An epidemic of biblical proportions is significantly impacting churches of today. Currently sweeping across the landscape of Christianity, this epidemic disables and ruins countless churches every year. This deadly disease is debt. The debt epidemic begins innocently enough. It typically begins with someone from the building or finance team passionately misquoting the famous line from Field of Dreams, saying “Build it and they will come.” Soon people begin to nod in agreement. The debt epidemic has begun.

The debt epidemic gains momentum when the architect says, “Tell me everything you want in your building and don’t worry about the cost.” Recently, I visited a church in the midwest. In the beginning stages of this disease, the church’s annual budget is less than $300,000. After meeting with the architect, the plans for the new building were presented — a $3 million project. The drawings were beautiful and very enticing. One church member even exclaimed, “There is even a fireplace in the gathering space!” Other early symptoms of the debt epidemic include phrases like, “I’m sure the people in our community will want to help pay for it” or “All of the new people that we attract will pay for it.”

“Build it and they will come” has become, “Build it and they will pay for it.”

The next phase of the debt disease usually includes the church hiring a firm such as Horizons to help them raise the money to build their Field of Dreams. Often what they really want is a plan to inspire others to pay for their building. During this phase, the church either becomes deathly ill or finds the right prescription to avoid succumbing to death by debt.

How does a church avoid succumbing to the debt epidemic?

Here are some ways to avoid the debt epidemic in your church. 

1. Preventive medicine is always the best. Hire someone like Horizons before you hire the architect. We can help set parameters that will prevent your architect from proposing a project that could result in extraordinary debt. This first step can prevent the disease from taking hold and save your church from contracting the debt disease.

2. Always insist on a pre-campaign feasibility study. A quality study will include a projection of the dollars your church will likely raise from a capital campaign. Although a quality study will provide the data you need to prevent deadly debt, the results can often be a bitter pill to swallow. Churches typically spend thousands of dollars on building plans and church leaders are excited to see it become a reality. However, as your partners in ministry, Horizons’ strategists will honestly tell you if the current plan is beyond your congregation’s capacity to fund it. While potentially painful, knowing (rather than guessing) your congregation’s willingness and ability to fund your project is a necessary step for preventing deadly debt.

3. Test your plan with key financial leaders before going public. A capital campaign will invite everyone to participate in making your church’s vision a reality, but a few key financial leaders will contribute the majority of funds. (Here’s how to identify and grow a few key financial leaders.) Inviting high-capacity donors to weigh in before unveiling your project to the congregation may illicit substantial support. For example, a church had fallen in love with a project that cost eight times their budget. Initially it seemed they might take on a deadly amount of debt in order to fund it. After showing the project to key financial leaders, one couple became was so excited they decided to give nearly 40% of the project. Death by debt avoided.

How much debt is healthy and how much is deadly? 

1. The most effective strategy is to conduct no more than two capital campaigns in a row for any one project. Many pastors, donors, and volunteers experience campaign fatigue following two three-year capital campaigns. In addition often these same church members are involved in the building project, leading to a strain on volunteer resources. I’ve worked with churches that have had to conduct six and seven campaigns in succession to eliminate their deadly debt. Not only did it exhaust church leaders, but it also prohibited any growth in mission and ministry until the debt was paid.

2. The pre-campaign feasibility study is an essential tool in right-sizing your project and avoiding deadly debt. For most churches, it is unwise to take on a project that exceeds two times your feasibility study projection. Of course, this is simply a rule of thumb and may not apply to every situation. Things like high-capacity donors, investment income from endowments, and other factors may play a significant role in determining your church’s ability to fund your project. Also consider whether you have resources misaligned to your mission.

3. Debt service should not exceed 10 to 15 percent of your annual operating income. Most churches that carry debt service exceeding 15 percent of annual income are unable to begin new programs, hire staff, or expand ministry. Death by debt becomes a real possibility.

Succumbing to death by debt is not inevitable. There is a cure. 

Incurring a healthy level of debt within the guidelines I’ve shared may be an important strategy for achieving the vision God has for your church. Field of Dreams may be a great movie, but it does not include sound advice for your building or renovation project.

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This post first appeared at Horizons Stewardship.