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A library of useful articles on every topic impacting your PraiseBuilding.

Funding The Local Church

Eighty percent of giving in evangelical churches comes from 20 percent of the people. The remaining 20 percent of giving is from another 30 percent of the people, leaving 50 percent not participating. Published national statistics by Barna, the Southern Baptist Convention, and others suggest that 80 percent of giving in evangelical churches comes from 20 percent of the people. The remaining 20 percent of giving is from another 30 percent of the people, leaving 50 percent not participating. The average amount contributed represents about 2.5 percent of the contributor`s gross income, rather than the basic tithe (10%). Historically, most churches have sought to stretch giving by increasing the budget or appealing through Faith Promise Missions—a single category of the overall ...

The Church Borrowing To Build: Let Borrowing Serve You

Certainly the concept of borrowing money has been abused. Many have become slaves to debt (defined as excessive borrowing) rather than making debt (defined as reasonable borrowing, better identified as loans) serve them. I believe the church project can be partially funded through borrowing without violating biblical principals governing interest and payment of loans. Borrowing should never replace stewardship. Challenge your people with the Word of God to an enlarged faith that would encourage giving beyond the visible assets of the moment in trust agreements with God. Accept the possibility with God of sufficient cash gifts for the project. Raise all you can. However, waiting for cash to build in some instances is costly. You may miss the opportunity to purchase a suitable building site when it is available. Inflation could increase building costs more rapidly than your building fund is increasing. A congregation usually becomes weary and disheartened if they see little progress. Capacity crowds in the present facility may eliminate your ability to grow. Occupying a new facility may allow you to reach more people for Christ who can also give to eliminate the ...

Solutions: What About Designated Gifts?

Or a pipe organ? Maybe it is something that does not fit into the building plan without major additional costs because the plans would have to be drastically altered. Or the labor cost for the stained glass installation is prohibitive due to the limited project budget. We could cite many examples. But the primary question is whether an individual donor`s contribution can control what the church is going to do without any consensus of the will of the people. This issue surfaces frequently in the churches. Does an autocratic pastor have the liberty to place something in the building that someone has contributed without consulting the church officers or congregation? Maybe it is a set of drums to place where the organ was located until the pastor decided to give the organ away! If your church practices congregational government, the voting membership of the church should be given the privilege of exercising their right of franchise. The pastor and church are not obligated to do anything underwritten by an individual donor; any donation must be limited to a suggested designation with the ultimate destiny of the donation being controlled by the church for that ...

Funding The Local Church: Borrowing For Building With Bonds

(No church project I have been involved with has failed when the church followed my conservative guidelines.) Now state and federal regulations have added more registry controls that further safeguard the churches and the investors. Why do churches borrow with bonds for building? a. Long-term fixed interest rates are possible with bonds, while most banks offer variable or adjustable rates with balloon balances. The fixed interest rate removes the uncertainty of having to refinance at a higher rate of interest and additional fees when the balloon comes due. b. Bonds provide the opportunity for members to earn a higher return on their investments than banks pay on certificates of deposit. To the extent that bonds are purchased by the membership of the church, the interest is retained by the church members. c. A graduated payment schedule is an option. The loan payment can begin low and increase as church membership and giving increase. But the graduated payment schedule would pay all interest and principal within the specified period for loan maturity without a balloon. d. There is an open-ended deed of trust for future expansion loans. Unlike most conventional loans, if ...

Funding The Local Church: The Debt-Free Debate

The Continuing Debate I recently read the 1996 Moody Press book by Jeff Berg and Jim Burgess, with foreword by Larry Burkett, titled "The Debt-Free Church". The distinction is made in the text between “debt” as unsatisfied commitments and “borrowing” money from individuals or lending institutions. The comment is made that perhaps the book should have been titled “The Borrowing-Free Church,” placing the emphasis on the ills of ever borrowing money. The majority of the quotations in the book are from Larry Burkett`s writings or from retired architect Ray Bowman who wrote "When Not to Build". I disagree with both of these authors on this topic. After nearly 24 years of work as a conservative church development consultant, I do not believe their views on this issue represent an accurate interpretation of Scripture or a wise approach to ministry and facility development. I agree with Berg and Burgess that there have been many problems and failures in churches related to building program debts. But building a case on atypical extremes and abuses is wrong. Many churches have used borrowed funds wisely and have prospered. Borrowing churches are not necessarily ...

Funding The Local Church: Liabilities Of Fund Raising

As I awaited my opportunity to present church development at the church board meeting, the church treasurer presented the financial report. “Since announcing our building fund, we have accumulated $30,000 through designated giving—not nearly enough to launch our building program. However, our giving in the general fund and missions accounts is way down.” I have often heard similar comments in churches that have established a building fund, invited the people to contribute offerings to the fund, or engaged in fund raising for expansion. In many instances, giving has been designated to the building fund which previously had been directed to the general fund or missions. This practice may have minimal risks in a committed congregation of assimilated members who accept ownership of ministry and giving responsibilities. But there are many liabilities that must be considered in most churches characterized as 80/20 churches—80 percent of the giving and serving from 20 percent of the people (a national average in evangelical churches). What are the liabilities of fund raising to be avoided? a. The appeal is primarily to the existing contributors. The self-effort of ...


__How much needs to be raised to purchase/renovate the building?  __How much needs to be raised on a weekly basis to cover the mortgage payment?  __How much needs to be raised on a weekly basis to cover other expenses-insurance, utilities, maintenance, etc . __How much needs to be raised to cover normal church expenses, salaries, administrative expenses, and normal purchases?  __How much more can be raised to cover the renovation costs?  __How long will it take to raise the budgeted renovation costs?  __How much can be borrowed?  __Can we get a bank commitment?  __What will the bank fees, interests, rates and terms be?  __Does the bank require any of the members to personally guarantee the loan?  By Stephen Ferrandi, Director, KLNB Regious Properties Stephen Ferrandi is the Director of KLNB Religious Properties, a real estate firm serving religioius clients in Maryland, D.C., Pennsylvania, and Virginia. He is one of the top experts in land development in the region. Mr. Ferrandi frequently contributes real estate related articles to both print and online publications.