The American church is dependent on the generosity of its members, as opposed to some churches that benefit from state-supported taxation.
We are increasingly daunted by challenges in teaching, inspiring and receiving that generosity. While I strongly believe that stewardship should be preached from the standpoint of abundance and not scarcity, the needs of congregations today outpace the will of people to give, especially given the generational differences between “the great generation” and baby boomers and then between baby boomers and millennials.
Churches need money for ministry. We typically generate income from contributions and offerings, program fees and revenue, issuance of debt (yes, it is a source of funds…albeit one that must eventually be returned) and investment income. Fortunately, many churches are investigating and establishing endowments that foster planned gifts from donor assets as opposed to annual gifts from donor income.
But are there other models available – ones that can fund ministry and operate with integrity, but not displace the priority of free-will giving? I believe so.
There is one asset that nearly all churches possess—land. Placing buildings on church land does not have to be the land’s sole function. Land can also be used advantageously to fund ministry.
The Collegiate Churches of New York City, which include the congregation I presently serve (Marble Collegiate), have embarked on a joint project with a recognized developer in New York City. We plan to construct a mixed use facility of some sixty stories that will encompass both needed sacred space for our ministries and residential condominiums for the public at market prices.
Working with a developer enables the church to obtain first-rate connections in navigating the vast legal requirements of the city, while also securing advantageous financing for the project. What did the church bring to the relationship? Land. Valuable land that sits in proximity to Fifth Avenue and the Empire State Building. We will split the profits 50%-50%, and after all expenses, that will more than secure a healthy return for our own endowment.
We’re not alone in this. I am aware of other churches utilizing the same concept with joint ventures. In Charlotte, North Carolina, for example, Sharon United Methodist Church, in the Southpark region, is embarking on a similar mix use approach that will gain the congregation a brand new facility.
Context determines some possibilities, of course. In urban areas, congregations can use land for mixed use projects jointly occupied with other tenants or owners. Additionally, some simply use their land as the investment in the project with no plan to occupy, producing new tenant buildings, commercial spaces and retail ventures. In rural areas, land can be used in leasing opportunities for timbering, oil and natural gas extrapolation, tenant farming or other uses.
Tips for Developing Successful Land-Use Strategy
Before embarking on such an undertaking, keep these strategies and recommendations in play:
- Make sure your leadership (and as much as possible, your congregation) is on board with the venture. It will call for many diverse ways of thinking and acting over the life span of the project. Once a contract is executed, there is no reversal. Just because you are a church does not mean that even the best of business partners will allow you to back out. They can and will use any means necessary, including the courts, to enforce the agreement.
- Seek out professional consulting or support before even attempting to explore a possible land use swap or investment. Consultants such as real estate or capital developers, legal counsel, professional property management and banking/financial companies are a few desirable resources.
- If a project seems possible, do not “step over dollars to save dimes.” You will need to be prepared to spend some funds on legal and professional counsel to measure the project for economic feasibility as well as legal stipulations. You will need to enter the project with a very well-defined partnership agreement.
- Finally, it takes time. It will take tremendous time. You will need a project manager to work on your behalf and solely on your behalf. But such expenses can be drawn from the financing you arrange. Be patient, knowing that you are in this for the long haul and be as flexible as necessary.
There is an old saying: “God has made all the land that will ever be.” Real estate can be a multi-beneficial asset for congregations — not only as the sacred property upon which they build their facilities, but also for creative investment ventures that offer very attractive funding models for advancing ministry.
Dr. R. Mark King is the executive minister at Marble Collegiate Church in New York, NY.