Capital Campaign vs. Leveraging through Borrowing—Which is Right for Your Church?

Capital Campaign vs. Leveraging through Borrowing—Which is Right for Your Church?

During one of our recent free i3 webinars, we touched on a sensitive subject: How to obtain funding for church building or remodeling projects. While churches are generally good stewards of their own funds—we take care of what God gives us, after all—there aren’t many church leaders swimming in drifts of gold coins on their days off. Launching into a major church remodeling project is probably going to take more cash than you have at hand.

So what can you do to build some capital for your vision of a beautifully remodeled church? Here are just some of the strategies we cover in our free i3 webinars.

Capital Campaigns: Forging Community through Generosity
Capital campaigns are essentially time-limited drives launched by non-profit companies to raise capital for a project, and by project, we mean something that will really stand the test of time. Like a new church building, or at least a very thorough transformation of an old one. This is by far the most desirable way of funding a project, since the church does not have to repay the money, and people give out of abundance, or sacrificially, pouring the spirit of good will and redemption into the project.

It is possible for a church to run its own capital campaign, but we recommend hiring a capital campaign consultant to lend an expert point of view and maximize your campaign’s effectiveness.

Leveraging Through Borrowing: Remembering the Greater Good
There are several ways to go about borrowing money for church projects, and all of them will feel uncomfortable.

Bank loans are the first thing that comes to mind, of course. Even today, bank loans are still a viable option for church funding. Better still is denominational lending. Many Christian denominations have a funding investment institution. As a member of that denomination, you may be able to borrow from them.

Older, less popular forms of borrowing include bonds and promissory notes. This amounts to asking for a loan from an individual with cash. Looking among your parishioners is a good place to start, but don’t be afraid to branch out. Interest rates tend to be higher on these kinds of loans, but here’s an interesting fact: The average church loan is paid off in seven years. It really is true: Churches take care of their blessings.

The Two-Pronged Approach to Church Funding
You may find that a combination of capital campaigning and borrowing works best. Look for a campaign consultant while simultaneously looking for a lender. If your capital campaign comes up short, it’s possible to borrow against the raised funds and make up the difference with a loan. This is a great strategy to keep yourself from losing momentum on a project, thereby maintaining the trust of your community, and setting up your new ministries as soon as possible.

Money is a sensitive topic. But remember this: You are borrowing for the sake of a greater good. This church building or remodeling funding is the keystone to forging new bonds between God and your community. There is no greater reason to seek new capital.

2013-09-10T08:23:35+00:00 September 10th, 2013|Advice, Financing, Uncategorized|