Whether you dumped a bucket of ice water on yourself, watched as your friends did the same or wrote a check to support medical research, it was nearly impossible for anyone with an Internet connection to miss the Ice Bucket Challenge this summer. But as the season draws to a close, the viral fundraising sensation appears to be waning, which leaves us with an important question: Now what? [Read more…]
This week in Questions and Answers, we’re tackling a question from Tony, a man in Texas is who feels called to start a homeless center in Alaska and is looking for a way to fund the work. We’ve included an abbreviated version of Tony’s question below; you can see the full text here.
What we would like to do is buy an RV and drive up to Alaska and use it as a home at first until we figure out the best place to set up the center. At that point we will get a house and then we would like to use the RV as a tool. We were looking at putting an internet dish on it and turning it in to a online school where homeless could come and take classes for free.
The problem is we have not had a credit card or a loan in a long time, so getting a loan might be hard I have thought about having my parents cosign but not sure I want to drag them in to this. My current job will be going with me so that is how we plan on paying for the RV. I figure it is no different than getting a loan for a house or car. Instead of paying $1,200 in rent, a $600 RV payment and $600 to park the RV, plus electric and water, sounded like a good trade off to me. My house electric runs me around $350 a month, so living in the RV will be cheaper. We are well aware of the cold and we have been told what to do to weather proof the RV.
To raise the money we have sold 90% of our possessions and we have done an online fundraiser We have asked all our friends, relatives, the church we attend and other churches, and we have not even come close to the money we need. A lot of doors had opened up, so we were really thinking God was blessing it. But now we have been sitting in a house with no furniture well we have a kitchen table and a desk left. And everything is in boxes. I’m not sure if I am supposed to wait on God or he is waiting on me to take a leap of faith to bless the whole thing.
— Tony, Texas
Thanks for your question, Tony. I’m sorry that it’s taken me a while to respond to you — I’ve been on an extended break since the birth of my daughter several months ago. I hope I’m not too late to talk you out of this, though, because what you’re talking about doing is a very bad idea.
I don’t mean, of course, that the homeless center in Alaska is a bad idea — I’ve spent a fair amount of time in Alaska, and I’m familiar with the struggles of the native people there. Your goal is admirable, and I don’t doubt that God is calling you to help up there. But I do doubt that He wants you to use debt and bad purchases to do it.
There are several areas that give me concern here, Tony. First is the idea of borrowing money; second is the idea of using that money to purchase an RV; and third is the trouble that you’re having raising funds.
Debt burdens ministries
First of all, I want to tell you that debt is always a bad thing — it’s a form of financial slavery that can have sever consequences that last the rest of your life. And while it can be tempting to turn to debt when you want to do something that is really good for society or the Kingdom of God, it’s never a good idea. There’s no such thing as good debt, and borrowing money can be a crushing mistake for a ministry.
I have personally watched as ministries that I cared about deeply and contributed to for years closed their doors because of bad financial decisions — borrowing money to do big things quickly instead of going slow and steady. That’s an incredibly painful process, and it hurts both the ministers and the people they’re trying to reach. I don’t want to see the same thing happen to you.
Vehicles always depreciate
Now, onto the issue of the RV: You make an interesting case for spending money on an RV payment instead of on rent. Your math might be right — on a month-by-month basis, the average cost of RV payments (plus parking and utilities) might equal out with the cost of rent. But here’s what you’re forgetting: An RV is essentially a vehicle, and all vehicles depreciate in value.
In other words, you’ll be borrowing money and making payments on something that is dropping to a value of zero.
Why is this a problem? Because eventually, you’ll reach a point where the RV is worn out (and that’s likely to happen more quickly in Alaska than in the lower 48, given the extreme conditions up there). It’s not at all unlikely that the vehicle could depreciate faster than you could pay the loan off. In other words, you could end up upside-down in the deal, owing more on the loan than the vehicle is worth.
That’s not a situation you want to be in — if a weather event, traffic accident or other misfortune causes significant damage to the RV, you may find yourself without a vehicle, without any money to replace it, and still having to pay off the balance of your loan. That could quickly torpedo your ministry.
God pays for what He orders
My final thought for you, Tony, is that the difficulty that you’ve had in raising money should tell you something about the feasibility of what you’re trying to do. I firmly believe that God pays for what He orders. And that leads me to believe that if you haven’t been able to raise the money that you need for this project, this may not be the right time or the right plan for your ministry.
I’m not trying to take anything away from your ministry or your calling. But I have to doubt that God would call you to a full-time ministry in Alaska without providing the funds to undertake it. This isn’t about a lack of faith — it’s about wisdom. It’s not wise for your family or your ministry to borrow a bunch of money to undertake a project that isn’t well funded.
Instead of going forward this way, consider finding alternative routes to getting your ministry going. Can you rent a home in Alaska and use that as the base of your ministry, rather that borrowing money to buy an RV? Or could you partner with a local church that would allow you to use their facilities?
You may even need to start smaller than that. Perhaps you need to take short-term trips up there a few times a year to establish relationships and begin to build strategically in the community. This would allow you to put down a foundation for a long-lasting ministry without endangering your family’s finances.
Whatever you do, I wish you the very best. I hope that you’ll follow God where’s He’s leading you, when He’s leading you there, and not go rushing into things prematurely.
God bless you!
Photo by US Department of Agriculture. Used under Creative Commons License.
Does God want us to work really hard and achieve excellence in our workplace? Or does He want us to work and wait upon His blessings or timing for everything? I am at a crossroad between working really hard or simply working average and waiting for His blessing to just pour out. I’ve been hearing so much about “waiting upon the Lord” but where does my own effort come in place? And how much of it should I exert and how much should just be on faith/waiting?
— Jerald, Toronto
Jerald, thanks for sending your question from Toronto — I love Canada, and it’s great to have readers there. You’ve asked a great question, and I’m glad you did, because it opens the door to a really important discussion that needs to happen more often in the Christian community.
I’m going to give you a short version of the answer first, then follow it up with scriptural references and explanations to give you more detail. [Read more…]
Sometimes the things that you do say more about who you really are than you’d like for them to.
Unless you’re a sociopath, you probably like to think of yourself as a good person who generally treats people well and contributes to society in positive ways. This point of view can be great if it’s true. But what if it’s not as true as you’d like it to be?
Truth is that we all struggle with selfishness: It’s the foundational sin that causes all sorts of problems in our lives. In our society, though, and especially in Christian circles, it can be easy to hide our selfishness behind polished exteriors. But it often still remains, and one of the best ways to identify it is to take a look at the ways that you think about and behave with your money. [Read more…]
A new car, a fancy TV, a college education: People are often enamored with the things that they expect to get when they borrow money. But hidden behind all the attractive gains are a whole lot of losses.
In almost every situation, borrowing money to get stuff is a bum deal. Yes, borrowing money helps you to purchase something before you’ve saved the money to buy it outright. But getting that stuff comes at a high price — when you borrow money, you give up a lot of things. In the end, you lose more than you get.
Debt causes us to lose things that are both tangible and intangible. Here are five of the most important things you lose when you borrow money:
When you go to a high-profile concert, you’re in for quite a show. The band is flawless; the lead singer commands the stage with swagger and charisma; the backup dancers are in perfect step; and the sound and lights coordinate seamlessly with the performers to create an overwhelming experience.
It seems exhilarating and effortless, but the truth is that each two-hour live show that you enjoy is the culmination of months of intense rehearsal (not to mention years of prior training). Every musical note, dance step, lighting cue and introduction has been carefully planned, down to the tiniest detail. You have a great experience because the show’s producers intended you to.
Nothing really great ever happens by accident — it’s always the result of planning, strategy, hard work and a big-picture vision. We call this “doing things intentionally,” and it can make a huge difference in the effectiveness of your life’s endeavors. It certainly makes a huge difference with your money.
Is it ever appropriate for a church to obtain a mortgage for a property purchase? I attend a small church that is bursting at the seams but the fear of financing keeps us here.
We are renting our current building for $1,000/month with all utilities extra. We have no debts and maintain an account with $5,000.00 for regular operations. We have recently become aware of a large church building for sale at an exceptional price: $350,000. In just over 2 years we have saved $100,000.
Is it prudent to finance the balance if we negotiated the price to where we could pay a third of the price in cash? You can imagine the pressure on my church to make a wise Biblical decision for the next step.
— John, Ontario
Thanks for the question, John — it’s great to have readers in Canada. You and your church are in a position that many churches have found themselves in over the years, and it’s great that you are trying to be wise in making this decision.
I’m afraid that you’re not going to like my answer too much: I believe that debt is slavery, and that all ministry organizations need to stay away from it. And some time ago, I wrote an article addressing this exact question: Should churches use mortgages? My conclusion in that article was that they should not, and my opinion remains the same. Still, I’m happy to walk through the particulars of your church’s situation to help shed some light on your options.
I’ve seen a number of churches get in trouble with mortgages in the past: Even though it seems like getting a building of your own is a great move for your church, the financial pressure that debt puts on your congregation can bring your momentum to a halt. I’ve seen more than one church dissolve completely over bad debt decisions like this, and I want to spare your growing church from experiencing this same turmoil.
Starting in a good position
Before we talk about these details, though, let’s discuss some of the good news about your current situation. Your church is in great financial shape — with no debt and a $5,000 operating fund you have total financial freedom, as well as some cushion in case you encounter some difficulty. (If you wanted to be really secure, you should consider increasing your reserves from $5,000 to around six months’ worth of operating expenses, but that’s a suggestion for another post).
The rent on your current place is actually very reasonable — perhaps even cheap — and even though you seem to be full, it’s a good situation. If you were in a higher-rent facility, you would have had trouble saving the $100,000 that you currently have to work with.
Finally, your church seems to be growing, and this is a great problem to have. It may make your weekly services a little cramped, but it’s great news for the Kingdom of God making an impact in Ontario. It’s also a good news for your revenue, as growing membership should result in growing tithes and offerings.
Churches vs. Homes
If you were an individual looking to buy a home, or perhaps even a business owner looking to buy an office or operating facility, financing 67% of the purchase would seem like a good deal. We encourage individuals to wisely use mortgages to buy homes and build wealth, because there are some key factors that make home mortgages much less risky than other consumer debt. But there are also some key differences between homes and churches that make this a problem for your congregation.
The residential real estate market is relatively stable and predictable because home values tend to appreciate over time, and because there is frequent enough turnover that it’s easy to appraise a property by looking at how comparable buildings have sold recently. But churches change hands much less frequently than homes or commercial buildings, which makes them incredibly difficult to appraise. That also makes it difficult to sell your church if you need to quickly liquidate your assets. And even if you did sell, you would have no guarantee of getting all of your money back from the sale.
One reason that we encourage home buyers to get mortgages to buy homes is that home values often rise in predictable ways, and owning a home is a key wealth building tool. But a church isn’t — or at least shouldn’t be — interested in building wealth. For a congregation, purchasing a church building is a “buy and hold” proposition. You don’t plan to sell the building in 15 years at a profit. You plan on being there forever. So the incentive that individuals have to buy homes quickly (in order to maximize appreciation) doesn’t really apply to you in this situation.
Debt is slavery
The bigger problem is that debt is financial slavery, and the Bible specifically warns us against it. If you take out a mortgage — even just $200,000 — your congregation will be obligated to make the monthly payments against that loan, no matter what is going on. If your giving income goes down, your growth momentum stalls or you have some other financial emergency, that mortgage payment can become a noose around your neck, severely limiting the church’s options to make necessary financial decisions. If the problems get too bad, they can even force you “out of business.”
A church building should be a blessing for its congregation. But when debt is involved, buying that building can quickly turn into a curse.
Don’t get me wrong: I want your church to buy a building. But I want you to buy it with cash, not financing. The fact that you have saved $100,000 is a great start. I think you should continue saving — and even ramping up your fundraising efforts — in order to amass the $300,000 to $400,000 that you need to buy a building outright. If you focus your efforts to do this, you might be able to raise the money in just a few more years.
There are some other creative options that might help you get around your problems. If you’re truly running out of room in your current space, you could consider running two or more services to accommodate everyone (many large churches have been doing this for years). You could also find an intermediate space — a bigger place that you can rent for a reasonable monthly amount while you continue to save for your own building.
There may also be a creative way to get into this new building now, depending on how flexible the sellers are. You could ask if they would be willing to lease it to you instead of selling it. If they are, they may consider a “lease to own” agreement, by which you slowly buy them out of the building over the course of several years. You could also set up a lease with an option to buy — in this scenario, you could have a regular lease, with the understanding that the congregation has the option to buy the facility outright at a predetermined price several years from now, when you could theoretically have saved enough money to finance the entire purchase with cash.
If one of these options works, then great. If it doesn’t, don’t despair. God knows your needs, and He will provide for them in a way that is consistent with His principles. Don’t let yourself believe that this is the only building that will work for you, or that borrowing money is the only way to get it. We serve a God with abundant resources, and He will bring you His best in His time if you are faithful to trust him.
Photo by Taber Andrew Bain. Used under Creative Commons License.
Somewhere in the back of your mind or the pit of your stomach is a gnawing fear: What if someday everything falls apart? What if you run out of money? What if you can’t feed your family? What if you go broke?
For some people, this is a very clear and imminent fear — if you live paycheck to paycheck, you’re always one small emergency away from financial ruin. But having a little bit of money doesn’t make this fear go away. It only makes it seem a little bit more distant. No matter how much money you accumulate, you can’t escape that little voice inside your head that says “this might all go wrong.”
There are two ways that we can react to this fear: One is to hold on to as much money as we can, hoping that a big pile of cash will act as a buffer between us and a disastrous end. The other reaction — and the better reaction — is to give your money away freely.
Within a month, I’ll be giving up my cable television service… and I’m preparing myself for the fact that it might hurt. But I’d rather be a free man learning to deal with the pangs of boredom than to be an entertained man who is a slave to luxury.
Money and its trappings can make slaves of us in so many ways. Oftentimes, this happens without us being aware of it. We can become slaves to greed, slaves to poverty, slaves to debt and even slaves to other people’s expectations regarding our lifestyles.
Sometimes, the things that are enslaving us seem perfectly normal in our culture. But it’s time to stop hiding behind our middle-class idealism and face the truth about what we’re doing with our money: A lifestyle of small indulgences can make you a slave to luxury. [Read more…]
If there’s someone in your family that you’d like to see less of, there’s one surefire way to ruin that relationship: Lend them money.
Our families can be the greatest blessing that we ever have in this life, but they can also be the greatest burden. The key to having thriving, healthy family relationships is knowing how to foster the former and avoid the latter. And that means keeping them free from debt. [Read more…]