131. The Impact of Debt Upon the Ability of Church Boards to Lead.

The church at which I serve as a board member and chair recently celebrated the first anniversary of ministry in a new multi-storey campus. Our congregation is fifteen years old and the building project took about ten years from conception to completion! This is “phase one.” Now we have the privilege of repaying borrowed funds, a project which should take about five years, Lord willing.

The word “debt”  stirs different kinds of emotions. Some consider any debt to be sinful. Others regard it as a means to glorious ends. Most perceive debt as a necessary tool in the growth and development of congregations and the facilities they require generally to advance their mission and vision. Our board planned carefully, developed detailed financial projections, and prepared various growth models. So far everything has worked better than we anticipated — praise God.

But the reality of several millions of dollars of debt which a congregation has assumed, upon recommendation of a church board, in order to build a facility, does bring specific responsibilities to a church board which otherwise would not be felt. These would include:

1. Leading with care lest untoward action by the church board cause division in the congregation and create financial crisis through loss of members.

2. Striving to maintain ministry momentum, adequately resourced, while repaying significant debt.

3. Exercising great caution in adding to the financial burdens of the congregation by multiplying staff and pursuing new ministries.

4. Developing contingency funds and asset replacement funds and adequately insuring the facilities so that as the facilities experience wear and tear, or unexpected disaster happens, or mechanical elements breakdown, funds are available for repairs and maintenance.

5. Reminding the congregation that it is irresponsible for them to receive benefits for which they expect the next generation of believers to pay.

6. Sustaining stable leadership (pastoral and other) for four to five years while the debt is being paid down and serviced.

In other words I think a church board has to work harder and more diligently when a congregation has assumed large debt to ensure that the faith community remains strong, united, and well led. It is natural for a church board, once a facility is developed and occupied, to breathe a huge sigh of relief and think that they can coast for a while. The heavy lifting is over! Let’s celebrate and enjoy! Of course, there needs to be time to appreciate the blessings of God. However, in some respects the heavy lifting has just begin. Keeping the discipline of giving to pay-off debt will be a challenge. Fresh opportunities will entice the pastoral leadership and the board to spend scarce resources on new ministry agendas, while forgetting or not giving due diligence to financial obligations already owed.

A chairperson of a church board in this situation carries special responsibilities. Most importantly, I suggest, is enabling the board to maintain its own spiritual discipline of careful, prudent decision-making that will advance the mission and demonstrate responsible spiritual leadership. Improperly managed debt can become the most serious threat to the congregation’s mission. The composition of boards changes. Members who served through the building process will want some rest and relief and will complete their terms. New members will be added who have not worked through the tough decisions related to the building project and the accumulation of resources to complete the project. The debt will not be on their radar in most instances. So good orientation to this obligation and its influence on board leadership will be important.

A second responsibility, perhaps equally important, is to maintain the confidence of the congregation in the leadership of the board. During periods of debt repayment the congregation needs to keep faith with its vision and also its obligations. Good communications, careful financial management, prudent decision-making, intentional listening to congregational concerns will all serve to deepen this critical bond of trust. Your own leadership as chair probably needs to continue with consistency for several years.

A third area, more controversial, deals with the establishment of contingency funds and asset replacement funds. Every business person understands the importance of building contingency into budgets and setting aside funds for asset replacement. If this is not done, then the entire enterprise operates under the cloud of potential financial ruin. Yet, it is my experience that church boards resist such planning and in some cases the resistance is cloaked in the accusations that we lack faith. God will provide. I acknowledge a tension between faith, presumption and responsible planning. However, the reality of the tension does not absolve board members from responsible action and planning, even as they do so with faith in God’s provisions. A chairperson serves the board. That service requires truth-telling and calling the board members to responsible leadership in the congregation. If your board is not preparing for financial emergency by establishing a contingency fund that will carry operations for two or three months, your board is not providing good oversight. It is not a question of if financial emergencies will arise, but when. In such contexts the board will need some time to discern the best way forward without making bad decisions under extreme pressure. Those funds can provide that window of time for careful discernment.

Similarly, as tough as it may be to convince the congregation, asset replacement is appropriate stewardship of the resources God has provided. Every homeowner knows that. If this is not taken care of in some way, then the current congregation is borrowing from the next generation to enjoy the facilities today. Is that an appropriate expression of “koinonia”? Of course, insuring the facility is a given.

In these matters the chairperson has to be “the flea in the dog’s ear” with respect to the board. If the board members are not attending to these responsibilities, for whatever reason, you, as the chairperson, need to prod, poke, cajole, counsel, and insist that they take appropriate leadership. The congregation will bless you, and so will the next generation. Eventually the board members will discern the wisdom of these actions too.

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