This post continues our discussion about important financial considerations for churches planning a building or renovation project. We’ve talked about the role of lending institutions and borrowing money; now let’s focus on the capital stewardship campaign, and how that process can be integrated with money you borrow.
You Need Professional Help—Unless You’ve Done this Many Times Before
Your church’s community will be excited about your building plans and will want to contribute financially. Statistics show that a capital stewardship campaign can raise one to two times the church’s annual budget. But don’t expect this kind of result without the help of a professional capital campaign consultant. As any professional fundraiser can tell you, you can’t get money without money. Unless your church has already successfully—and recently—run at least one capital campaign, you may not have the in-house expertise to maximize the campaign’s success. Campaigns run without professional help typically bring in 30 to 50 percent less pledge money than those with help.
You Can’t Get it All—at Least, Not Right Away
Financing a church building project is a delicate dance. You need to raise funds for the project, but that process takes time, sometimes up to 3 years, and you’ll likely want to get your project underway before the campaign is completed. In addition, it will also take time to collect on the pledges your congregation makes during the campaign. Here again is where a good relationship with a bank will come in handy.
The Importance of Pledges for Your Church Building Campaign
When it’s time to bridge the gap between money raised, money on hand and money needed, the quality of those capital stewardship campaign pledges will matter. It’s true that lending institutions prefer to base loan amounts on the cash you’ve already received. However, especially if you’ve successfully raised money before, they are often willing to lend against a percentage of the pledges committed to your project. The amount loaned won’t be based on 100 percent fulfillment of your pledge drive, but could be as much as 80 percent if the drive has been underway for six to nine months, and banks can see how many pledges are being fulfilled.
There are several other options beyond bank loans and capital stewardship campaigns available to finance your church building or remodeling project that we’ll discuss in our next post. Meanwhile, feel free to contact us for help with navigating any financing questions you might have, and sign up for one of our free i3 webinars.