PK would begin placing greater emphasis on evangelism, and Christian men could more easily invite non-Christian friends to attend PK events if there were no fees.

Mr. McCartney left the room in order not to influence the ensuing discussion, said board chairman Phillip Porter, 60, a bishop in the Church of God in Christ and pastor of 500-congregant All Nations Pentecostal Center in the Denver suburb of Aurora for the past 35 years. PK already was facing a financial decline that required stiff belt-tightening and layoffs. Mr. Porter told WORLD how he and fellow members reacted generally to the proposal: "We felt, 'Whoa-a-a, no way can that be done, not now.'" But they agreed to think and pray about the idea over the next three months.

Mr. Porter said he became a no-fee convert that summer during a visit to Birmingham. A newspaper column there wryly observed that PK charged people to hear the gospel, while Billy Graham did not. "Coach was right: We should not be charging people," Mr. Porter remembers telling himself.

He said that when the full board met again in September, he discovered others had reached the same conclusion during the summer. Board members with ministerial backgrounds outnumbered those with business orientation by about 2 to 1. The ministers tended to back the proposal, but the businessmen tended to oppose it, Mr Porter and two other board members told WORLD.

"We who are familiar with balance sheets and bottom lines are cautious," board member Alonzo Short, 59, a former Army general who works for Lockheed Martin in suburban D.C., told WORLD. "On the other hand, our attitude is, 'Father, we want to do what you want to do.' At some point, that requires a step of faith."

Members engaged in "extensive" discussion, but "no one really challenged the coach's position," Mr. Short said. He and other board members said they discussed at length whether financial barriers did keep men out since PK scholarships as well as church and one-on-one help have been available. Members also discussed whether removing the registration fee would result in larger numbers of no-shows and part-time attenders-and thus diminished impact.

Some members favored keeping the fees in place for now and gradually moving to a no-fee basis over a longer period of time, said member Ron Blue, who heads a financial planning firm in suburban Atlanta and has written books on managing finances. Mr. Blue said, "We believe God may speak to leaders in unique ways at times. We trust and respect Mac as a leader. But we also had to look closely at the consequences of such a decision." He said members "knew and understood" these consequences and began planning immediately to deal with them. In the meantime, Mr. Blue said, "I have absolute confidence God will provide." He did not say how he voted.

"We all love and admire our leader," said Mr. Short, who finally decided to vote with the majority for the proposal. "He had a vision that brought Promise Keepers into being, and now he had another vision and was equally convinced it was something God wanted us to do." Board members agreed to report the vote as unanimous and declined to divulge to WORLD the actual vote. Mr. McCartney announced the no-fee policy change the following month at the Washington rally.

Mr. Porter and Mr. Short said no one on the board anticipated everything that was ahead: the failure of a fund-raising campaign to take off following the well-publicized Washington rally; expected grants and gifts from major donors that never materialized; the need to lay off the entire staff. (Board members seem to have been caught off guard by Mr. McCartney's all-or-none team approach to staffing, but they declined to discuss it.) The full board is scheduled to meet later this month to review where things stand.

Subsequent events and the 1997 balance sheets have amply displayed the financial difficulties. Although donations increased sharply (to about $20 million, from $8.6 million in 1996), 40 percent fewer men attended conferences than in 1996. An initial budget of $117 million had to be revised to match revenues of just under $70 million, PK officials said. As part of the adjustment, administrators slashed programs and more than 100 staff members last summer. Pay levels were frozen throughout 1997. (Mr. McCartney is not paid a salary, though he is paid fees for speaking at PK events. He received $41,800 in 1996; PK's detailed financial records for 1997 won't be ready until next month, a spokesman said. Mr. McCartney's main income is from making motivational speeches for a furniture company.)

The Washington mall rally in October cost about $9 million. Offerings from the estimated 600,000 men there barely topped $1 million. PK's executives had anticipated far more. (National Park Service rules and sensitivities about donation appeals on park property were partly to blame. Unlike at Louis Farrakhan's gathering in 1995, no public offering was taken. Participants had to find their way to one of 120 collection drums scattered around the mall to drop in their contributions.)

By the end of the year, the ministry, unable to count on income from advance registrations any longer, was in deep trouble. Payables totaled about $2.5 million, some not due until the early months of this year, a ministry spokesman said. Little cash was on hand. Worse, the projected cash flow from contributions was insufficient to reserve stadiums, enter into other contracts, keep bills current, and still make the $1.2 million monthly payroll. About $3 million in donations arrived in January, according to published figures, but the amount was not enough to make ends meet.

Administrators last fall had planned to operate with a reduced staff until restructuring was complete and the new system was working. However, Mr. McCartney's one-year "team" commitment to his employees in November forced a change in strategy.

Under the initial phase of the restructuring plan, PK must rely on an all-volunteer work force and find sponsors and donors to underwrite the 19 two-day stadium conferences for men this year. The conference season is scheduled to begin in May with events in Detroit, Little Rock, and Los Angeles. Advance registrations already are in progress.

As part of the layoff notice, employees owed vacation and compensatory time off were instructed to take it this month, along with accrued sick leave. As a result, empty desks are the rule in many cubicles scattered throughout both buildings PK occupies. Managers have been hard pressed to keep the ministry limping along at a crucial point in its bid for survival.

The new PK business plan calls for permanent downsizing, farming out more in-house tasks, and focusing more narrowly on PK's core mission. Gone, for example, are the daily 90-second radio spots on about 1,000 broadcast outlets, along with the one-hour weekend Promise Keepers This Week radio show on more than 300 stations. Gone or almost gone are outreach programs such as a PK prison effort.

Several executives acknowledged that PK had made mistakes in earlier years of rapid expansion. "We grew too fast. We hired too many people," public affairs director Steve Ruppe told a reporter. "We may have done stupid things, but never anything out of malice."

According to some employees granted confidentiality, the mistakes included buying expensive equipment to do work that was then outsourced. Administrators at times seemed not to be coordinated; staff was not always well deployed (one skilled worker complained about having too little to do); some projects suffered from lack of organization; and some tasks may have been better handled in-house, they suggested. But all these employees otherwise had praise for PK overall.

Even among PK's most ardent supporters, there is widespread disagreement about the recent actions. Was it wise to eliminate the main revenue source of tens of millions of dollars at a time when total income was declining? Was it prudent to risk losing experienced and gifted personnel?

Pastor Kim Skattum, 41, of Crossroads Baptist Church, a 1,100-member American Baptist congregation in northwest Denver, doesn't think so. Involvement in PK over the last five years "has revolutionized our church, our men, and my own life," he asserts. Yet he fears the decisions will damage PK: "Outstanding leaders are without income at a time when our churches need them to keep the momentum going, and that is a sorry spectacle." His said his church stands ready to help.

Indiana pastor Charles Paxton, who takes a dim view of the no-fee policy, suggests that people tend to "get more out of something if they have money in it." With a fee, there are fewer no-shows, more people who stay the entire conference, and better attentiveness, he said.

Similar concerns were raised at PK's annual national speakers' planning summit Feb. 23 and 24 at a conference center near Colorado Springs. The meeting brings together dozens of prominent pastors and other leaders who address the Promise Keepers rallies, along with Mr. McCartney and senior PK staff. Some questioned the new no-fee policy, but Mr. McCartney passionately defended it. In the end, "many of us came to believe the [no-fee] plan is indeed the Lord's new direction for Promise Keepers," said Pastor Danny De Leon of 4,800-congregant Templo Calvario in Santa Ana, Calif., a PK speaker and Assemblies of God leader.

Paul Nelson, who heads the Evangelical Council for Financial Accountability, says his watchdog agency is monitoring PK closely. Vendors are being paid, and, under the circumstances, the leaders in charge seem to be handling affairs prudently, he adds. He believes what they are doing is risky, but he is "cautiously optimistic" about the outcome.

Coach McCartney's optimism may be grounded in a change in vision. The restructuring underway at Promise Keepers, he told WORLD on March 9, is part of a transition in which PK will "hand the baton to the churches of America and challenge them to take it the rest of the way." He hinted the switch-over could occur Jan.1, 2000, when he hopes mass men's rallies will be held in every state capital. The next day, he said, PK will begin focusing on efforts abroad.