Winning The Battle But Losing The War

Winning The Battle But Losing The War

Two Changes in Thinking …. and One More to Come!

DAVID MCKNIGHT | PRESIDENT

DAVID MCKNIGHT | PRESIDENT

If the economy has not affected your budget, feel blessed!  The economic down turn that began over three years ago has affected a large portion of church budgets and capital stewardship campaigns.  The result of this economic condition has produced two shifts in thinking among church leaders about building programs.

The first adjustment in thinking is increased consideration of downsizing a church project. Churches always have had more vision for ministry and buildings than money.  In our current economy, church leaders have lowered their expectations of what they can finance and are looking for more affordable solutions.  The result?  Churches are remodeling existing space and entertaining small additions in lieu of large wings or new structures.

This is healthy!  There are many large churches with good, but older buildings.  They don’t need to spend money on new buildings but can instead spend a fraction on rearranging and remodeling existing space, which enables ministry and meets the demands of growth.

Failing to move ahead can be unhealthy.  If a facility is limiting growth because of being too small or not flexible enough for ministry then growth will slow.  A stubborn church in the midst of an urgent facility need will hinder growth and cultivate a sense of failure. Serious consideration of innovation solutions provides a welcome dose of prevention!

Strategic financial preparedness. Secondly, churches are now saving up more funds in advance of a building project and planning multiple capital campaigns to pay for facility expansion.  As lending institutions have tightened requirements, churches are using modest projections for growth and income.  While this can help provide financial stability it can also delay projects to the point of abandonment and stifled growth.

Waiting to raise funds is good if you have the time and inflation is low.  If the building need is not urgent and you started raising the funds early, it can be great benefit.  However, in the future this strategy will become less effective than it has been the last three years.

One more thing to come:

During the past three years construction inflation has been minimal.  Some localized geographic areas have had more inflation than others, but generally, inflation has been low the past three years compared to the previous 5 years.  It is reasonable to assume inflation will accelerate as the economy recovers.  As we know, global unrest and fairly recent changes from national to global commodities have directly affected inflation here in the United States for America.

High inflation means every year a construction project is delayed overall cost increases by the rate of inflation, 5%, 6%, 7% or more.  Compounded year after year, this amounts to a lot of dollars and quite possibly outweighs the value of saving money in advance and going without ministry tools that effectively enable growth.

“You might be winning the battle by saving money, but you may be losing the war.”

If you are in savings mode, ask the professional that you are working with to update your budget every six months so you understand the current cost, and can make informed decisions.

If you are not working with someone, please give us a call!

2011-12-29T15:25:05+00:00 December 29th, 2011|Advice, Uncategorized|