Thursday, March 26, 2015

Debt Retirement - A Priority For Churches

Is debt pinching your ministry, forcing you to cut back on staff, eliminate ministries and generally putting an uptight feeling into your congregational life? A capital campaign can strengthen your church finances and get you back on track. Initially a debt retirement campaign seems unappealing, but it is the best course to reduce the danger of turning off your people through constant pulpit appeals, urgent letters, rearranging financing, or the possibility of bankruptcy.
The tough economy has caught many churches by surprise who in the good times of "borrow and build" incurred more debt than is prudent. The universal "debt law" is to
    * Leverage no more debt than 3 times your income
    * Indebtedness doubles according to the rule of "72" which means whatever rate of interest you are paying, divide that into 72 and the number you get will be the period of time over which debt doubles. For example, 72 divided by 6% = 12 years.
Your church may be reluctant to undertake a debt retirement campaign because the economy is tough and people are struggling with reduced incomes, investment declines, lay offs, etc. Furthermore, debt retirement lacks the appeal and excitement that comes with building or expansion. The fear is that members won't respond without some tangible result for their efforts. The challenge of debt retirement is to develop a message that makes sense to the congregation and which is manageable for the people to support. How can the church motivate the people to dig deeper and participate in extra giving?
To conduct a successful debt campaign, the message must focus on the following:
    * how debt impacts the "people" and "ministry" of our church like pastors and staff, missionaries, children's/youth, poor and needy, our city whom the church is mandated to evangelize
    * the integrity and credibility of church leaders who are entrusted with the management of the church's finances and are committed to operate church finances either debt free or within the margins of conservative debt
    * to make giving possible for the people by showing that if everyone gives the "widow's mite" we can over time correct the debt imbalance in our church. For example, with blue collar wage earning people they can be challenged to give the first hour wages of their week; or with professionals or business people to consider tax advantaged giving through giving equities that have lost value which now can be taken to reduce taxable income
    * the purpose of the capital campaign is to get the church through paying off or reducing its debt as quickly as is possible and to conserve dollars in order to get on with funding the real values of our church which are worship, outreach/inreach, missions, fellowship, Christain education, and so on

A capital campaign will plow through your church to aerate the ground for new mustard seeds of hope and energy. The campaign will have the benefit of forming teams who pull together to make the future possible. It gets the people into a positive formation with ostrich heads out of the sand. It is a proven plan to develop information, togetherness, ownership, and movement forward.
Is now a good time to consider a debt retirement campaign? Why not wait until the economy gets better? Now is a good time because during a bad economy the financial excesses of the past are brought to light so that people need to rely on God's provision and help. It is a time for prayer, faith and trusting for God's provision. Bad economies lead people to be more creative and disciplined; church attendance increases; new ideas and innovations surface; people come to church to find God's help. Also, bad economies do not last and over the three year giving period people are rewarded for their new found frugality and penny pinching. It is when times are the most ugly that churches can best teach God's principles of life management. Bad times are the best time for people and church to grow and learn how to make it better for the next economic cycle. The above paragraph contains the message to present to your people for your church's debt retirement campaign.
King Solomon, the wisest and richest man of his time says, "For the dream comes through much effort...when you make a vow to God, do not be late in paying it, for He takes no delight in fools. Pay what you vow!" Ecclesiastes 5: 3-4. So let's be good money managers and get on with the task of eliminating or paying down the church's debt.