tax-season-giving-units-church-building-designTax season is upon us. Your church (hopefully) already sent out giving statements (by January 31) to everyone in your community who donated at least $250 to the church in 2014. You might think that information is only useful to your church attendees, who need a giving record for their own 1040 tax forms. In fact, it also provides insight into a key piece of financial data you will need should you seek a bank loan for your next church building design project.

Collecting Financial Information Ahead of Time

It’s a good idea to think ahead when it comes to gathering all the information you will need to undertake your next church building design project. If a loan is to be part of the plan, you will need specific financial information to prove to your bank or other lending organization that you have the financial strength to take on a new church building design, renovation, or construction project. What all those 2014 giving statements provide to your church is an accurate count of stable “giving units.”

What’s a Giving Unit?

A giving unit is usually, but not always, a family unit. For example, if a husband and wife are each giving to the church, from two different checking accounts, you still tend to send out one giving statement for that family unit. That means they are one giving unit. On the other hand, a teen with a job might decide to start giving separately as an indication of commitment to the church, and you might send out a separate giving statement to that teen. If that occurs, you have two giving units in that family.

Naturally, giving units are very different than the number of people who attend worship on Sunday. A newly-married couple contributes two people to the number of attendees, while a family with five young children means seven attendees—but each family is just one giving unit.

What Do Giving Units Mean for Your Church Building Design Project?

The number of giving units matters to a mortgage lender for several reasons. First, because it mitigates the risk that a bank takes on when it gives your church a loan, the more giving units you have, the less risk there is should joblessness or some other factor affect the local community after the loan is made. Usually a bank wants to see at least 100 giving units before making a sizeable loan, but the bigger the number the better.

The number of giving units also is used by the lender to determine how much debt service a church can pay in one year. The rule of thumb is usually around $1,000 per giving unit (depending, of course, on other factors like the average amount given each year by those giving units). So, if your church has 100 giving units, that’s a maximum loan payment in one year of $100,000 or an $8,300.00 monthly payment.

Track Giving Units Information Now

Regardless of when you might think you’ll begin on your church building design or renovation project, you should start tracking giving units now. This is because banks also want to see that the number of giving units is growing over time. You can easily get your 2014 giving unit number by looking at how many giving statements you sent out in January.

As you prepare for your church building design project, you can learn many more useful tips by registering for our upcoming free i3 webinars. This way you’ll be well-educated and prepared when the time comes to break ground on your next project.