Financial Considerations for When to Build

A popular theory with some in the church is that the church should wait to build until it has raised most, or all of the cash for building. This can be a good strategy if the church is forward thinking enough to begin to accumulate cash well before it needs to build, but may be contra-productive if the church needs to build in the near future.

Some may also purport to claim that it is unscriptural to borrow, often quoting one or two verses out of context to prove their point. The truth is, that while borrowing may be less preferable than paying cash, it is not a sin as long as the church is careful to count the cost and determine a safe debt limit.

By way of example, let's consider a modest building program of $1,000,000. Accepting that construction costs have increased an average of approximately 10% per year, averaged over the past several years, then a $1,000,000 building program will cost about $100,000 more in one year. A $100,000 annual cost increase is about $8,000 per month. If a church had $500,000 and waited a year to build in order to raise all the money, it would have to raise $600,000 by the time construction began.

On the other hand, if the church were to borrow the $500,000 at 7% interest for one year, the total cost of interest would be no more than $35,000. (Actually it would be closer to $18,000 as the church would exhaust its own funds before borrowing, so it would not need to borrow the entire $500,000 until about 6 months into the project.) In the worse case, the church would pay $65,000 LESS by borrowing and building than by saving and paying cash and could save as much as $82,000.

While there are some reasonable warnings with respect to borrowing, it is not unscriptural. It would be, however, unscriptural not to be good stewards of God’s money. The church should not be like the servant in the parable of the talents who buried his master’s money in the ground to be safe. This servant was an unwise steward whom the scriptures refer to as wicked, lazy, and worthless. Like the wise servants, the church needs to make effective use of its money work.

The cost of delaying construction is also valid issue when discussing delays due to a slow decision-making process and/or unnecessary delays in design or construction. Again, every month of delay costs the church $8,000. If the process of design and selecting a builder takes 4 or 5 months longer than necessary, the church has added $40,000 of cost to the building program for no good reason.

In the final analysis, the church should not only count the cost of building the tower, but also count the cost in delaying to build.