The Importance of Family Legacy with David Green Pt 2
1:36– What has been your approach to bringing up your children–and now grandchildren–up in the business?
7:10– A word on generosity
9:50– A piece of advice on how to leave a family legacy
13:42– An inside look at the Hobby Lobby Supreme Court case
24:33– About the Bible Museum
26:38– The 4:23 Question
Hobby Lobby began operation August 3, 1972, with six hundred square feet of retail space in Oklahoma City. It is now the largest privately-owned arts and crafts retailer in the world, employing approximately 35,000 team members at over 800 stores spread across forty-seven states. Hobby Lobby is foremost an arts & crafts store but includes many departments such as hobbies, picture framing, jewelry making, fashion fabrics, floral, cards & party, baskets, wearable art, home accents, and holiday merchandise.
Their headquarters are located in just over 10 million square feet of manufacturing, distribution and office space in Oklahoma City. Affiliated companies include nine Hemispheres Fine Furnishing stores, located in Oklahoma and Texas, as well as Mardel, a popular Christian office and educational supply chain found in seven states. Hobby Lobby also has offices in Hong Kong and Shenzhen, China. David remains chairman of the affiliate companies, the CEO of Hobby Lobby and a buyer of merchandise.
David is the author of two books, More than a Hobby, and his most recent book Giving it All Away… And Getting It All Back Again: The Way of Living Generously. This book shares some of Hobby Lobby’s Supreme Court battle involving the Affordable Care Act but the larger story of family legacy and the power of generosity.
Full Transcript of Podcast Below
Ray: Well, hey, folks this is your host Ray Hilbert here at Bottom Line Faith this is the program where we love to bridge the gap between faith and business. Today’s episode is part two of our recent interview where we had the chance to go down to Oklahoma City and interview Hobby Lobby CEO and founder David Green. David ist is one of the most successful in Godly businessmen our country has ever seen, and he is really modeling living out faith in business on a daily basis. This is part two of our episode with our interview with David Green. After you’ve had a chance to be encouraged and blessed by this episode I’d like to encourage you to go back and check out part one if you haven’t already done so. So, let’s listen to her conversation with David Green.
Ray: So, very, very exciting. One of the things that I was, and this is related to the business; this is a if I’m understanding correctly, this is 100% privately-held family business. Is that correct?
David: That’s correct.
Ray: You have approached family working in the business with great intentionality and great purpose and strategy. Would you tell us a little bit about your approach on bringing up the children in the business, now grandchildren, great-grandchildren down the road. How have you done that? What are some of the things you guard against? And how has that all worked?
David: Will, first with my children and my grandchildren we don’t encourage him to come into the business nor do we discourage them. Our hope, my wife and I, is that our children and our children’s’ children will just try to follow after the Lord. Find out what God would have for them. As my brothers and sisters, all five were in Ministry we are finding that I’m having more children and grandchildren in ministry than in the business, in fact. So we’re really, really good with that. We have 35,000 employees here, and it doesn’t have to be a family member to run this company, in fact, we don’t own the company, God does. We have to be good stewards so that the person who needed to follow me needs to be the very best person to steward this company. So that’s kind of how we approach it. The family has all signed off any rights that we have to any stock that we own. Stocks and four trusts, my children, myself and my wife, but we’ve all signed off that we can never touch the company. I can’t touch a penny of this company. We’re salaried, and so 100% of the voting stock is in the Green Stewardship Trust and so my wife, and myself and my three children, the five of us are on this Green Stewardship Trust, which is the very top from a legal standpoint of everything below it, like Hobby Lobby. Our idea is just that we want to be stewards and that’s all we are, and this trust could have seven it could have my grandkids, my great-grandkids, and it can go from now on. But to get on this trust, you know, you have to believe in these particular things, that Jesus Christ is the only way, He’s a virgin’s birth and on and on. So this is kind of how we have done it. None of us have any value. If God owns it, it should be in a tree form, not a bunch of branches. So we’ve had people come in here to advise us, and they want me to break o branches, you get a branch, you get a branch, and you get a branch. But what happens when you really divide a company, we are not divided we are one. So, we are a committee that comes together to decide on the profits of this company. We see ourselves as one and not as units. So we are able to do things of substantial because it’s like this person can’t say “Well my part, I want to do this. And my part-” You don’t have a part, I don’t have a part. You just sit on a committee. The Bible says “There is safety in numbers” you know. So this how we come together once a month and how we decide what our stewardship and what God has given us and the finance that God has given us. So, we don’t have to concern ourselves with someone selling off or not working because if you get paid, you have to work. So I have to work to get paid and so do my children and grandchildren.
Ray: Fantastic and one of the things- I chuckled when earlier in the book you call yourself old school, right? And you talk back through the book about very early on, and you taught your kids the value of work, the value of money. What did that look like? You talked about that your kids worked for seven cents a frame and so forth. But this played out into their first car, their college education, so help our audience understand how you shaped the values of your children through these old school values.
David: You know it really is primarily about working, and God has put us all here to work, every one of us. He put Adam and Eve here to work, before the sin and he wants us, and that’s what we’re supposed to do. I think it’s terrible if we don’t use our hands in whatever God has given us to do the very best we can. I tell people, and one of the hardest things for Barbara is not to do for our kids. You know, so it’s hard not to do for them. When they are out here and say “Okay, we’ll come alongside and help you buy a car, but you do half, and I’ll do half.” Now that may be the right or the wrong thing to do. But for us, it was like “We need our kids to learn work ethics and their need to get out here and work. So there are so many things that we could do, even today with our grandkids that would be so much easier but it’s not the best thing to do. So sometimes people say “I didn’t have it, so I want my kids to have it.” Well, it really didn’t hurt you to not have it. It didn’t hurt me not to have it. I had to get out and earn my own car. I had to earn everything I had. I got nothing from my family because they didn’t have it, other than the important things.
David: That’s what they had given me in terms of my spiritual life. So, I think it so important for us to be careful when it comes to finances our children and grandchildren.
Ray: We’re going to come back around that because it was that foundation, we’re going to talk about that in a moment about Burwell vs. Hobby Lobby U.S. Supreme Court case and how this kind of foundation is how you and your family got through without a doubt. But if you don’t mind while we’re on this topic about the values being passed along and so forth. No doubt generosity is who a core as who you are as a family. In the book, there is a couple of analogies that you use. You talk about Uno vs. Monopoly, could you comment on this? I thought this was one of the two great analogies you shared in the book.
David: Well, there is one way Monopoly, and I enjoyed playing it when I was a kid and then by the way when I became an adult I was playing it for real, you know. To be real honest when people say ” it’s God’s business” there is a lot of difference between saying that and doing it legally. I found that there is a gulf there so it took a little while for me to say “Okay, we’ve taken our lifetime to build this thing, it’s worth billions of dollars, and now I can’t touch it.” So, monopolies trying to hoard and to get more and whoever dies with the most wins, that’s not really quite right. It’s more of Uno. It’s like who doesn’t have any cards in their hands. So when we’re through at the end of our day, we will still have assets here that will be in ministry, but we don’t want to find ourselves to where that we haven’t given all of what we can give on the way.
Ray: Great analogy, Uno vs. Monopoly, very profound. The other story or now you talked about was that we are in a relay race and this was in the context of generosity and what we’re passing along to our kids. You talked about the fly zone, the passing zone. Walk us through that a little bit. What’s that all about?
David: Yeah I think that all of us as we build something like Hobby Lobby, God has allowed Barbara and I to build this we know that there’s that period of time where we’re going to have to pass it along, and there is a period of time where maybe we are walking as in a relay race, that you’re running together. So right now we are kind of in that area, we’re running together with our family, with our employees but there is one of the times where we have to drop or hand off the baton, and that’s the critical time. So we give a lot of thought to where we are and where we’re going to go in the future. We have plans today that if I’m in a car accident, then tomorrow everybody in the family knows who will take my place. But by the way, it may be something different if I’m here ten years from now. It may be that that person might be ready to retire. So, it’s something that we want to make sure if we are stewards of this ministry and it is a ministry, it does belong to God that we are very careful with it that it might do the maximum amount of ministry that it can, as long as it can.
Ray: You talk about in the book about the odds of successful passing along wealth in a business from the first generation to second generation it gets small, from second generation to third- I mean we get to under five percent surviving gen four. I’ve heard also that is around $40 trillion that are going to change hands in the next thirty years in your family legacy.
David: That is correct.
Ray: Why is that success factor so low? What advice would you have for someone that’s going to be experiencing some of those decisions passing along generational wealth?
David: Yes and I think that is something that really caused us to not hand anything down to our children in terms of value in this company. I have good children. I have good grandchildren. But I think we should look at the past and what’s happened, and really what hurts somebody and I think there is nothing you can do more to a child or a grandchild to give them wealth, that they may or may not work if they don’t have to. They or may not, is not a position they ought to be in. Sometimes I have people in meetings when I’m meeting with businessmen that they have wealth and they say “How does your grandchild feel about that?” and I say “I think that’s the wrong question. It’s how do I feel about it. How do I feel if I have a grandchild that wants something that they didn’t earn?” I’m not feeling very good about that grandchild, but I don’t have any grandchild like that. They all want to earn what they have an not to receive something and say “I’m successful because I’ve been handed this,” and so I think it’s so important in how that we handle any wealth that God may give us and to make sure that we don’t hurt our children and our grandchildren.
Ray: Well, we see this throughout history, you know. Nations have fallen for this very reason. Wealth was not passed along for the right reasons, then a sense of entitlement we see it with our young people today. So, thank you for setting that standard, and I bet sometimes you feel like you’re pushing water uphill with that.
David: Well I have a family that has really bought into it. You know we have bought into our vision, our mission, and our values. We’ve came together made documents of “This is who we are.” and I thank God that my family, to the third generation, have all bought into who we are and what we want to do in the future.
Ray: The other analogy on this is you talk about, the Civil War analogy can just speak to that? Then I promise we’ll move on to something else.
David: No, no. I think that’s good because you had dollars that were worth no value and our dollars are of no value to us when we pass on. They have no value if you have not used them when you can and when they have value to us, and that’s how come it’s so important for while I’m living I want to make sure that I do everything that I can with the profits of this company to do everything I can to let people know about Christ.
Ray: I’m just so encouraged for this not only this conversation but just when I say “Pushing water uphill.” you really are going against the grain of culture and society today who so many of us, you know, we all want our kids to have life better than we had, I get that. But you are setting a standard, and I want to tell you thank you.
David: Well I’m thankful for the children that I have because they buy into this. I haven’t heard anybody that had a problem with our grandchildren not having some wealth handed to them. They say “Actually, gives me freedom. I don’t have to worry, how am I going to handle this? Because I know I’m not going to have to. But I’m here, and I can make my way. I should make my way on my own. So we feel what we should give our children is an opportunity. So, we have 35,000 jobs here so there’s a lot of opportunities in different areas, that our children can come to if they so desire.
Ray: Well, it is through this foundation that has led your family through a very challenging time in the last few years. Let’s talk about, if you can recall, back to the first moment to where it was like “uh-oh we have an issue. We have a big problem here. We have something that’s really going to take some intentional thinking. Take us to that moment. We’ll backtrack and talk about that case. But take us to that moment.
David: First I want to say earlier I talked about tests, God tests us, well here is one of those.
Ray: A big one.
David: A big test. When our attorneys that are in charge of our insurance and that signs are insurance policies every year says “by the way the next time our insurance is due, the new insurance policy has to have prescriptions for prescriptions that we believe without question could take life.” our family believes that life begins at conception and only God creates life. There is no life outside of what God has created, and our government was telling us, and our new policy said that we would have to supply these and pay these for our employees. So, that was when we knew that this couldn’t be the case. That our government should not override our conscience, and our conscience says, we can’t do this. So, that was the beginning of quite a ride.
Ray: Yeah and we’re going to pack that story and journey in just a little bit. But on page forty-seven in the book, I wrote this out or typed this out, that you said you were furious at the way you felt you were being treated by our government. So how did you balance that rage, fury versus the Biblical passage that says “Be angry but sin not.” what was that like for you?
David: Well, no, it was very, very difficult for me. Because at that time I was just taking the facts and the facts was that if I don’t do this and go against my conscience, then it would cost me $1.3 million a day as a fine.
Ray: Let’s break that down if you don’t mind because what did that comprise of $1.3 million a day, break that down for us.
David: Okay. The government says that you have to pay it for every person that is on your insurance program. Once you did the math on it at added up to be 1.3.
Ray: Yeah, so sensually we’re talking about that there was a per-day fee, per person and that totaled the 1.3 million. So, we’re talking real money even for a multi-billion dollar company.
David: Exactly. Yeah, we obviously couldn’t do that long. So we could not do that.
Ray: So, we’re now back to another test. Like you’re saying, you’ve given us other examples. The store where you kept the lease, the test being obedient around the $30,000. Back to my earlier comment about well, “David it is easy to obey when you got a lot. But it’s on the line now-”
Ray: literally, right?
David: It’s not something that we could afford.
Ray: This is all based out of the Affordable Care Act. As you said requiring you to cover some drugs, some morning-after pills, and abortion drugs in those sort of things and you talked about- here’s a quote from the book, “There are times that the test of your conscience, is greater than the test of your pocketbook.”
David: Exactly and that is where we came to, and it was one of our greatest tests, and I say that on one hand but on the other hand I say there was never a time that we even blinked at the thought that we could do it, no one in our family. So what we had to do at that time because it was going to affect our whole family, we had to call them together. So, that’s what we did we called them together. Everybody that was sixteen and older. I think there was twenty-one of us that were in that meeting. It was important to me not to speak but to ask the youngest how they felt and then I would be the last to speak. It was really exciting to see Gen 1, Gen 2, and Gen 3. They had asked questions “what else can we do?”, “How can we get out of this?” but there was never one that would agree. When we were done with the conversation, there is no one that said “We wanted to take life.” or “We went to pay for someone’s prescription that could take life.” My youngest son was the one that really came prepared with talking about Daniel and talking about how at sometimes Daniel might have been relieved. There may have been times that we’re on the lion’s den that we aren’t relieved. So we needed to be prepared to lose this company. That is the decision we needed to make, one that given day are we ready? So that’s what we had to decide.
Ray: And this is so emotional for you.
David: Well, yes because it’s really sad that our country would do something and ask- they are doing that in other areas of life. They are asking us to go against our conscience, or they’re going to fine you, or they are going to put you out of business if you don’t follow what they believe is the right thing to do.
Ray: What I love about this, you talked about that family meeting, and we talked earlier about all the conversation that it takes to get to that kind of point. I believe and I suspect you would agree that out of all those conversations hadn’t happened in the past about “who we are.” and “what we’re about”- It lead to that moment didn’t it?
David: Yeah, exactly and it led to them, the moment of how important it is for our children to serve God, which is one of the most important things in our life was to have a great marriage, raise our children to serve the Lord, and they, in turn, raise their children to serve the Lord. So, because of the way that they have been taught from God’s word we were all on the same page. It could be different generations. We have three generations there. Me generation, my children’s, and then three is my grandchildren’s that someone could take a different direction but building it on God’s Word we were together.
Ray: Yes and ultimately you were victorious in the case. But if memory serves me right, there was a really shrewd professional attorney on your team that found a clause that kind of helped shift this in our direction.
David: Well if it’s what I think you’re talking about there is a way that we could delay the insurance and end delay it for about six months. Which was really just to delay, it didn’t help us necessarily-
Ray: It bought you time.
David: The courts made the decisions and the federal court here in Oklahoma City one judge says, “I’m not going to give you an injunction.” and that said to me “then I have to pay 1.3 million a day,” and that’s when he says, “You’re not going to get an injunction, you’re going to follow the government.” then went to the 10th circuit and three judges says, “I’m not going to give you an injunction.” So those three judges, two out of three, voted against us. “You’ve got to pay 1.3 a day.” but anyways there was a lot of prayer going on, and God allowed us to, which very seldom happens, to have the entire court at the 10th circuit look at it and that’s when we got an injunction. We got the injunction on a Friday and on Monday is when the new policy had to go into effect, and the policy was already printed, and it did not have these prescriptions that we would not allow to be there. But God came the day before. You know the fine would have started the following Monday, but, of course, as everybody knows it went to the Supreme Court and we won on a 5-4 basis. To me, it’s ridiculous that it wasn’t a 9-0. How can a judge tell you that you’re going to do something against your conscience? And it’s not like we’re the only ones that believe that life begins at conception.
Ray: You talk about on page 59 of the book, you wrote about the certainties you had sitting there in the United States Supreme Court about who you were, who your family is, you knew who owned Hobby Lobby, you knew why you were in that courtroom, and you knew who control your fate no matter what those justices decided. Take us to that moment, just live that out for us.
David: Well, I tell people when I first found out it was 1.3 we were angry, we were scared. My wife and I, it was like we didn’t sleep because I’m going to lose the company. We went from that to an environment where we were totally at peace. So, that was only a week or two period of time when we were that out of it, and we went to an environment- and I tell people it’s total peace. An environment where we could lose our company for two reasons and one of them was prayer. We had people praying all over the world for us, and the other was we sit down and say “Now how hard is this? You’re either going to take life, or you’re not.” Which side is God on? We’re are on God’s side so why are we going to be fearful? We are on His side no matter how this comes out that it’s still God’s. He’s in control of our lives. So between those two things, we rested for all those months that this went through the courts. We rested in the fact that we did the right thing. So, we shouldn’t have any excitement about it.
Ray: And then the verdicts came down, the 5-4 decision. Where were you and what was that moment like?
David: Yeah, we were in our conference room here, and we had our attorneys there. We were waiting because we knew that it was the last decision that they made that year and as they said that was the biggest case of the year. We know it was going to be on that given day. So, our family was all gathered in that conference room there, and our attorneys were there. We were asking them “What Arte they saying?” you know, because there is a lot of things that isn’t just yes and no. But anyway finally they said “No, we won our case we’re not going to have to supply these.” and my daughter was a cheerleader, so she is up screaming and hollering, and we were very excited, and we were thanking God and have since thanking Him for coming to our rescue. Across the street we had this huge billboard up it said “Our God whom we serve is able to deliver us.” as found in Daniel but we knew that deliver might mean something different, you know, whatever deliver meant but we were leaning on Him.
Ray: That’s the ultimate faith. He will define what deliver means right?
Ray: Well, I would be remiss if we didn’t, at least for a moment, talk about the Bible Museum. Why did the family do what they’ve done? I’m going to get a chance to go there in just a very short period of time. Take a moment share with us about the Bible Museum and what you hope God will use that for.
David: You know our family, if you look at where our finances go, you would find out that we try to do a few things of significance because there is literally about 300 requests that come in here every month for finance. Probably 90%, we do the numbers on it, over 90% was in seven different projects one of those, of course, is the museum. But all those projects, if you look at them, they all have to do with God’s Word. But all those projects, if you look at them, they all have to do with God’s Word, that’s all that there is, it’s eternal. So, we want to make sure that our investments go into things that are eternal. Of course, we know what God’s word is, and we love God, and we just sense that God brought us here. You know, we didn’t know that we were going to do this we bought some antiquities saying, “We’re going to give these to somebody to do this project,” we thought that there ought to be a world-class Bible museum, I say “If there was only one museum in all those earth it ought to be about the Bible.” because that’s the only thing that is eternal other than our…. So, God lead us into this We’re excited about it’s, over 430,000 square feet. In December we had days where we had 10,000 to 12,000 people there. We think that and hope and feel like we may have the numbers that we’ve gotten is as many as 3 million people. So we really feel like it’s exactly where it ought to be, in Washington, D.C. Our answer is in God’s word, and we did better starting out this country looking at God’s word, and prayer, so hopefully we can go back to the strength and truth of God’s word.
Ray: We need to get back to those foundations and roots. David, the last question I ask in every interview is what I call my 4:23 question, it’s based out of Proverbs 4:23 where Solomon writes “Above all else guard your heart for from it flows the wellspring of life. So, David, if we could just take you to the moment, let’s say you’re towards the tail end of your life, this side of eternity and you have a chance to gather your family, your friends, and your loved ones. What is that one piece of advice that one thing that you like to pass along and pass along to her audience today? Above all else…
David: I would say that for me it’s to try to accomplish what I’m trying to do for myself and for everybody else and that is, God has given us His word, and I believe it’s so important for us to be in God’s word and also to stand on God’s word. Let’s believe what He says and stand on it. When I do that in business when I do that in marriage when I do it in family when I stand on His word I’ve got something solid to stand on. Then come the museum of the Bible, etc., etc., etc. and all the work we do to get God’s word all over the world and makes sure every child had God’s word and all the things God has allowed us to do to spread the Gospel.
Ray: Thank you, David Green. God bless you.
David: God bless you, and God bless your work.
Ray: Thank you. Well, folks, this has been Ray Hilbert, your host here at Bottom Line Faith and we really, really prayer and believe that you have been greatly encouraged and inspired by our conversation with David. If your new listener go to bottomlinefaith.org, you can scroll down to the bottom of the page there rather you’re on iTunes, Google Play, or Stitcher you can become a listener here of the podcast. If you’d like to learn more about Truth at Work the host Ministry here at Bottom Line Faith, you can check us out at truthatwork.Org. Folks until next time this is your host Ray Hilbert, saying God bless and serve Him faithfully in the marketplace.