STRATEGIC LEADERSHIP
Q: What’ s one piece of advice you’ d give to a new church administrator stepping into financial leadership?
Sandy McClure: Evaluate where you are before deciding where you want to lead. Get to know the people, the culture, the senior pastor, the board, the finance committee. Get ingrained and listen. As liaison between staff and the board, communication will be over half your job. Don’ t rush to‘ fix’ things.
David Lee: If you’ re new to the position, don’ t feel like you have to figure everything out. Don’ t feel like you know need to know everything. One of the most valuable aspects of The Church Network is networking, right? Take advantage of the value TCN brings to administrators by collaborating together with other administrators who are walking this journey with you and with those who have gone before you.
Dan Mikes: I think those are all good points. And I’ d encourage a new administrator to review the church’ s internal accounting procedures and make sure they’ re in place in such a way that you can provide leadership with timely and well-informed assessments of your budget performance. As a lender, we don’ t need a CPA-prepared statement to make a loan. But we do want to know that net income ties to the balance sheet and the change in fund balance matches the year-over-year difference in net income— those kinds of things.
PREPARING TO BORROW
Q: Speaking of loans, how can churches prepare financially before seeking funding for a building project or renovation?
David Lee: I think we all— Dan, Jeremy and I— would say the same thing: have a conversation early with any of the experienced church lenders and try to identify how much you can afford. It’ s no different than looking for a home and falling in love with it. You love the community, the builder, everything about it, but then realize you can’ t afford it.
Talking with a church lender early will help your church right-size the budget, whether it’ s an expansion, renovation or new construction project. Don’ t put the cart before the horse in these situations.
Sandy McClure: It’ s critical to have strong financials and be able to identify trends. Consistency in reporting is essential as it provides reliability from year-to-year. That’ s something banks want to see.
Jeremy Moore: Yeah. And I would say, start to live as if you already have the loan you want. As you get ready to borrow that $ 10 million for the next project, go ahead and start putting money away. This will do two things: first, it shows the banks that you have the ability to make this payment on a monthly basis. It also has you starting to stockpile cash. So maybe you won’ t need $ 10 million; maybe you’ ll need $ 7 million or $ 8 million instead.
Denise Craig: Sure. I think sometimes people don’ t realize the things that you actually need to share to apply for a loan. Like, how long has your pastor been there? If the pastor were to leave suddenly, is that a financial risk? There are some aspects like this that don’ t seem financial on the surface but may come up in conversations with the lender. And you can always ask lenders: What will I need to have prepared for you? Getting that list before you even get started is important.
LONG-TERM PLANNING
Q: What trends are you seeing in how churches approach capital campaigns, reserve funds, or long-range planning?
Dan Mikes: Two types of fundraising are popular and common in recent years. First is the one-fund approach— typically a two-year pledge campaign which addresses every aspect of operations. We’ ve seen this be successful in many instances, as it substantially raises core giving over those two years. Then there’ s the three-year capital pledge campaign where pledges are exclusively for property acquisition or a construction project. As a lender, this is easier to work with because in addition to the long-term loan we
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