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Should Churches Go into Debt?

In many senses, the church must run some aspects of her operation in terms of a business. How much should a church pay her pastor? How much should the church spend on Sunday School literature? Is it okay to go into debt? These are all questions to be considered by the church in light of its available financial resources. One must not act hastily without considering the cost and sacrifice required.
Chad Napier
Should Churches Go into Debt?

In many senses, the church must run some aspects of her operation in terms of a business. How much should a church pay her pastor? How much should the church spend on Sunday School literature? Is it okay to go into debt? These are all questions to be considered by the church in light of its available financial resources.

Philippians 4:19 was written to the believer but is also applicable to the church. Paul proclaimed, “my God shall supply all your need according to his riches in glory by Christ Jesus.” God will supply His church will all of its needs, but as a Zondervan article said, “this isn’t a promise for a material blessing. It’s a promise for a spiritual provision which transcends our circumstances.” In the article, Zondervan explored the motivations behind financial activity in this passage. Likewise, churches should examine their motives before taking on debt.

Luke 14:28 gives the church simple direction in making any choice for Christ. He wrote, “for which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?.” Before making any commitment to Christ, one must not act hastily without considering the cost and sacrifice required.

Why do churches go into debt?

As with any decision dealing with the on-goings of the church, the members are in control and must make these decisions. The members of the church are simply stewards of God’s money and blessings. All decisions of the church whether it be spiritual or economical should be made prayerfully and after much consideration. Any increase in a church’s debt must be considered in her monthly budget.

Here are four reasons churches often consider taking on debt.

1. To respond to an immediate, expensive church need without readily available funds.

Churches, private individuals, and corporations are not immune from financial difficulty. As with our homes, sometimes a church is faced with the breakdown of expensive equipment such as an air conditioning unit. Many smaller community churches are not able to financially afford a new $10,000 heating and cooling unit.

2. To invest in a growing church, making room (or attracting) more members.

Some purchases are not need-based but focus upon a desire to improve the experience of the congregation. These up-grades range from a new building to projectors, lighting, sound systems, and seating. Many churches with decreasing attendance feel these additions will attract visitors and the increased attendance of current members. Thus, there is a desired and possible result.

3. To avoid dependence on steady tithing or on individual members.

The church body must also be cognizant of the possibility the numbers of tithing members may decrease during the payment period. In that case, the remaining members will left with the financial responsibility of the note.

Some churches urge members to sign pledges for a given amount each month until the debt is satisfied. But these pledges are not legally binding and usually are not fulfilled by members who change churches.

In Proverbs 17:18, we are taught, “one who lacks sense gives a pledge and puts up security in the presence of his neighbor.” This verse not only concerns the pledge, but also concerns the impact it has on others. If it is known that one member pledges $1,000/month for the new fellowship hall, how will be other members feel when she has to move because of work obligations and no longer remits her pledge? 

4. To honor the church’s conviction against fundraising.

Some churches do not believe in fundraising. Therefore, the church will either have to depend upon a special dedicated offering or a visit to the local bank for loan financing. As for necessary needs or desired wants, many congregations are unable to write a check for the purchase and must turn to other avenues of financing.

Is debt worth the sacrifice and cost?

The church adds more than just debt to its daily concerns when she enters into a relationship with a lending institution. Consider how taking on debt will affect the church’s ability to act generously as the Spirit leads or respond to emergencies.

If the church is able to purchase the item(s) in question with “cash on hand” or from current bank account while leaving enough for any possible emergencies, a church should not indebt itself with a bank note. If a financial strain is possible with the increased debt, the church should forego the opportunity.

In Hebrews 13:35, we are taught to “keep [our] lives free from the love of money and be content with that [we] have.” Also, in Matthew 6:24, we are warned of the consequences of serving two masters and the principle that we cannot serve both God and money.

When financial strain is brought into the equation for a congregation, members begin to closer scrutinize all of the expenditures of the church including the pastor’s salary and/or benefit package. Bemoaning such as this is inevitable: “We could afford to pay off the new sound system if we didn’t pay for Pastor Steve’s cell phone bill.”

Churches are charity tax exempt bodies and therefore are not generally subject to tax laws or reporting. However, when a church begins a relationship with a bank, it must consider the legal obligations and responsibilities which come with this relationship. The bank is going to require a reporting of all of the income and liabilities of the church.

Additionally, the church will have to put up collateral to stand good for the money to be loaned. The collateral is often the church’s building and/or land. The church must always consider the “worst case” scenario when indebting itself to such a degree. If the church for some reason becomes unable to repay the note, the members must be warned that the church’s existence could be in jeopardy.

What does the Bible say about debt?

With all of the Bible verses concerning debt, none of them condone it, neither mention it positively.

The phrase “you shall not borrow” is included in both Deuteronomy 15:6 and Deuteronomy 28:12, prophesying the fullness of God’s blessings with the ability of His people to lend, but without the need to borrow. By adding a bank note into the church’s monthly equation, the financial relationship can often convolute her purpose within the community.  

The church should be careful and deliberate prior to going into debt with a lending institution. It must consider what is going to be purchased in light of the financial condition of the church. Still, there are reasons and situations the church could consider outside financing.

Chad Napier is a believer in Christ, attorney at law, wannabe golfer, runner, dog lover, and writer. He enjoys serving his church as a deacon and Sunday School teacher. You can find him on Facebook, Twitter, and at his golf devotion par3sixteen.com. He and his wife Brandi reside in Tennessee with their canine son Alistair.

Photo Credit: Unsplash/Ben White


Originally published August 05, 2019.