This is a very well-written article on the problems of church nepotism. My wife and I have both seen it from a problematic perspective, and it can really devastate a church.
I can see the desire to hire family and friends, as they are most likely to share a dream and values and are definitely trustworthy. As the article states, this can be good in building a community. But after a while, I think it alienates other people and prevents others from coming and using their skills to build the community.
Have you experienced church nepotism? Have you seen it be beneficial, harmful, or both?