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A Cautionary Tale About Keeping Your Church Building Finances Flexible

We don’t often quote scripture on this blog but that doesn’t mean we don’t think about it. Since our mission is to support church leaders with their church building and renovation projects, there are some scriptures that speak directly to our ministry.

One of those is Luke 14:28, where Jesus says, “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?”

It’s hard to image better guidance for church leaders as they prayerfully consider what kind of church remodeling or new building project they can truly afford.

Be Realistic About Church Building Costs

Philip Tipton, vice president of architecture, says this about church finances today. “My heart breaks when we receive these phone calls occasionally: A pastor, a leader that’s hoping to build a church building for $50 per square foot or $70 per square foot, and we really have to break the bad news that that’s not reality anymore. It’s not even possible.”

As we discussed in a recent post, the realistic range for a new church building project here in the Midwest is $200-$250 per square foot. Other sections of the country might have different costs—some lower and some higher.

Understand That ‘Smaller’ Doesn’t Mean ‘Less Expensive’

Choosing to start with a small part of a larger church remodeling project isn’t always the best solution if money is tight either. That’s because there are economies of scale that come with larger projects.

If you have to cut a door into a wall to get from room to room, the cost of cutting the hole, re-supporting the wall, and installing the new door, frame and hardware is a fixed cost regardless if you are making it a room for a one-person office or a classroom to seat forty-nine.

Therefore, a piecemeal approach to your church renovation or building project means the cumulative cost over time may more than offset the cost to finance all the work, all at once. However, taking out a loan for church building today is a serious topic, and borrowing money should not be automatically accepted or dismissed without carefully considering what is best for your church.

Be Flexible About How You Finance Your Church Remodeling and Building

Estimating cost is only part of the equation. Church leaders also need to be flexible in setting goals for their church financing. Here’s another of Philip Tipton’s cautionary tales that illustrates the point so very well.

Several years back, there was a very large church that, frankly, could afford to do a lot.

This church’s leaders had made a promise to their congregation early in the planning process, saying that they would not start any projects until they had commitments for one-half of the needed funds; the other half would be financed through a loan. In other words, they wanted 50 percent committed in their church financing pledge campaign.

A problem arose, however, when they had a very successful campaign, yet only raised pledges for 47 percent of the cost of the church building project. At that point, they could not get to 50 percent.

We encouraged those church leaders to consider financing the last three percent and get started on the project, but they felt they couldn’t. They believed they had to honor the commitment they made to the congregation to the letter and couldn’t be flexible on that point.

Unfortunately, this all took place before the 2008 recession when inflation was high. It took them six months to raise that other three percent and, during that time, inflation also went up three percent.

Even though they raised the needed percentage, they found they were still three percent short due to rising construction costs. As a result, at the end of three years, when their campaign had run its course, the church voted to move forward with the cash they had in hand. The three-year delay cost them $500,000.00 in construction cost and denied them the ministry space they needed for another three years.

The moral of this story is that financial flexibility is important. Setting an arbitrary goal can cost you in the end. Covering the initial three percent through a loan would have meant a very small monthly mortgage increase for that large, healthy church.

Expand Your Knowledge

If you would like to hear more of the wisdom—and cautionary tales—that our team has to share, visit our website today and sign up for our i3 webinars. Unlike building costs, we’re pleased to inform you our webinars will never go up in price—because they are always free.

 

By | August 15th, 2017|Advice, Church Building, Financing|0 Comments

How Too Many Committees Might Spoil Your Church Building Project

If you’re a church leader, you probably spend a lot of time dealing with various ministry teams or committees. Whether you’ve got committees to chair, manage, or attend, you likely work with numerous groups of volunteers who are helping your church thrive and grow.

Committees are sometimes necessary, and are sometimes great—but they can also be a problem.

The adage “Too many cooks spoil the soup” can apply when you have too many committees working on your church remodeling or building project.

Every Church Building Project Needs a Leadership Team

The McKnight Group’s church architect, Philip Tipton, has accumulated numerous stories—often cautionary tales—about churches that have had varying approaches to committee responsibilities. Philip offered some good advice during a recent free i3 webinar.

You probably won’t be surprised to read he believes a church building project will work best when the church designates a single committee to handle the task.

A single committee makes it a lot easier for a church construction company like The McKnight Group to interface with your church and understand its needs and priorities.

When the members of your committee are authorized to communicate with members of our team, it helps keep the project moving forward and the marching orders synchronized.

The Pitfalls of Multiple Committees

Now for one of Philip’s cautionary tales. There once was a church that had a long-range vision committee. That committee developed the idea of a church remodeling project, then handed its vision off to the phase-one building committee, which got the project started and hired a building contractor.

Problems occurred partway through, however, when the phase-one building committee completed its work and handed the project off to the finance committee.

The finance committee had not discussed the long-range vision or developed the design. Nor had it been involved in hiring the building contractor. It had the power of the purse, but hadn’t been included in the vision or the reasoning behind the decisions that had been made so far.

The contractor, on the other hand, experienced mental whiplash when trying to communicate the church renovation project to people who only cared about the bottom line.

And that wasn’t all. Later, the finance committee handed off the project to the interior design committee to oversee the finishing touches, so there was another committee that needed to be included in the process.

Every Church Construction Project Needs One Leadership Team that Understands the Mission

We hope this story illustrates why we believe that one single leadership team should remain involved with a church building or remodeling project from beginning to end, vision through completion. As we said in another post, the makeup of this team is critically important to the success of your venture.

If your church needs to have a long-range vision committee, a phase-one building committee, a finance committee, and an interior design committee, that can work. But be sure to designate at least one member who serves on all the committees to help with communication and continuity. Or be sure to designate one member of each of those committees to be on the building committee.

That way the needs of each of those committees are represented in a single group that is empowered to work on the project from beginning to end, understanding exactly how your church vision will be realized in your successful building project.

Find Out More

To learn more about the power and perils of committees, as well as other aspects of church remodeling and building projects, visit our website. There, you can also take advantage of our i3 webinar series—just sign up! They’re all free.

By | August 1st, 2017|Church Building|0 Comments

Project Completion: The Summit Church

The McKnight Group Announces Completion of Remodel in Indiana, Pennsylvania.  

Recently completed was the addition of a two-story Children’s and Youth Building in addition to the remodel of existing classrooms into new foyer space.  The new Children’s and Youth Building consists of classrooms, children’s worship space, restrooms, and play area for the children on the first floor, and restrooms, classrooms, and worship space for youth on the second floor. 

The expanded lobby provides more room for the café and a new women’s restroom.  This project cost finished under the original budget and The McKnight Group was able to return those dollars back to The Summit Church for its ministries.

Construction Start:  July 2016
Construction Completion:  April 2017
Remodel: 3,660 SF
New Construction: 12,146 SF First Floor, 5,637 SF Second Floor

Owner: The Summit Church, Indiana, PA
Design/Build Firm: The McKnight Group, Grove City, OH
General Contractor: McKnight Development Corp., Grove City, OH
Architect/Designer: McKnight & Hosterman Architects, Inc., Grove City, OH

 

Models and Principles: What Does—and Doesn’t—Transfer from One Church to Another

Let’s face it: At one time or another, many church leaders have dreamed their church could be like one of the many well-known mega-churches. These churches have performed so well, and had such an impact on their communities that their models for ministry and buildings are naturally admired across the country.

When it’s time to build or remodel your church building, it’s important to understand that not every church can be a well-known megachurch—nor should every church ministry or building look just like theirs.

Seeing Ideas that Work

The McKnight Group’s chief Design Architect, Philip Tipton, has been designing church facilities for over 20 years. During that time, he has traveled across the U.S., touring churches and learning from their leaders. He has carefully considered what design principles might be learned from various churches. Principles that can be applied everywhere, independent of location, demographics, culture or size. Philip’s advice is to discover what works for your church by focusing on these principles instead of simply attempting to copy models.

Models Vs. Principles

While a model is based on a single example, a good design principle can typically be observed in a number of church buildings and ministries. Principles are developed over time, by learning about multiple successful ministries and seeing them in action.

Location, Location, Location

A “model for ministry” is the idea of imitating a concept with which one church has had a positive experience. The fact is, however, that no single model for ministry will work for every situation.

A model that precisely imitates one church, for example, won’t necessarily work in another part of the country. This is often due to differences in the culture and personality of the community—its needs, its expectations.

The Best Mix for Your Ministry

At the McKnight Group, we see a church building as a tool: A device that facilitates ministry. What will do this best in your community is a mix of broad principles along with the scale of your church, and its specific demographic and cultural elements. Yes, sometimes a model from another church can be applied, but only if the situation is right.

This is something we can only understand by talking with you, visiting you, and getting to know your ministries and needs. To learn more about the services we provide, contact us today. And by all means, to learn more about church building and remodeling, visit our website and sign up for our i3 webinars—they’re absolutely free.

By | July 26th, 2017|Church Building, Church Design|0 Comments

A Financial Planning Checklist for Your Church Building Project

Over our last several posts, we’ve been talking about the financial planning necessary to ensure a successful church remodeling or church building project. While it’s always better to start on one of these projects sooner, rather than incurring the increased cost of waiting, some churches aren’t ready right now financially. There are, however, steps church leaders can take immediately to be ready when the time is right.

We’ve put together an easy to follow checklist to help prepare your church’s finances for a future building or remodeling project.

When it comes to building financial strength, the first steps are common sense things.

Getting Ready:

  • [  ] Operate within the church’s income. If you spend more than you take in, it will obviously be difficult to get needed financing in the future.
  • [  ] Create and grow a church building fund. Put money aside now, before you’re ready to build to get a head start.
  • [  ] Keep good records. Lending institutions respond better to detailed financial information.
  • [  ] Grow your church both numerically and financially. Increased income from new members and from current membership can quickly improve a church’s financial position.
    • [  ] Do this by increasing the church’s number of giving units,
    • [  ] And increasing the amount per giver, and giving unit.

Eventually the time will be right to approach a bank or lending institution to secure financing for the anticipated church building project. Here’s what you should have in hand:

Leadership History:

  • [  ] First include the Pastor’s résumé. Financial institutions need to know a church is well run.
  • [  ] Provide backgrounds and details of the governing church body members.
  • [  ] Indicate what type of governing body the church uses, whether it’s a board of trustees, elders, church board, etc.

Project Information:

  • [  ] You’ll need a written summary of the project. Lenders need to know your vision and how the building project will benefit the church community.
  • [  ] You should provide a comprehensive budget and estimate of costs. There are four main components of a comprehensive budget.
    • [  ] The biggest chunk of dollars will be the building itself. It’s also the least difficult to estimate, relatively.
    • [  ] Next is site work: the sidewalks, parking lots, utility lines, dirt work, etc.
    • [  ] Don’t forget you have architectural and engineering fees, and building permit fees to consider. Make sure they’re included.
    • [  ] The fourth component is furnishing, fixtures, and equipment. Added together, these four areas will give you a comprehensive budget to present.

Funding Plan

  • [  ] How much cash is on hand?
  • [  ] How much do you need to borrow to complete the project?
  • [  ] Where will other funds come from? Provide details of the current capital campaign, its projections, pledges, and results so far.
  • [  ] Detail any help you’re getting to run the capital campaign stewardship. Hiring a consultant typically means greater prospects of success to lenders.
  • [  ] And then provide a historical campaign collection if you’ve done them in the past.

Being prepared with all of these items will put you well on the path to secure funding for your project in today’s economy.

Learn with Our Webinars

If you have questions, we’re here to help. Just give us a call. And for other great church building and church remodeling resources, sign up for our free i3 webinars—simply visit our website.

By | July 18th, 2017|Church Building, Financing|0 Comments

Looking at Church Financing Issues from a Big-Picture Perspective

No two church building situations are the same, which sometimes makes it complicated when answering people’s questions about church financing and budgeting. In this post, we address some specific church building and renovation questions that have come our way, recognizing that it’s not always possible to pull back and generalize.

Estimating Basic Church Building Costs

Many times, when church leaders begin investigating the idea of a new building or renovation project, they contact us with questions. At this point, before they can consider church financing or capital campaigns, we hear the most basic query: “How much does it cost to build a new church building?”

As you can imagine, there is a lot to consider when answering that question. The best estimates are based on square footage, so churches need to have a vision—a basic idea of what they want to do—and figure out how many square feet they would need to accomplish those goals. This doesn’t mean they need to have architectural drawings already, but they do need to think through what spaces they need.

Calculating Square Footage Costs for Church Financing

Once they have a basic idea of their church building square footage, we can have a conversation about financing. However, we can’t guarantee a final cost without more detailed information. In a recent post, we discussed the elements of budgeting that information: site work, the church building itself, various drawings and fees, and the furnishings and equipment you will need to finish the interior spaces.

However, there is a very general rule of thumb: The square footage cost of those four components typically runs from $200 to $250 per square foot here in the Midwest (church leaders need to remember that construction costs differ depending on what part of the country they’re in). That’s for new church building construction, and it doesn’t include the cost of the land.

The price will likely increase if the church building is going to be closer to a large city or built in a union area. In the southern, more rural parts of the Midwest, or in the South, those cost-per-square-foot numbers can go down a bit. We still think it’s best for church leaders to estimate $200-$250 per square foot when attempting to arrive at a big-picture approximation of their church financing needs.

Options for Very Small Churches

We also hear from very small churches that want to understand their church building options. Some church leaders find themselves in difficult situations where they have very few giving units and building resale values are very low. They really can’t sell their building for what they think it’s worth, but they can’t afford to maintain it either. The building may not even be worth enough to be used as loan collateral.

In situations like this, while it might make sense to obtain financing for specific maintenance projects, such as a new HVAC system, it really isn’t a good idea or even possible to get church financing for general maintenance costs.

Sometimes when a church building is not sustainable, the only option is to consider all options. Some less tenable like selling their church building or more sensible like merging with another church that’s in a similar situation. Ultimately, it comes down to wise stewardship of what God has given.

Learn More

Wise stewardship is also about making good use of all the information you can get, in order to make the wisest decisions. That’s why we offer our free i3 webinar series: to inform church leaders about the best church financing, building, and renovation options available.

Sign up today for our webinars to make sure you have the information you need—simply visit our website.

By | July 11th, 2017|Advice, Church Building, Financing|0 Comments

Get the Church Financing You Need: 4 Elements of a Comprehensive Budget

There are many steps your church should take when preparing to construct a new church building or undertake a church renovation project. One is getting a church funding plan. Without it, your project isn’t going to get very far.

Chances are you’d think—in the beginning, anyway—that the cost is equivalent to the amount of money needed to construct the building.

However, there is a good deal more to any church building budget, and if you want to optimize your church financing, you need to know what comprehensive budgets entail.

4 Elements of a Comprehensive Budget

Essentially there are four elements to a comprehensive church building budget. The largest piece—the third element, if you’re looking at this chronologically—we’ve already mentioned: The cost to construct the building.

The first part, however, involves what we call “site work.” This is preparing the ground where the church will be built. It must be level and solid enough to handle the weight of the building, plus water, sewer, gas, and electric lines all need to be laid before the building goes in. Furthermore, site work must also be done for the parking lots and sidewalks including their actual installation.

Next, the second element, which involves the various fees that must be paid for drawings, approvals, and permits prior to the building being constructed. There will be architectural drawings to be drafted and approved, along with structural, plumbing, HVAC, and electrical engineering components that must be individually planned and integrated into the overall design. There are also building permits to be issued and soil samples to be taken and analyzed.

The final, fourth, element is everything that goes inside the church building once it has been constructed. We call it “FF&E,” or Furnishings, Fixtures, and Equipment. This includes the furniture, appliances, all your audio/visual equipment and technology such as servers, WIFI, and alike.

If you walk through your current church building and pay attention to everything that’s been installed in every room, you will discover there’s quite a bit of FF&E that must be either brought over from the old building or purchased for the new.

Taking it all into account

For example, let’s imagine a roughly $750,000 church building construction project. We need to budget approximately $61,000 in fees, another $18,500 for inflation (because no church building is built in an instant, and costs will go up the longer it takes), and another $101,500 or so for FF&E.

This means the total budget for the construction project is over $930,000.

Why a Comprehensive Budget Boosts Church Financing?

When you, as church leaders, approach a lending institution for church financing, that institution wants to know you’ve done your homework. A comprehensive budget, covering all four areas, shows you’re well-prepared and improves your chances of getting whatever financing is needed to complete the project.

Find Out More

We have more resources available for you regarding church design, building, and renovation. To learn more about better budgeting, see this post. To learn more about church financing and a whole lot more, visit our website, and sign up for our free i3 webinars.

By | July 5th, 2017|Budgeting, Church Building, Financing|0 Comments

Project Completion: Church of the Savior

The McKnight Group Announces Completion of Remodel in Nicholasville, Kentucky.

Church of the Savior partnered with The McKnight Group to take steps toward a grand vision.  This process began with Phase I which was completed in 2012.

The McKnight Group has now completed Phase II at the Church of the Savior in Nicholasville, KY.  The scope of work includes a 23,133 SF building addition. Features included a 750 seat worship center, platform, lobby, café, nursery pod with six classrooms, restrooms and an audio – video booth.  Also, included is the basement of 4,565 SF and a mezzanine level of 1,100 SF. The new space ties into their original building and the previous addition The McKnight Group designed and constructed in 2012. 

Addition: 23,133 SF
Construction Completion: June 2017

Owner: Church of the Savior, Nicholasville, KY
Design/Build Firm: The McKnight Group, Grove City, OH

Seize the Season: Plan Now for a Church Building Fall Stewardship Campaign

Many of us regard summer as a time to relax, take vacation, and generally ease up on the pace of life. However, if you’re thinking about conducting a church building stewardship campaign in the next six months, you can’t afford to take a summer break. Why? Let us explain.

Timing Is Everything

Don’t misunderstand, summer is a bad time to conduct a stewardship campaign—we’re not suggesting doing that. As you might imagine, with all those summer vacations people take, a lot of your congregation would likely miss out on the campaign if you held it over the summer months. (December is also a bad time for stewardship campaigns, as people’s Christmas and holiday travel plans create too many distractions.)

But a stewardship campaign involves more than what most attenders see. If you want to conduct a fundraising campaign in the fall, you need to spend the summer planning it, and that’s why you can’t afford to take the summer off. The best times to conduct the public portion of your stewardship campaign is either September through November or February through May.

Understanding the Stewardship Campaign Timeline

When it comes to planning a fundraising campaign for your church building, you need to set aside four to six months for the entire process. The first half is for your behind-the-scenes work, setting up the process, working with a consultant (which we highly recommend), and making decisions about how to move forward.

Once the groundwork is in place, you then spend a number of weeks in the actual public campaign itself, culminating in Pledge Day, when you ask everyone to officially make a financial commitment to your church building or renovation project.

After those pledges are made, the traditional timeframe is three years for people to fulfill their pledge commitment. They might make contributions toward their total on a monthly, quarterly, or yearly basis.

However, we are also finding that younger churches in locations with more transient populations are now launching one- or two-year stewardship campaigns to ensure pledge commitments are fulfilled before church members move on.

Bringing in the Professionals for Your Church Building Funding Campaign

So how do you know what length of campaign is best for you? This is one of the many reasons why we believe a professional stewardship campaign consultant can be an important investment in the success of your church funding project. Consultants can help you determine the best timing and length of your campaign.

Studies show that using a consultant also increases the total amount of pledges you will collect in your stewardship campaign. Consultants bring in an average of 50 percent more in total pledge dollars than churches that run their fundraising campaigns “in house.”

Another reason to use a professional consultant is that lenders view stewardship campaigns more favorably when they have professional leadership. This means lenders are likely to give you more credit against outstanding pledges than if you did your fundraising in-house.

More Resources to Assist with Your Stewardship Campaign

You can learn more about the impact of professional assistance in our previous post on the subject. To view a list of stewardship campaign professionals we recommend, visit our website.  While you’re there, sign up for our free i3 webinars to keep up with the latest church building insights.

By | June 27th, 2017|Church Building, Financing|0 Comments

Finishing Touches for Interior Design Frequent Questions

Over the past several months, Jennifer Snider, our interior designer, has been responding to your questions about church interior design. In this post, she wraps up the series by taking a look at two of the finishing touches you’ll want to consider for your remodeled or new church building: appropriate furniture and signage.

Embracing Furniture Flexibility

You can see in this first image, showing a seating area at Archbold Evangelical Mennonite Church, that they’ve set aside a place in their church building for people to gather for fellowship. In this case, they’ve provided ottomans instead of coffee tables. This allows for maximum flexibility, since each ottoman can become a seat to accommodate a larger group. They also chose individual chairs rather than sofas or loveseats, making it easier to rearrange the furniture to suit groups of varying sizes.

Flexibility is also key in the café, as you can see in this picture from Gateway Church of the Nazarene. Here they have intentionally chosen to use square tables rather than the more common round tables. This provides flexibility since it’s easier to push a few square tables together to furnish a larger group.

Investing in Furniture Durability

Another element of successful church interior design is to choose furniture that is commercial grade. This seating nook at Blue Grass United Methodist Church, for example, uses commercial-grade seating, even though the chairs look as though they could have come right out of someone’s home.

Code requires church buildings to use commercial-grade materials. Commercial grade furnishes are also more durable and will last longer, which is essential given the higher volume of traffic a church can expect. The warranties of residential grade products will also be void if used in a commercial setting.

Making the investment in commercial grade is also good stewardship. You want your new church building or renovation project to stand the test of time, just like you want your church vision to continue growing your church community.

Welcoming Guests with Proper Church Building Signage

Another factor to consider in your church vision is how you welcome guests. If people walk into your church building and can’t find their way around, they won’t feel as welcome and may not return.

In this picture, also from Gateway Church of the Nazarene, the entrance to the auditorium is clearly marked. In addition to helping guests find their way around, such signage introduces them to your church’s vocabulary. “Auditorium,” “worship space,” and “sanctuary” could all be names used for the same space. Clear signage helps guests begin to understand your specific church vision.

One good way to find out where you might need signage in your church building is to walk in the front doors, pretending you haven’t ever been there before. Would you know where to take your children for children’s church? Would you be able to find the restrooms? Could you find your way to the worship center or sanctuary or auditorium? Whenever you aren’t sure where to turn, that’s a good place for signage.

More Church Interior Design Tips

We hope you’ve found this FAQs series helpful. If you want more tips on the best church interior designs or help understanding what makes a great church building, sign up for our free i3 webinar series (simply visit our website) or give us a call at 800-625-6448. We’ll be glad to help.

By | June 20th, 2017|Church Building, Church Design, Interior Design|0 Comments