Strategic Business Plan
Having a strategic plan outlining the vision and the steps to achieve it is an important foundation to your organization and should address a Building Plan to allow for growth before outgrowing current facilities. Knowing who you are--whether a mega, destination, community, neighborhood church or school--and having a mission statement that reflects the organization’s heart is invaluable. Program development and fundraising initiatives should be incorporated as well as financial and community outreach goals. The plan should address worst-case scenarios. In the event of a scandal or disaster, what truly discretionary programs could be scaled back or eliminated, who would succeed the Senior Pastor or Head of School, and, as important, who could you access for help?

Strategic Partnerships
Developing relationships with various strategic partners will aid in your overall success whether considering a building program, capital campaign or improving business practices. Find partners you trust and get referrals. Consider the community and its elected officials as one of the most important partners to your vision. Be a strategic partner to smaller churches in your community by mentoring them. Fellowship with larger churches to follow their lead so you don’t have to recreate the wheel, especially when it comes to building projects.

Surround yourself with partners who demonstrate excellence and a heart for your business, such as:
* Accountants
* Financial service providers
* Fundraising professionals
* Realtors
* Architects/Contractors/Project managers
* Legal/Insurance/Technology partners

Implement and maintain financial and technological infrastructure with controls. Proper accounting and financial systems in place with appropriate controls and up-to-date technology will ensure accurate reporting and tracking of contributions, members, attendees and donors. This will help in the preparation of financial statements, capital campaign information and cash management and guard against embezzlement or fraud.

Your accountant and financial service provider can help you develop comprehensive business practices, which will improve the business office and the information disseminating from there. The management letter accompanying your annual audited financial statements will also give you suggestions for improvements and should be considered carefully. Don’t pass on the opportunity to have your financial statements audited. The cost to keep your organization above reproach in this age of Sarbanes-Oxley is minimal. When requesting financing, it serves you well for the financial service provider to know you believe it is an important part of your best practices.

Building Plan
The building plan should be developed early on and modified as needed to ensure smooth transitions. Consider phasing your building projects. Build what you can afford. It is the best means I know of to protect your organization. The vision is very important; managing growth is equally important. One does not work well without the other. Determine what your congregation can afford while continuing to expand ministry and outreach programs. One of the most common dangers we see facing faith-based organizations is being overburdened with debt. This traditionally comes from financing that is focused more on the “collateral” approach (loan to value) rather than on your congregation’s ability to repay the debt while growing church programs.

The importance of a Capital Campaign should not be overlooked as part of the Building Plan. In addition to minimizing the amount of debt required to complete the project, it also engages the congregation. A clear mission statement and well-crafted case with a call to action will provide a solid starting point. You must have congregation “buy-in” commensurate with the scope of the project to help you accurately determine what your congregation sees in terms of “the vision.” Committing resources to both the execution and follow-up of the campaign will serve you well.

Requesting a Loan
In preparing a loan application, presentation is everything. Much like interviewing for a job, you want to put your best foot forward. Present a well-organized, professional and thorough loan package. No matter what you need financing for, the loan package should include:
* Purpose of the loan
* History of the organization
* Mission and Vision of the organization
* Budget
* Capital campaign information
* Current and three years of historical financial statements
* Membership/attendance/enrollment figures
* Overview of your ministry and outreach programs
* Background on pastoral staff
* Brochures, CD, DVD on programs, services etc

The better the quality of your information, the more successful you will be. Tools that allow you to articulate specific information to those requesting it will ultimately benefit the organization in terms of maximum loan amount, maximum confidence and the best pricing available in the marketplace. 

In selecting your provider, be sure to meet not just the relationship manager but also the individual(s) they report to or the decision makers. That way, in the event that person moves on, you won’t have to start all over explaining your important work.

In selecting the right financial partner to empower the vision of your organization, care should be taken to find one that truly understands and supports your unique vision. With many more alternatives available than ever before, take the time necessary to form a relationship that will withstand the expected and unexpected ebbs and flows of every faith-based organization.

Therese DeGroot has developed and managed lending programs over the last 15 years for many banks that now specialize in lending to faith-based organizations. She is senior vice president of Community First Financial Resources Division, www.cffinancialresources.com.