What You Need to Know About Debt Campaigns

by | May 30, 2018

Recently, I was reading through a magazine for church leaders when a quote in one of the articles caught my attention. The quote was, “Donors don’t give to pay down debt.” Having been personally connected to dozens of debt campaigns that have raised in excess of $170 million, I have found that people will give generously and sacrificially to address the issues and restrictions caused by debt. Moreover, a debt campaign can be highly energizing and catalytic in a church’s journey to realize their vision and mission of reaching people for Christ. However, campaigns focused primarily on debt require a very different approach and strategic messaging.

Campaigns to raise money for debt must connect to and be driven by the church’s overall vision and mission.

Simply asking people to give because the church has debt rarely inspires sacrificial giving. Remember – not one single member of your church is losing sleep because the church is in debt–except maybe the pastor or business administrator. The reason people are not concerned about the church’s financial obligations has much to do with the fact that many church members are struggling with their own debt issues. Therefore, the message surrounding a church debt campaign has to communicate how reducing debt will allow your church to reach more people, make more disciples, and grow your ministry.

If your church has debt, ask yourself the following questions:

  1. Has the debt had a negative impact in any way on the church’s ability to meet current operational needs?
  2. Has the church been forced to cut back or restrict ministry focused resources in order to service the loan obligation?
  3. Could the money currently being spent to service a debt obligation be re-appropriated to new ministries that could inspire and encourage your church and possibly attract new families?
  4. Have there been negative impacts on the church’s ability or willingness to start new and innovative ministries?
  5. Is there a mixed message being sent with respect to the manner in which the church is responding to debt and how the membership is challenged to view and manage personal financial obligations?

If you answered “yes” to any of the above questions, then moving forward with a debt campaign is imperative.

Communication before, during, and after a campaign should be open and transparent. The congregation needs to understand how the debt was incurred, how much exists, and the plans for paying it off.

Answer the following questions about debt clearly and concisely.

  1. Why does the church have debt?

Surprisingly, many of your church members do not know or may not remember how the debt came about. If the loan obligation is a result of building construction, members may assume if the building is complete it is also paid in full. If the church conducted a capital campaign but did not raise all of the needed funds, some people mistakenly believe the first campaign actually took care of all of the financial needs. Unfortunately, some people will believe the debt is the result of poor decision-making. Do not assume people accurately recall the events leading up to taking on the debt. Be proactive and transparent when communicating the cause or source of the debt. A clear and accurate timeline of events will provide a strong foundation for your campaign message.

  1. How much does the church owe?

Once the first question has been addressed, make sure there is no ambiguity regarding the full extent of the debt. As with all communication to the church, assume nothing and state facts in several different ways so people can fully grasp what you are saying.

  1. How much is being spent to service the debt?

People are often surprised by how much of the operational budget is needed to service a debt. Help your people see the debt total from both a monthly and yearly perspective. Show the debt service using a dollar amount as well as a percentage of total expenditures. For guidelines on the impact of debt service, go here.

  1. How much interest will be paid over the life of the loan?

The total lifetime interest of a loan creates the “ah-ha” moment for many where the reality of good stewardship comes into play. People are motivated when they can see how much could be saved in the long term by addressing the obligation more intentionally. People will become inspired when they realize how the interest saved could be used for ministry.

  1. How long would it take to retire the current debt if you did nothing?

Help your congregation understand the length and long-term consequences of the loan. Was the loan amortized over 10, 15, or 20 years? Could the reality be, at the current pace of repayment, your children and possibly your grandchildren will still be paying on the debt? Saving years, as well as saving interest over the life of the loan, is just good stewardship.

  1. How will the money currently being spent on debt service be re-appropriated for ministry?

Members need to understand the underlying reasons behind raising funds to eliminate the financial obligation. The goal is not just to eliminate the debt but rather to achieve specific ministry objectives. People are inspired to give more willingly and sacrificially when they understand the objective. Reducing or eliminating loan obligations is to free up resources so the church can engage in new and expanded ministries such as:

  • Starting a new ministry to reach more people
  • Creating a new staff position to address a ministry opportunity
  • Expand an existing ministry to meet the needs of your community

As mentioned earlier, people are not inspired to give so their church can be debt-free. People are inspired by the larger goal of growing ministry.

Include these elements in a campaign to reduce or eliminate debt:

  1. Use the church as an example.

Encouraging families and individuals to be financially free and teaching them how to live with margin is essential for the church. Provide personal financial management classes and encourage your members to free themselves of financial burden. A debt campaign sends the message that the church operates by the same teaching. Find more insights here.

  1. Include something tangible.

Debt campaigns focus on something that happened in the past. Many churches balance that “looking to the past” perspective by including something future-oriented and tangible. This could be a specific mission project or a low-cost facility enhancement. A word of caution here: without question, the primary focus in a debt campaign is eliminating or reducing the debt. Any “add-ons” should not interfere or reduce the potential for maximum results or disguise the main objective.

Keep in mind that the church does not have a choice about whether or not to pay its debt. It must be paid.

Your congregation knows it bears the burden of paying that debt. The only choice the church has is how to pay that debt. What is the best stewardship practice to deal with indebtedness? Eliminating or reducing debt is about changing the future of the church. It is about repositioning the church’s financial picture so the church can invest financial resources in ministry rather than in debt service. It is about effectively freeing the church to make future funding decisions. Changing the debt position in your church does not just impact ministry for two or three years; it repositions the church financially to reinvest in ministry for the next 10, 20, or 30 years. Reducing or eliminating debt is simply good stewardship, and a wise step that will deepen your congregation’s trust in your leadership.

2 Comments

  1. Very timely as we are just now voting to take on a capitol campaign for upgrading our facility. THANKS FOR THE GOOD INFO YOU ALWAYS OFFER.

    Reply
  2. These are great thoughts, Joel. Thanks. I will share this with others who are contemplating debt retirement campaigns.

    Reply

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Common Mistakes

Kristine: What are some common mistakes churches make when considering the size of their church capital campaign projects?

 Clif: Often churches fail to maximize their giving potential. For example, a pastor recently told me about the growth and enthusiasm expressed in his church regarding a $1,000,000 building project. The church’s budget was $750,000. Given the excitement surrounding the project, it seemed to me the church could likely raise more. I suggested the church look at other needs and consider adding them to the project and have our team assess the congregation’s overall support. Assuming the support is there, this church has the ability to conduct a more ambitious campaign and raise more money for the kingdom.

 

Timing of a Capital Campaign

Kristine: When is the best time to conduct a church capital campaign?

 Clif: The short answer is the best time to conduct a church capital campaign is when the vision is clear and the congregation is rallied behind the vision. However, some churches are too eager to break ground and end up eliminating a lot of the giving momentum. If you break ground before the campaign, you take away people’s ability to participate in helping your dream become reality. Breaking ground before the campaign will result in getting  a building sooner, but you will have far less resources to pay for it. Also, it will be three years before you can conduct another campaign—and that will likely be for debt. Be patient and wait to break ground when you are ready to celebrate the conclusion of a successful capital campaign.

 

Estate Gifts

Kristine: Should capital projects be paid for using estate gifts?

 Clif: Generally, this is not a good idea. Using legacy gifts for capital projects removes the responsibility of the church to help people mature in Christ through more generous giving. Estate gifts should be used to strengthen an endowment fund that enlarges the ministry and mission the church is called to do. It should never replace what present members are capable of and called to do. Have a campaign for the project you feel God is calling you to do, and then use the proceeds from the estate gift to move the church beyond that building and into life changing ministry.

 

Staff Positions and Missions Work

Kristine: Should churches consider adding staff positions or missions work to their campaign funding needs?

 Clif: The problem is you are hoping to leverage enthusiasm for a building project to get money for staffing and missions. These expenses should be funded through the annual budget rather than included in a church capital campaign. Lumping capital needs in with operating expenditures is most often a bad idea. People may resent having a portion of their donations designated to expenses other than capital, and they may choose to withhold their giving. Also, funding a staff position through a three-year capital campaign creates a significant problem after the giving period is over. How will this staff position be funded in year four? If you need to fund a staff position or support a mission endeavor, include these expenses in your annual budget and invite people to support it.

 

Leadership Support

Kristine: How important is it for the pastor and church leadership to express their support of the church capital campaign?

 Clif: Well how important is leadership in any arena? It is critical! If the boss showed up late for work and only showed interest in coffee breaks, would the employees exceed his passion? If a coach was not that committed to practice and winning, would the players give their all? Church members are very in tune with what leaders are serious about. They listen to hear what their pastor feels is at the core of Christian life. Specifically, they listen to hear whether church leaders just want money to pay bills or if they truly believe that generosity is vital to discipleship and living a fulfilled life. It is very important every pastor share their plans for giving every year and why they are making that choice. Members concerned about being a disciple will follow.

 

High Capacity Donors

Kristine: In God vs. Money, you suggest that pastors should build relationships with their high capacity donors. Why is this important?

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Clif’s books include Not Your Parents’ Offering PlateRich Church Poor Church, and several others. His new book, God vs. Money, is now available on Kindle and will soon be released in hardcopy by Abingdon Press.

God vs. Money

On August 21, 2018, my new book, God vs. Money, will be released. I wrote this book because I am firmly convinced our society, including the church, is in the midst of a war between the will of God and the lure of money. I am also convinced that money is winning the majority of battles because the opposition, the church, has ceased to put up a fight. God vs. Money is a call to arms. I implore you, as church leaders, to engage in this battle because, I believe, our lives depend on it.

Because God vs. Money is likely the last book I will write, I put every ounce of energy I had into each and every page. In doing so, I hope to get the attention of Christian leaders who must make attacking this foe a priority each and every day. My friends, if you care about the Kingdom and believe the Gospel of Jesus Christ is the only true salvation for the world, get this book. Going to war is never easy, but this fight is one we have to take on and must win!

Here is an excerpt from the Introduction:

God and Money both made promises. God has kept all of His and money has kept none. But money has better advertising and we keep falling for it. We live in a society where God vs. Money is a daily battle. It is a war and right now we are not winning.

 

In this book, I lay out a plan where those of us in church leadership can educate and inspire people who are capable of winning the war. These are the tools you are going to need to develop people who know how to go up against the lure of money and come out victors on the other side. I hope God vs. Money becomes a manual for pastors and church leaders to train and grow congregations of generous people who resist the lure of money and, instead, seek God’s will for their lives.

God vs. Money was not written to help you get more money.

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Let’s prepare for battle.

 

 

Here is what church leaders are saying about God vs. Money:

Mike Slaughter, Founder and Chief Strategist of Passionate Churches, LLC and Pastor Emeritus Ginghamsburg Church says…

Clif Christopher has been my main go-to coach in applying practical biblical strategies for stewardship in the local church. This is an excellent read for church leaders who find themselves in church cultures adverse to using the “Tithe” word. A great reminder that we as followers of Jesus are the means to resource God’s mission in the world with practical tools to help us apply.

Talbot Davis is pastor of Good Shepherd UMC in Charlotte, NC, and author of Head Scratchers and Crash Test Dummies says…

Clif Christopher has written a Stewardship Tour De Force in God vs. Money.  I found the book both sobering and inspiring – sobering in its analysis of our culture’s obsession with money and yet inspiring in its description of the spiritual power of generosity.  Christopher does not flinch in his directives for pastors and church leaders – and I for one am glad for his boldness.  Highly recommended.

 

 

 

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