With schematic plans and a budget in hand, you now need to determine how to pay for your dream church building. Such projects are typically funded by some combination of having cash on hand, raising money, and borrowing it.

While sometimes a church has all the funds it needs for a building project, the occurrence is rare. Most churches will need to raise some or all of the funds for the project through a stewardship campaign. Afterwards, whatever additional funds are needed can be borrowed through a lender.   

Fundraising Stewardship Campaigns

Typically, stewardship is conducted in one of two ways. The church can hire a consultant, ideally for a flat fee, to run things, or it can self-manage the fundraising campaign. Either way, the process will take at least six to nine months, from campaign planning and prep time to the end.

There are two times a year that work best for these types of campaigns: fall and spring.

Fall campaigns typically kick off in September and finish up just before Thanksgiving. The timing of the spring campaign will depend on where Easter falls on the calendar. If it’s later in the spring, you can start after January 1 and wrap up your campaign before Easter. If Easter is earlier in the year, you could start the campaign after Easter and end it just before summer break.

We offer more details on this process to help you get started — check out Key Capital Stewardship Campaign Concepts for Church Funding. A successful fundraising campaign can encourage lending institutions to loan you more for your new church building.

Borrowing Money from Lenders

When it comes to borrowing money, church leaders typically choose one of two paths, working either with a denominational or traditional lender. Denominational lenders know more about the business of churches, so it may be easier to communicate your church’s financial health, but available funds may be limited. Traditional lenders should have more money to lend but will require more education and documentation regarding your church. It may also take an additional month or two to get a commitment from either type of lender, especially since appraisals can hold things up, depending on the market demand for loans.

For more information on lending, read How Lending Institutions Account for Your Church Building Capital Campaign.

Secure the Funds Before You Draw the Construction Plans

It’s an important part to know that you have a way to pay for the building before you draw the construction plans. Why? Because the schematic drawings should not cost you a significant amount of money. However, the construction documents, depending on the size of your project, are a much larger investment. A short timeframe might be a reason to create them early, but you should know the risks.  In other words, you don’t want to pay an architect hundreds of thousands of dollars to draw up a building that you’re not sure you can afford to build.

The McKnight Group offers free webinars that discuss topics related to your church building and design project, such as funding, successful interior design, mistakes to avoid, and more. Register for one or more of our i3 webinar series to hear from our experts and get your questions answered.