During the recession crisis of 2008-2010, firms were described as too big to fail. These were supposedly companies that had such strength and long tentacles that failure just could not be allowed to occur. In the ensuing years, there were many a political argument over whether anyone should be too big to fail.

THERE IS NO CHURCH TOO BIG TO FAIL! Just look at the Crystal Cathedral and the dozens of big First Churches that fill up our cities. Thousand-seat sanctuaries that now hold one hundred are part of all denominations. How does this happen? What disease strikes that cripples and then kills these one-time giants of the faith? The number one cause is poor leadership in finances. When the money going out exceeds the money coming in, something has to go. Often times it is the whole church.

Unlike a company or even a family, however, a church is made up of volunteers. There is no one to really sue for damages. You cannot make a church pay up. The volunteers who make up the church, in most cases, just leave and only a building is left behind. How can we safeguard against this happening in our church?

Be Afraid of Debt

Debt is the number one killer of churches by far. I have seen numerous bad preachers, but most every time the church can replace that person and move forward again. I have worked with some laypersons that followed the devil far more than Christ, and again, most every time a church can move them aside and move forward. But I have seen way too many very good churches with good pastors and good laypersons have to close their doors because on one night with one vote they doomed their church to failure by taking on an unmanageable debt.

I often describe debt as a chainsaw. A chainsaw is a wonderful tool that can make cutting down a tree or cutting up firewood a breeze. You can fall in love with its power and speed to get something done. However, one wrong move and a chainsaw can kill you! Debt has a real allure to it. It is possible to go to the bank and in a short period get millions moved into your account. You can quickly use those millions to build big buildings and fill them with fancy things. So pretty…so fast…so quick! But after a while you discover that the bank wants all of its money back — with interest — and there are no do-overs. You MUST pay it. If you borrowed too much, for too long, you may soon find out that you cannot meet the terms and you will die. The debt killed you.

This death is not quick. It is slow. You usually do not see it coming until it is way too late. You start out by just bugging people to give more. Next you cut the budget and cancel some programs. Then you let some staff go. At each move, a few more people leave until you have no one left — just the debt. The church dies!

Before going into debt:

1. Be certain that you have done a professional cash flow analysis with your Conference Foundation or Horizons Stewardship or another church-knowledgeable group. See what they project is reasonable that will not hurt mission or ministry. Taking a bank’s calculations on what a church can pay back is generally a bad idea. They do no usually understand your mission.
2. Have a set plan from Day One to reduce principle every month. Paying interest only is a terrible idea, even for a short period. Make sure your principle is fully paid in ten years or less.
3. Make interest payments through the operating budget so that capital campaigns can go 100% to principle.
4. Do not borrow more than two times whatever you raise in your initial capital campaign. Do not borrow off your need or on your budget. Borrow on what you know you have the ability to raise.
5. When you are determining your project cost, build in two years of operating expense with additional staff, equipment, and utilities. These are hidden costs that often sneak up on a church one to two years later and start to cripple ministry.
6. Never assume that if you build it, they will come. Assume that no one else comes and you have to repay the note just with the persons you presently have. All additional persons are just good fortune.

Remember that debt is like a chainsaw. It is not to be avoided. It is to be used as a ministry tool, but with extreme caution and respect. It can make you stronger but it can also kill what was strong!

For more from J. Clif Christopher, preorder his latest book God vs. Money: Winning Strategies in the Combat Zone, available August 2018 from Abingdon Press.