By Don Anderson
Thank you for even starting to read an article about an important topic that is seldom considered exciting. I am certain I could find church leaders who would argue that an indebted church cannot be considered “healthy.” And others would argue that debt has little to do with a church’s overall health. I think the truth lies somewhere between these two extremes.
Debt and commercial lending have been common in every society throughout history, but no biblical instruction on business or church debt exists. Most of the biblical treatment of debt is covered as part of the civil law of ancient Israel. Specific biblical instruction, for the most part, is in the context of charitable or benevolent lending to relieve financial distress.
Many of these references present debt in a negative light (e.g., Deuteronomy 15:6; 28:12; Proverbs 17:18). Jesus spoke about debt to teach about mercy (Matthew 18:23-35; Luke 6:34-36; 16:1-8), provide a picture of our debt (Matthew 6:12, 15), and address the obligation to pay back what is owed (Matthew 5:25, 26; Philemon 18, 19).
During my lifetime, there has been an extreme attitude change toward debt that has contributed to the nation’s credit epidemic. Forty years ago, most Americans felt some shame in carrying debt, but today it is completely acceptable, even expected. It has also become far too easy for people to borrow money. (I have a friend who received preapproved credit card applications for his dogs.)
The majority of Christians and churches also accept debt as an everyday part of life. The focus most often is on the affordability of the monthly payments rather than the total interest that must be paid over the life of the loan. This unhealthy attitude about debt has permeated many churches. Many church leaders still buy into the myth, “If you build it, they will come!”
Church borrowing can be a very emotional and controversial topic. Church debt is largely about attitude, timing, amounts, and terms rather than an absolute yes or no. However, almost anything taken to excess is destructive, and that is certainly true of debt. Strong arguments from Scripture and numerous real-life examples indicate long-term church debt is bad. Yet, the vast majority of churches finance their construction projects with highly leveraged, long-term loans.
Churches wouldn’t need to take out loans if every church family tithed and if church leadership managed finances well. However, it’s more likely a church will need to borrow money than for every family in a church to tithe. The following simple principles are helpful for modeling good stewardship while managing church debt well.
1. Be Faithful.
Trust in God’s sovereignty and his provision. Have faith like Paul’s, “And my God will meet all your needs according to the riches of his glory in Christ Jesus” (Philippians 4:19).
2. Model Stewardship.
We challenge people to trust God and test him by taking the step of faith in tithing (see Malachi 3:10). Likewise, church leaders should model this same faith with church finances. Teach about faith and money matters. Do an annual stewardship series to teach that tithing is a faith issue, not a financial issue. Conduct a study based on Barry Cameron’s The ABC’s of Financial Freedoms. Also, provide Dave Ramsey’s Financial Peace University or similar classes regularly to equip your church family.
3. Seek God’s Wisdom.
Through study, prayer, and godly counsel, seek God’s wisdom prior to making a decision to take on debt. Remember, “By wisdom a house is built, and through understanding it is established” (Proverbs 24:3). Consider borrowing only after exhausting all other options, and only when church leadership is united with a clear sense of God’s direction. As Scripture says, “Do not merely listen to the word, and so deceive yourselves. Do what it says” (James 1:22).
4. Maximize Resource Use.
Maximize the use of all existing and available facilities. Be diligent and creative as you consider solutions for your facility needs. Avoid comparisons with other local churches. Heed Jesus’ warning, “Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in an abundance of possessions” (Luke 12:15).
5. Focus on Balance.
Excessive debt creates severe challenges to being a healthy church. Make sure the church budget accurately reflects the expected annual giving income. There are many perspectives on this topic, but I like for total facility operating costs, including mortgage expenses, to account for well below 30 percent of the total budget. Keep the total church staff and benefits expenses between 40 and 55 percent of the total general fund budget, so that the church is not understaffed or overstaffed. The remaining 30 percent or greater is then available for ministry and missions’ expenses, including maintaining cash reserves.
6. Maintain an Eternal Perspective.
Do not take on debt unless it is deemed absolutely necessary to reach and disciple more unchurched people. Live by Jesus’ teaching and store up for your church treasures in Heaven (Matthew 6:19-21). Remember 2 Peter 2:19 and be a slave to Christ, not debt. Learn “the secret of being content in any and every situation” (Philippians 4:12).
Making a plan guided by these simple principles will help a healthy church manage debt well. This includes my church. The majority of our church debt financed the relocation and construction of a new campus. God blessed the decision to expand our campus. We continue to be a healthy church, now even more committed to eliminating our remaining debt within the next seven years.
Don Anderson serves as executive pastor with Chandler (Arizona) Christian Church and is chairman of three nonprofits.