Should the church use debt?

By glblguy

This is a guest post from Kevin, the author of No Debt Plan. He blogs about getting and keeping you out of debt.

Just like any other church ours started out small. A handful of core families from a larger church decided they weren’t happy with the current direction of things and split off. Starting out they held church in ‘borrowed’ buildings – the homes of members primarily.

Soon that starter locations were too small for the number of people each Sunday, so the church moved to a ‘real’ church building. I don’t know all of the financial details of the transaction as it was before my time. I’m guessing there was some debt involved.

Growth followed. Soon that building was stretched to the max with a full church body. What to do?

It was time for a big move. A massive move. A move to a location with a lot of room for growth. So once again the church moved. This time a large amount of debt was incurred to secure the location we are currently in. Naturally I won’t share all of the details, but it is in the low seven figures.

My question to all of you Gather Little by Little Readers is this: is debt an appropriate method of church growth?

I hadn’t really considered this question in the past. I didn’t know a lot about our church’s finances until they sent out a budget update. We are – God willing – making significant progress on the building debt. For now, it seems all is well with the budget. (And we’re already starting to stretch the capacity of this new location – a good problem to have I suppose!)

But what if things change? Could a bank foreclose on a church? That is an odd statement to consider in my mind. A church? Foreclosure? I suppose just like any other mortgage or loan the bank has the right to come claim the asset if the borrower doesn’t pay. I doubt it would ever come to that as we have many people in the church that could pledge a large portion of cash in a crisis to right the ship.

We accept the use of ‘good’ debt in our own personal lives (mortgages primarily). Does the church get the same leeway? Or should a church stick to organic growth funded from its donations and programs alone?

I don’t have a solid answer, so I’m tossing it out to all of you. What do you think the Bible says on this topic?

Photo by: Bruno Girin

18 Responses (including trackbacks) to “Should the church use debt?”

  1. Chris Says:

    The Bible is anything but silent on the topic of money. And as you probably already know, anywhere debt is mentioned, it carries with it a negative connotation. There is nothing wrong with a group of like-minded individuals going in together to get a loan to buy real estate or to build a building or whatever it is. However, what I believe to be wrong and against the Bible, is when they do it in the name of Jesus Christ. My church has so much debt that only around 6% of the total budget goes to ministry expenses. That’s pretty sad when you realize that we don’t even tithe a tenth back to God from the church budget. And there are those who are advocating going deeper in debt to build more. It’s madness and it needs to stop. The church should not be in the real estate business.

  2. Heather Young Says:

    I think it depends on the situation so there is no definitive answer but in general I think that since God is perfectly able to provide the funds for a new building without taking out a mortgage that in general a mortgage should be the exception not the rule. In fact, after much prayer we left our current church after they took on a 1 million dollar loan for a new church building and started a huge campaign “selling” their idea of a mega church.

  3. ChristianPF Says:

    Great question – difficult to answer. The reason it is difficult is because most churches (at least as far as I know) use debt. I agree with Chris that any verses I have seen about it are in a negative connotation. Personally, I think it comes down to stewardship. In the parable of the talents, the stewards were judged based on what they did with what they had. They guys who made good use of what they had were praised, the one who didn’t didn’t get to hear nice things from the master ;) Each one of us and each church is going to be judged based on what we did with what we were given. I have found in my own life that when we work really hard to be a good steward God backs it up with His power. Almost like a dad telling his 10 year old, if you can save $50 for this bike, I will pitch in the rest. I think when we rush to do things in our own power – quickly running out to get a loan in some cases, God’s power isn’t present, because our faith isn’t there to trust in His ability to provide.

  4. "Mo" Money Says:

    My church recently put down $ 1,000,000 on a piece of land and mortaged $2,000,000. The land is appraised at $5,000,000. This is a growing church that needs a larger building and parking lot because the services are full on Sunday morning. The church tithes 15% to missions and has done that for many years. They have many other community programs throughout the year. It is one of the few churches that has a high rate of tithers (according to the last sermon 60%). While most churches have 18% tithers. I think it takes faith to go into debt and beleive that God will provide.

  5. Damsel Says:

    I think it comes down to praying honestly for the church leadership, that they will follow what God is leading them to do WRT the church funding. After you pray, if the leadership makes a decision you don’t agree with, it then becomes an issue between you and God. Of course, that doesn’t automatically mean that the church leadership made the correct decision. God may lead you to leave that church.

    I think that the question of “trusting God instead of using debt” is rather a moot point. God may very well lead a church to get a mortgage. At some point, you have to be able to let go and trust your church leadership to do as God leads them.

  6. bdentzy Says:

    “Could a bank foreclose on a church?”

    Absolutely. Sadly, I’ve known this to happen. Not at my church but at another church in town.

    My current church has debt. We are working very hard to pay it down and to involve the membership of the church to do so. But our vision is larger than that.

    We live in a society held captive by debt. So much debt that some of it is now held by foreign governments. In a real sense, our nation is now servant to foreign governments (borrower is servant to the lender). And the issue is much larger than whether an individual corporate body has debt. The church won’t be out of debt until both the institution (that’s not a bad word) and the individuals are out of debt.

    That is the heart of the leadership at the church I attend. We are not simply asking people to give to a campaign to reduce our corporate debt. We are asking our people to take a hard look at their finances and to get both themselves AND our local body out of debt. Until that happens, the church is in debt whether we owe money on a common building or not.

    I would be interested to hear if any of you have suggestions or have used strategies to encourage others to get themselves out of debt and to contribute to a campaign to do the same at a local body.

  7. No Debt Plan Says:

    Some great comments here, guys. Definitely interesting. I am not overly concerned about the debt in a financial sense. But on the God side of the house… your comments are helpful.

  8. Going Gazelle Says:

    Interesting comments….

    I find it interesting that NO Place in scripture is their biblical precedent for God EVER using debt to accomplish his plans.

    I find it interesting that according to a Barna study a vast majority of pastors who lead their congregation into debt do not stay around more than 3 years. (They get run off before the debt gets re-paid).

    How would bible stories change if debt was involved?

    Noah’s boat got repo’d because he couldn’t make the payments on his construction loan?

    The real reason Joseph couldn’t get a room at the Hilton was because he left home without his American Excess card! However, we would now sing – “Away at a Marriott” because he did bring his MasterCard.

    Paul posted bail using his Visa card so he wasn’t in jail writing letters.

    I think the reason our churches have debt is because the people running them have become accustomed to Debt is normal. They run their businesses with debt. CPA’s and MBA schools crank out the “good” debt theories. Our church leaders get accustomed to running a church the way they run their businesses. Then we get caught up the the Cold War – Arms Race of mega churches. Gotta have a bigger, fancier, building. We need the bowling alley and resort style health spa at church….

  9. Jeremy Davis Says:

    I believe Going Gazelle hit the nail on the head. It’s so easy to go into debt without every truly thinking about it. When you can buy anything for low monthly payments, we never think about how much debt it is really costing us.

    The only thing I have to add is a verse that Dave Ramsey often quotes when discussing church debt.

    Proverbs 10:22
    “The blessings of the Lord makes one rich, and He adds no sorrow with it.”

    If you take the verse to heart then I guess it’s bad to go into debt if that debt does anything to hinder/hurt your ministry.

    Also, I’m not in favor of the whole debt = faith mentality. To me it seems backwards. Pray for God to provide then purchase what you want after He has provided, not purchase what you want then pray for Him to provide.

  10. Frugal Vet Tech Says:

    “Mo” Money said: “I think it takes faith to go into debt and beleive that God will provide.”

    I think that’s sort of backwards – God says we are supposed to trust in him to provide. Taking out debt is not trusting in God to provide – it’s using our own, human ways to “get” money to do what we want, when we want. Having faith and believing God will provide means believing Ge will, in fact, provide what you need when you need it (and not a moment sooner, oftentimes). I’ve seen God do some pretty amazing stuff when people have given him the chance to.

  11. Ryan McLean Says:

    A church needs to move forwards. If getting into debt is the best way to move forwards as a church then there is nothing wrong with it. If it will hold them back then they shouldn’t do it.

  12. Scott Says:

    Two thoughts:
    Rather than keep expanding into a massive church, it seems more prudent to create church plants to foster growth. A series of smaller churches in the area reduces the need for one a supersized building.
    In K.P. Yohannan’s book Revolution in World Missions, he argues that the millions and millions spent on American church buildings is not the wisest use of God’s funds when there is such a huge need for missions support. I just hope we’re not creating a bunch of beautiful but empty cathedrals such as Europe now has.

  13. Catherine Says:

    Why does the church exist in the first place? To provide a communal place to gather and worship? If so, it ultimately doesn’t matter where people meet.

    Churches have become just as guilty in “keeping up with the Joneses” as other institutions. They need to start PRACTICING WHAT THEY PREACH. This will perhaps solve a the bigger problem of younger people (of all denominations) leaving the churches for “unorganized spirituality” to replace “organized religion”.

  14. No Debt Plan Says:

    @Scott: While true and I agree with you, I also think there are some benefits to scaling up in terms of programs, etc.

  15. Four Pillars Says:

    Interesting thoughts – I don’t see why churches shouldn’t use debt – even if the bible frowns on it, the reality is that debt is generally the only way to buy any sort of real estate.

    On the flip side – yes, churches can and should be foreclosed on – like any other person or business they have to stay within the budget.


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  17. Jason Fischer Says:

    An article I wrote recently speaks directly to this issue.