Financing your ministry’s project
Few topics elicit a greater response than money * how we get it and how it’s used by us.
Understandably, it’s also a tough subject with regards to a church or ministry assignment.
If your ministry is considering placing new wing on the chapel, or building a gym, or simply renovating the sanctuary, how can you finance the project?
? Get hold of pledges through a capital strategy?
? Set aside savings as part of frequent expense allocation?
In many cases, the particular wise answer is a mix of the 3 injuries.
There isn’t a simple, one-size-fits-all answer to these kind of questions. Each ministry will need to committ to this based on its unique situation plus outlook.
So, what considerations will assist your team find the best remedy for your own unique project?
Borrowing to fund a project
Most ministries will acquire some a higher level debt to complete a major job. The financial health and scenarios of your ministry will influence the quality of debt available, and at what cost. Your church’s perspectives about borrowing, governance, and ministry eyesight will also be key considerations when working with lenders.
Other considerations include:
?Will debt be repaid thru operating budget, savings and also capital campaign?
?How do you assess varying loan products, including fixed interest versus resetting fees, balloon mortgage versus wholly amortized or differing loan covenants? [ Regarding details, read our old series installment, Refinancing : decoding the process
?Are there more events that need to be aware of the process, as if your congregation, a governing entire body within your denomination, or a current mortgage lender?
? How much would you qualify to gain access to?
? What monthly payment will you try to make on a loan?
?How will the additional debt expense impact ministry spending budgets?
?What percentage of equity do we really want in the project? Will the lender require more fairness?
? What collateral will be used for the loan?
Saving to fund a project
Some higher level of saving to fund a project is always wise. You might decide to save amount to fund the
equity or down-payment section of a project, or set aside doing work funds over a long period of time to afford all or part of the project. Despite the fact that saving minimizes the amount of finance needed and the interest you spend on a loan, it might boost your cost over the long term. Labor, supplies and expertise are variables that can have significant swing motion in actual cost with time.
?Do you have savings set aside that can be used for this purpose (designated for this special project or unrestricted)?
?Chance cost to ministry is also a issue. Is the time to raise or save you the full amount an acceptable hold off versus the ministry that could happen once the project is completed?
?Should you program specific fundraising activities or congregational appeals?
Did you know one of Jesus’ quite a few parables was about saving and refining their plans project? Check out Luke 17:28 C 30.
Conducting a money campaign conjures a range of allergic reactions. You might have had a negative experience within hard sell tactics in the past, or you’ll have seen a campaign bring in impressive resources for ministry and generously bless each givers and the ministry. Again, the culture of your ministry needs to be considered as you plan a campaign.
? Do you hire a consultant?
?If so, how do you get a consultant that resonates with the tone of your ministry and has a history of profitable campaigns?
?Do you have internal expertise and experience to do a campaign well?
?What ministries can you ask for a referral into a successful campaign consultant?
Did you know the first recorded capital marketing campaign was conducted by King David of the Bible? Look into 1Chronicles28 and 1Chronicles29.