What Can We Afford?

September 21, 2008

The one thing paramount in most churches minds is; “What can we really afford?”, “How can we pay for this?”  The money question looms large for most pastors, leadership teams and congregations.  It often makes even starting to think about building or adding on to facilities like trying to climb Mt. Everest! 

As much as it is important to walk through the steps of “Visioning” and “Master Planning”, it is equally important to plan for the financial picture.  The first steps need to be around the Visioning process and then ground those results in the realistic financial capacity of the church.  We have discussed “Visioning” in our article on “Ministry Driven Design”.  That is a great place to start.  For now let’s focus on affordability and financing. 

Let’s look at key items of a church’s financial picture:


Get your house in order. 

·         Have your Vision and Mission Statements written down and be prepared to explain how your financial picture reflects those statements.

·         Make sure you have accurate and up to date records of your membership (regular attenders is sometimes accepted), attendance in various areas of ministry

·         Clear financial statements.

·         Deal with any issues of credit or delinquency.  

·         Make sure your church bylaws are written to reflect adequate checks and balances with accountability.


Pre-qualify your church based on the industry standards of borrowing (project cost).

·         Have a clear budget that shows your fixed expenses (payroll, operations, debt/lease and rent/existing mortgage) and your ministry/missions expenditures.   Your fixed expenses should not be above 75-80% of your income.  Below 75% is really the most practical. 

·         A payment should not be above 25-28% of annual income.

·         A loan amount can be between 1 ½ – 3 times the size of the annual budget based on the previous 2 calculations.  Ie. Take 25% of annual income/budget and that would equal a future payment.  Then extrapolate that to what could be borrowed based on length of loan and current interest rates.

·         Add in any capital campaign fund raising.  Depending on whether the campaign is run by the church or an outside firm, churches usually raise approximately 2-3 times the annual budget in pledges.   Add in, also, any major contributors special contributions.  There are some variables based on the kind of project – trying to raise funds for only administration space or to pay off existing debt usually do not raise as much as children’s education  or new worship space. 

·         The end result is an approximate amount of funds available for a future project.  Remember, this only a loose prequalification.

·         Make sure your architect and potential builder are aware of these numbers, so that they can help design and build a project within your ability.  There is no point is spending money towards a design that is not possible based on your financial capabilities.


Explore your options on types of lenders.

·         Traditional Banks

Traditional Banks can be very helpful to a local church if there is sufficient relationship established.  The difficulty is that banks generally look at the church through the same lens as a business that operates for a profit.  

·         Church Bonding Companies

There are many reputable church bond companies in the market.  They offer 1st mortgage bonds to individuals within the church and in the States that the bond company is licensed.  They tend to understand church finances better than traditional banks because they understand how not-for-profit corporations receive and spend their monies.  They also offer the opportunity for a church to invest in its own project. 

·         Church Mortgage Companies

They are like traditional banks in their source of funds.  They will ask the same questions and expect the same documentation of financial and numerical records.  They will, however, like a church bond company, tend to understand church income and expenses in a more favorable light.


Questions that are often asked by banks and bond companies

They will ask the same questions of the church that they would ask any company.

Questions beyond what your assets and liabilities are. 

a.       They will want to know if you are ‘making’ money and growing in numbers of regular attenders. 

b.      They will want to know your governmental structure and if it is sound. 

c.       They will want to know if you have plans for succession in leadership and if the church has  a stable history.  These questions are good and should not be seen as adversarial. 

Putting the financial picture in place is not as much complicated as it is a detailed process.  Draw on any banking expertise you may have in the church.  Do not underestimate the power of your God-given Vision to propel you forward in any fundraising.  Bricks and mortar can motivate.  Ultimately, it is the vision that is planted in a congregation’s heart that will cause them to reach out in faith and move forward. 


There are few things as daunting to a church as a building program.  It comes with an incredible amount of expectations, hopes and dreams.  It also, inherently comes with a host of pitfalls and fears about the process.  Questions arise from “What should we build and how are we going to pay for it?” to “Will we be united as a church family at the end of the program or will we be wounded over differing ideas and desires?”

WL Perry’s signature process, “Ministry Driven Design” is critical to a church embarking and completing a successful building project.  It helps a church design something that reflects their unique ministry, promotes unity and participation, while it helps bring together all the teams of architecture and engineering, construction and financing with the church.  There is a wonderful synergy to be experienced as those teams partner together to produce a product that brings glory and honor to God and helps grow the Kingdom of God.  Here is the description of the Ministry Driven Design process.


·       WL Perry comes alongside to gain understanding of the unique DNA of a church. Using a variety of studies, surveys and interviews, we work to gain insight into the vision and purpose of the church.  As this part of the process unfolds tremendous unity and participation of the whole church takes place. 

·       There is professional evaluation by all of our in-house engineering staff of present facilities and site.  Sometimes the recommendation comes to consider relocation because present facilities or site will not accommodate the vision that God has given that local church.  There are many potential issues with zoning and codes that will be researched.

·       Financial analysis becomes critical at the very beginning.  It is one thing to dream a big dream and another thing to pay for it!  Many churches feel a little reluctant to reveal their financial status.  However, only a realistic appraisal of membership, giving and budgets will help the church complete a successful project.   It often means that the vision will need to be divided into phases over a period of time.  WL Perry’s goal is to make sure that the church is within their financial capabilities and not overburdened by a project.  That tension between wisdom and faith is the challenge that every growing church faces.  It is another element of helping maintain unity throughout a project.

·        We will use the information that is collected in the Visioning stage to begin to create some concepts of what the next step of the church’s new and existing facility might look like.  This is all within a Master Planning mindset.  Long range planning becomes key in any conceptual designs presented.  There will be a conceptual site plan developed and floor plans that reflect present and future ministry vision.

·       There will be a preliminary estimate of construction cost and plan for financing established to prepare to transition to the next phase of Ministry Driven Design.


The next step involves all the elements of design development and construction documents to prepare the church for the construction phase.  This design phase has these elements:

·       Working with all of the church’s leadership, appointed committees and departments the conceptual floor plans move towards refining and approval.  

·       Correspondingly, the financing picture begins to jell as a church selects a lending institution or group and makes plans for any capital stewardship drive. 

·       Refine and approve the site plan and floor plans so that full schematics (the next technical level of floor plans) plans are developed.  This will give the best possible ability to estimate cost before actual bidding. 

·       Interior design begins to influence the picture now.  Because the needs of each church are unique in their worship space or children and youth areas, interior design becomes a special element.  Will the church want a welcome center?  How will nursery and children do check-in in their spaces?  What do we need to help our worship teams in terms of rehearsal space and ministry space?  All kinds of questions come into play.

·       Engineering services like acoustical modeling and A/V/Data routing are added into the picture.  It is important to design not just for today, but look at future needs and capacities.  One key element of good design is to engineer in as many options for growth in the structure and infrastructure as possible.

·       As consensus develops, the new project will be designed down the last detail.  By this time we can provide a picture through renderings and computer modeling that will allow everyone to see what their new building will look like on the site.  They will be able to see how the interiors will look, as well.  Some of our optional services include creating a virtual reality model of the church – a type of fly-by and fly-through of the designed building.  It’s amazing at how a clear picture of the future project can be created.

·       Decide on the best “method of delivery” of construction services for the specific project.  This includes looking at a General Contractor or a Construction Manager.  It also involves looking at what level of participation a church might have in the construction phase.

·       All the construction documents are created and the church moves forward to select a contractor that fits their method of delivery.  It can range from Open competitive bidding, to invited contractor bidding to a negotiated contract – whatever will fit the church’s goals and desires the best.  WL Perry is familiar and has worked with every conceivable form of contracting through the years.  We are able to help a church select a construction company through a thorough interview process.



This phase is exciting as ground breaking is imminent.  At this point WL Perry helps with the final selection of a builder and the bids with sub-contractors.  Input from the selected builder (if not able to be solicited before this) is sought to make sure all of the engineering and building process are as cost effective as possible.  This is the last phase of our Ministry Driven Design process.

·      We will help the church through the complex bidding process.  Construction company bids, sub-contractor bids are all reviewed with the church by WL Perry.  This insures the best possible cost and helps clear up confusion.

·      With a Construction company on board and under full contract, the building process begins.  WL Perry offers complete construction administration services, including reviewing all construction to make sure it meets codes and plan specs, approving all payments and following through on any requests for information.  During this time a good tension exists between builder and architect to maintain the appropriate accountability to the church.  The Architect will stand beside the church in any conflict or disputes to resolve things in the best way possible. 

·      As construction progresses, WL Perry’s team will continue to work with the church to encourage unity and full participation of the congregation.  Keeping unity and vision throughout the project is as much the goal as is an excellent new or expanded facility. Our staff is dedicated to the church experiencing the best possible building program.

After a project is finished, there is the celebration and dedication of a new facility to God.  Then the reason for all the labor is evident.  We will stand by the church through the teething time of getting settled into their new building.  All along the way, there will have been challenges and opportunities.  Only faith, perseverance, skill from a team of professionals and God’s wisdom will bring a church to the finish line successfully.  WL Perry always considers it a privilege and honor to serve the Lord and a church family as they grow.

Getting Started

September 19, 2008

“Let’s start at the very beginning, a very good place to start.”  That refrain from the musical/movie, “The Sound of Music”, gives a great reminder at the initiation of a church building program!  It begs the question, where is the real beginning point.  Too often, when a church is being blessed with growth, it is assumed that the beginning place is to move full speed ahead with building a building.  Actually there are several important steps to consider and questions to ask that need to come first.   After all the goal of any project is to maintain and multiply effective and fruitful ministry to a local congregation and to the sphere of her influence in the surrounding community.

Here are some steps with questions to ask when a church is growing and feels the need to expand facilities.

Always start with PRAYER.  That sounds like a, “duh, we’re a church, after all.”   However, too many times the real essence of prayer is overlooked.  We can start planning and dreaming and then ask God to bless it!  Ever been there and done that?!  I sure have.  Prayer for wisdom and knowledge on how to proceed and prayer for unity and common vision become very important.  Leaders often know what needs to happen, yet that hasn’t filtered down to attenders and members who will participate in a building program.  It is advisable to expand the conversations about building beyond the confines of staff and ministry leaders to a congregational group committed to pray. 

Next, a defined “VISIONING” process should take place.  To define, refine and clarify vision is the key item to having a church commit to a building program.  Vision is a much better initial and long term motivator than need, obligation or even leadership’s enthusiasm.  It has to be caught by all for the best possible results.   Vision is truly the glue that holds things together and gives the energy to move forward.  Some questions to consider would be:

·       What is our Vision?

·       What is our Purpose or mission?

·       How well have we communicated this to those gathered at our church?

·       How ready are we for a building program?   (the church ‘health’ question)

·       What are the demographics of our congregation and the surrounding community/neighborhood/region?

·       What are our God-given goals for ministry now and ministry 5-10-15 years from now?

·       What kinds of ministry/outreach do we desire to initiate in the future to fulfill our vision and mission?

·       What can we afford?

·       What and how, if any, amounts do we want to finance?

Only an intentional and defined process of visioning will give you the parameters to begin a good design process.  During the Visioning process, leaders and members spend time together with 3rd party consultation (like WL Perry) to ask and answer these questions.  This part of the “very beginning” is what lays a solid foundation for unity and strength to start and finish a project.  Also, it gives the data necessary to do good Master Planning utilizing your site and any existing facilities.  

The next step of a design process has many important elements, as well.  At WL Perry we use an effective process called, “Ministry Driven Design”.  This incorporates all the elements from the dream stage to post construction.  Please see our article describing that in detail.