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.
- [ ] 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:
- [ ] 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.
- [ ] 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.
- [ ] 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.