by Nathan Art, Ministry Solutions

For many of us, Michael Jordan created memories that may never be replaced- stories of seemingly folk legend that we will pass along to our children. He could glide through the air, dunk on much taller opponents, score at will, and hit game winning shots, all with what seemed to be the greatest of ease.  However, if you ask Michael Jordan, it wasn’t dunking from the free throw line that made him who he was, it was what was happening when the lights and cameras were off. 

 “The minute you get away from fundamentals – whether its proper technique, work ethic or mental preparation – the bottom can fall out of your game”- Michael Jordan.

What most people don’t know about Michael Jordan is that he spent hours every single day working on fitness, ball handling, free throw shooting, jump shots, among other seemingly boring exercises. He also once said that he works much harder in practice than he does in games, because games are the byproduct of practice. So if the greatest basketball player of all time spent his time working on fundamentals, then what can that teach us about church financing???

Churches have to get back to the fundamentals. It’s great to think about a beautiful, brand new, ornate, state-of-the-art facility, just as its great for young basketball players to dream about dunking from the free throw line. But what you have to understand is that it’s the fundamentals that will get you there, not a killer sermon, or a capital campaign that is 5X your annual budget, or “the guy” who strokes a check and makes all your dreams come true. It’s about working on the stuff that isn’t fun to work on, even if the payoff isn’t immediate.  Your ability to qualify for financing will be a reflection of how good you are at the fundamentals!

You will never see a better example of this until you try to get a loan from the bank. With church financing, there are two very important aspects- CASH and CASH FLOW. So, here are a few ideas to help you get there:

·         Create margin! A non-profit tax status doesn’t mean you can’t (or shouldn’t) show profit. Every $100,000 in profit you show (EBITDA) brings approximately $1,500,000 in borrowing capacity.

·         Retained Earnings! This isn’t just a line item on your Balance Sheet. This is a reflection of how good you are at creating margin. This is your WIN or LOSS Column. Just as every household should have a savings plan for a rainy day, or car maintenance, or even buying a new car or a house, your church should be no different! Take your annual margin, and put it away for another day. Banks could require you have anywhere from 20% to 40% down on buying/developing a new facility, so start planning today!

·         Develop Volunteers! There is rarely a justifiable cause for a church to spend more than 50% of its budget on Wages, Salaries, and Benefits.

·         GAAP it! If you don’t know what that is, that’s a problem. One of the biggest reasons churches are unable to get loans is a lack of clarity in their financial reporting. It isn’t the banks’ job to figure out how you account for your income, expenses, and assets. Make sure that your church is operating on an Accrual GAAP Accounting system, and if you can’t do that internally, outsource it to a firm who can.

So what would Michael Jordan tell you about winning at the church financing game? He’d tell you to stop working on your dunking, and start working on your dribbling and free throws. Don’t rely totally on capital campaigns and large donors- those things are the icing, not the cake. Instead, master the fundamentals, and then you can freely begin to focus on hitting game winning shots.

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