A recent study of over 1,000 churches across the United States who had recently completed capital campaigns revealed that seemingly subtle differences in the ways various churches approached their campaigns yielded startling and significantly different campaign results. The study was conducted in June-July 2010 by Volkart May & Associates, a Minneapolis-St. Paul, Minnesota based marketing and market research firm.
This week hundreds of thousands of churches across the nation will receive at least 42% less in contributions than what they could be receiving. The reason has nothing at all to do with the economy. The reason is impersonal methodology. Most churches in the United States simply do not ask their members for financial support in a personal, relational way. Many excellent pastors and church leaders with the best of intentions are systematically and chronically hindering their church's financial potential because they fail to ask properly.
When a shrinking congregation forced the century-old St. Gerard's Church to shut its doors in 2008, its fate was uncertain. The 800-seat church had been a pride of its neighborhood in East Buffalo, NY, boasting stained-glass windows, marble columns, and a basilica modeled after St. Paul's in Rome. But its roof was collapsing and the parish could no longer justify maintaining it for a congregation that had dwindled from several thousand families in the 1970s to a mere hundred.
I have shared about managing time as if every second was a precious commodity given to us by God that is to be spent wisely in order to bring Him the most benefit and pleasure. Also that we should view every talent, skill, learned ability, or spiritual gift as uniquely shaped in us by God so that it can be used by Him to build and advance His kingdom purposes. In this area we become like a violin in the hands of the virtuoso performer. As we allow Him God brings beautiful music from us through the gifts, talents, and abilities He has given to us. By the same token, if we do not surrender these abilities to Him, we can never get the same musical quality on our own.
By Jim Klote
The number of congregations around the United States with significant debt is growing every day. To say it is reaching epidemic proportions is not an overstatement. Years ago, most prospective clients called regarding the need to raise funds for new construction, renovation and property acquisition. Today, most calls discuss the need to reduce debt. The reasons they are in debt are many. Some have used a line of credit to pay for deferred maintenance issues; some have construction loans; others purchased property for future expansion that is now on hold.
I must confess that I do not like church indebtedness at all. There is certainly no economic advantage to a congregation servicing indebtedness for an extended period of time. Though, I often hear from church leaders that they believe debt for a church is good. I can understand the viewpoint of making church members feel they are needed through their offerings. I can even understand the desire to have members feel a challenge to support new and needed ministry opportunities. However, when the debt reaches a point where the current budget cannot sustain the payments, or the loan payments significantly impact the current ministries, I cannot see the good in that debt. When 40-50% of a church's budget is earmarked for debt payments, it undermines the church's financial stability. It can undermine confidence in the church leadership.
One such congregation in debt had to substantially eliminate staff and cut vital ministries. The members of the church were unhappy. They voiced their disapproval by cutting annual pledges and weekly offerings. Some members even left the church.
There are two paths that church leaders should consider and they are not mutually exclusive. One involves more focused attention on the Annual Campaign. Ensure that most of your congregation is at least pledging. The second involves educating your congregation about the debt and conduct a focused and intense Capital Campaign to try to retire the debt in a 5 year period of time. Begin with a series of Focus Group Meetings to educate and inspire support for the campaign. Engage the members of the congregation in discussions of how the debt is impacting the annual ministries.
We are currently working with a congregation who considered using our services 9 years ago for a new building project. After much deliberation, the church leaders made the decision to not use outside counsel and conduct the campaign on their own. Unfortunately, with little focus and direction, the campaign was unsuccessful. However, when the decision to move forward, they voted to build the new $5 million facility in spite of a campaign yielding poor results. The years continued with $360,000 in debt service for the new building. After a full 9 years of debt service, the church leaders once again contacted use to help retire the debt. This time, they understood that hiring good and experienced counsel is an investment, not an expense. I only wish they would have conducted the campaign properly from the beginning. It would have saved the congregation well over $3 million in debt service alone.
These funds could have been used much more effectively for the church's mission in ministry.
Even if your debt is so large that you think it will take generations to retire it, it is this generation's responsibility to do their part now.
Jim Klote is President of James D. Klote & Associates, Inc. This nation-wide firm offers full-time and on-site Capital Stewardship consulting services to individual congregations for the purposes of new construction, renovation, debt reduction and mission and outreach. Offices are located in Falls Church, Virginia and St. Charles, Illinois. For more information please visit www.jdklote.com or contact us directly at 800-360-2315.
1-800-360-2315
