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.