Phase I Church Building Project FAQ
AfterthoughtAt the very beginning of the building program, the following should be considered in sequence:
A working budget prior to building should be prioritized as:
Actually, money is secondary to the need of the building. The size of the building must be first determined in order to accommodate the current congregation plus 50% extra growth. Once the size of the building is known, multiplying it by current $/sq. ft. to come up with the budget. If there is not enough money, then do fund raising like love offering, pledge, special program, and/or selling church bond. Last resource is to finance through banking institutes. Generally speaking, an average family unit can offer or lend the church $4000 to $5000 depending on the location of the church (higher in California, lower in southern states ... etc.)
We paid about $23,000 to Security Church Finance (SCF) for issuing $600,000 bonds. The trust company for our bonds is American Church Trust (ACT) Company which is a sister company of SCF. Both companies are in the same building in Northwest Houston. We paid ACT a fixed $150/per month until all bond matured and some percentage of the balance fund kept in the account for "maintenance". Therefore, make sure the bond sale day is very close to the time you need the money to pay for construction (say, one month).
We sold more than 98% bonds to our congregation (members and their families and friends). Although we did emphasize on selling bonds to Christians only, few non-believers bought our bonds anyway because of the comparable interest rate. We sold them all out in 3 weeks.
In average, for Chinese congregation, the total amount of bonds issued can be up to $4,000 x number of church members. For example, a membership of 200 can issue about $800,000 bonds without much problem. Of course, this is an average number. Some "wealthy" church can afford $5,000 per member. Keep in mind, the total bond amount can be up to 4 times of the church total annual budget or offering (funds for general, mission and building etc).
The only advantage of issuing church bond is that people can roll over their self-directed IRA and qualified annuities or 401K to purchase church bonds. Therefore, the high number of middle aged members, the high probability of getting all the bonds sold fast since most of them should have IRA or some kind of self-directed pension.
Once you have decided to sell bonds. Preparation work is very important such as making the congregation aware of the importance of getting IRA and CD ready. That's why "professional" help from church finance company like SCF is needed. They will help you well prepare for the big day which is the bond sale kick off day.
The most important things needed to be done from the beginning are:
Everybody in the congregation can participate in the bond offering because the denomination of the bond issues should have a large range. The denomination of church bond can be as low as $100. It is all up to your church in deciding on the denomination. Actually, few of our church kids did buy some of our church bonds. The emphasis of the bond sale should be put on the spirit of unity in building the God's temple, not the amount that people buy. That is the reason why, in addition to the bond sale, some other fund raising activities are still needed, like walkathon, sport fund raising day, garage or auction sale (goods and/or services) ... etc. How many activities the church should hold varies with your church size and man power.
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