Building The Church Together

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Building The Church Together

• Stewardship Kaleidoscope
• Fort Worth, Texas
• March 11, 2008

Jay Hudson Presbyterian Investment and Loan
Program
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Workshop Description

• The workshop is for anyone planning to
  construct a new church facility or ready to
  remodel and older church for mission and
  ministry. We will explore the importance of
  understanding your ministry as a foundation for
  location , style, design, cost and financing.

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Reason For Being

• Too frequently the quest for a new facilities
  becomes an end in itself.
• The real purpose of growing a vibrant community
  of Christians can get lost.

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Starting Point Understanding your Ministry

• Congregational Ministry is about evangelism,
  stewardship and growth of congregations that
  worship, serve, teach and provide pastoral care.
• Buildings reflect cultural, political and
  religious context of the particular community of
  faith.

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Ministry Plan

• What is the purpose of our ministry
• What have we accomplished?
• What is different today from when the purpose was
  first formed?
• How do we see this ministry in 3 to 5 years?

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The Millennial Matrix Rex
Miller

• Oral 4000 BC - 1500 AD
• Print 1500 AD 1950 AD
• Broadcast 1950 2000
• Interactive 2000 - Present

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Comparing the Media
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Madonna Art Through the Ages
Digital Performance Art
Print Real detail
Oral Experience Of the Holy
Broadcast Deconstruct reconstruct
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Church Architecture
PrintForm/Function
Digital Context
Broadcast Platform
OralMetaphor
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Medium as Message

• The dominant medium becomes our cultural
  metaphor Neil Postman in Amusing Ourselves to
  Death

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Characteristics of Digital Media

• Interconnection
• Complexity
• Acceleration
• Intangibility

• Convergence
• Immediacy
• Unpredictability

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Media and Worldview

• Media
• Print
• Broadcast
• Digital

• Worldview
• Modern
• Post-Modern
• Emerging

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Ray Oldenburg The Great Good Place

• What happens in our homes and work places is
  shifting and many are seeking a third place to
  tell their stories and make meaningful connections

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Third Places

• Informal gathering places
• Nourish relationships
• Serendipity
• Relax and unwind
• Encourage sociability

• Free or inexpensive
• Food and drink available
• Expect to see old and new friends
• Comfortable walking distance

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2010Third Places 35-30-35

• Starbucks It is a place our customers come
  for refuge
• Nancy Orsolini, District Manager
• North Americans are increasingly attracted
  to median spaces (Barnes and Noble) when they
  want to develop relationships and find emotional
  and spiritual connections.
• Sally Morganthaler

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Krispy Kreme Make the process the attraction
You watch it, you smell it, you try it, you buy
it and you love it!
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Harley Davidson Rebel Lifestyle
What we sell is the ability of a 43-year-old
accountant to dress in black leather, ride
through a small town and have people afraid of
him. Harley Executive
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So what is the Church Offering?

• A product?
• A Process?
• A relationship?
• A Promise?
• An Experience?
• An Outcome?

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God is in the Blueprints

• All church buildings tell stories about the
  people who build them and their understanding of
  God and how God meets the community of faith

• Emphasis on entering
• Democracy
• Informality
• Natural Light
• Electronic Sound
• Semicircular seating

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Plan A Better BuildingThomas Dolan

• Traditional Church architecture symbolizes the
  church in the world, but not of it.
• Contemporary design reaches out to embrace the
  community

• Modern vs. Traditional
• Mixed-Use Development
• Warm Welcome
• Activity-oriented Design
• Technology

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Site Selection

• For new churches this is often done by the
  presbytery
• When existing congregations move they should seek
  one acre for every 100-150 people
• The old guideline for suburban sites was three to
  five acres of usable land on a main thoroughfare
  at a cross street
• Urban and rural settings are different

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Site Selection

• Verify that all utilities are available
• Check zoning restrictions
• Parking and sports fields require the most
  property
• City required parking ratios vary from 13 and
  15
• Rectangles are easiest and most efficient
• Neighbors

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Site Purchase Resources

• Gifts
• Presbytery resources
• Congregational resources
• Capital campaign
• General Assembly Loan Up to 400,000 with 20
  year amortization, 4 interest only for the first
  5 years, 6 interest for the next 15 years and no
  prepayment penalty. Obligation can shift from
  presbytery to congregation.
• Other debt financing

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Crosswinds Presbyterian Church, Phoenix, AZ
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Crosswinds Presbyterian Church, Phoenix, AZ
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Moorpark Presbyterian Church,Moorpark, CA
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Moorpark Presbyterian Church,Moorpark, CA
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What can we afford?

• Savings
• Capital Campaign
• Operating Budget
• Preliminary Look

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Finding financing

• Guideline 2.5 to 3 times the annual budget
• General Assembly Loans
• Synod Loans
• Bank Loans
• Terms Interest- Adjustment - Guarantees

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General Assembly Loan Terms

• 20 year amortization
• 5.25 first 450,000
• 6.25 from 451,000 up
• 4.25 for New Church Developments
• One-year adjustable over 1 million, Two-year
  adjustable under 1 million

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Supporting Church Growth Through Presbyterian
Investors

• What is the Presbyterian Investment Loan
  Program?
• A nonprofit corporation of the Presbyterian
  Church (U.S.A.).
• Created to support the growth of mission and
  ministry of Presbyterian congregations and
  related entities through low-cost mortgages.

Our mortgages are made possible by Presbyterian
investors.
Term Notes
Loan Funds
Loan Repayments
Interest
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Connecting Presbyterian investors with the growth
of Presbyterian churches!

• Who are our investors?
• Individual members and clergy of Presbyterian
  churches
• Presbyterian congregations
• Presbyteries, Synods and General Assembly
  agencies
• Other related entities of the Presbyterian Church
  (U.S.A.)

• How do you invest?
• Individuals and congregations purchase
  interest-bearing Term Notes.
• Governing bodies and entities purchase Depository
  Account Receipts.
• Investment terms range from six months up to five
  years. At the end of the term chosen, investors
  may reinvest for another term or withdraw the
  funds. Minimum investment is only 500.00.
• Individuals may also invest through their IRA
  accounts.

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HOW INCREASING INVESTMENTS HELPS THE CHURCH
100
Earns A Full 1 Point Rebate
75
Earns A ¾ Point Rebate
50
Earns A ½ Point Rebate
35
Earns A ¼ Point Rebate
20
Required To Get Base Loan Rate
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Current Capital Projects
How common are loans among Presbyterian churches?
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Typical Capital Projects
How much do churches typically borrow?
8
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Current Plans for Capital Projects
Are other Presbyterian churches
expanding/renovating?
8
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Case Study

• Total Project Cost 1,650,000
• Annual Budget 350,000
• Giving units 172
• Capital Campaign 460,722 over 3 years
• 92 Payout 423,910
• 150,000 of first year pledges put into project
• Loan Sought 1,650,000

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How does our project compare with lending norms?
9,593
7,500
DEBT PER GIVING UNIT
CASH FLOW COVERAGE
DEBT AS OF TOT. REVENUE
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25
125
98.5
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How does our project compare with lending norms?
9,593
1,200,000 Loan
7,500
6,976
DEBT PER GIVING UNIT
DEBT AS OF TOT. REVENUE
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CASH FLOW COVERAGE
25
29
135
125
98
Norm
Norm
Norm
Level B
Level B
Level B
Level A
Level A
Level A
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Loan Terms FAQs
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Hiring professional fund raisers

• Do they understand your ministry? Are they
  intrigued by it?
• Beware if they do not think your particular
  situation makes a difference
• Preliminary Look

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Specific questions for professional fund raisers

• Who will be working directly with you?
• Who were this persons last three clients?
• Interview them
• What were their goals and what was the result?
• What would they do differently?

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Typical Capital Projects
What does the typical capital campaign generate?
Disproportionately more comes in the first year.
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Critical Choice

• Design Bid- Build In this model you hire an
  architect to do preliminary drawings, interaction
  with many groups and individuals, make changes,
  hire an engineer, complete final drawings,
  Solicit bids from contractors, chose a
  contractor, confirm financing, make selection,
  and begin building
• Design- Build In this model you select an
  architect and a builder who become part of a team
  that works with the local committee, who controls
  budget.

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Selecting an architect

• Interview other church clients
• Projected costs, bids, final costs
• Has the firm won awards?
• Expertise in local codes?Expertise with multiple
  member client?

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Building Options

• Master plan with phases and timeline
• Multi-purpose facility
• Worship space

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Building The Church Together

• Stewardship Kaleidoscope
• Fort Worth, Texas
• March 11, 2008

Jay Hudson Presbyterian Investment and Loan
Program