ECCU loves to make ministries more effective. For years we did it primarily by financing their facilities, but we also recognize that sometimes buying may not be the best option. This is one reason our ministry development officers consult with ministries—to look at their needs and help them determine if they are better off buying or leasing. From those discussions, here are a few reasons that always top the list when leasing wins out:
- Save a buck or two. Sometimes, it’s just plain cheaper to rent than to own.
- Financial Freedom. The advantage of not being leveraged is considerable financial freedom. This freedom allows ministries to focus more wholly on ministry opportunities and enables them to change course as new needs arise.
- Adaptability. Ministries with a strong emphasis on their community and the world at large may be less inclined to spend a lot of capital (money and energy) on a permanent facility. Renting creates more flexibility to change and respond to community and missions needs.
- Imperviousness. When the economy gets ugly, renters are often better positioned to withstand the blow. Ministries that are more leveraged—and in some cases over-leveraged—have considerable constraints when attempting to adjust to tough economic times. They are beholden to the debt they carry. I recently read about a church that took on debt to relocate in a new subdivision. Then came the economic crash, and the church lost it all. Had this ministry weighed the risk appropriately ahead of time, they may have realized that leasing a space was a wiser option.
Of course, there’s a long list of pros for buying as well. My advice? Seek the Lord, wait upon his timing, and consult a trusted financial partner for wisdom about what is best for your ministry.
How about your ministry? What have you found to be pros and cons of leasing and buying?
We all know that whenever corporate officers or signers change, we need to update our account agreements with our financial institution. For many churches, this often becomes an annual exercise when board members change.
However, as a banker, I can tell you that it is not uncommon to come across organizations that don’t really know who’s been given authorization over accounts and services. And many of these accounts have significant balances or transaction capabilities. While organizations typically remember to update account agreements with new signers, they often overlook accounts or services established in the past. They believe they’ve given authority to trustworthy individuals, but the potential for fraud increases when they don’t pay close attention to managing these accounts and services.
My suggestion is to review—at least annually—all authority granted by your organization to individuals. I’ve found that using a tool called “authority granted” is especially helpful. It lists every relationship the organization maintains with the potential of financial transactions. It then also identifies who in the organization has authority and to what extent. By reviewing this each year with your board, you will ensure that everyone understands who has authority, as well as the level of authority. Plus, by reviewing this in relationship to all your accounts and services, you can also begin to see if there are areas where there aren’t adequate internal controls (separation of duties or dual custody). Once reviewed, verify the information with your financial institution. Ask them to make sure their records match what yours. You can also ask them if there are any other agreements in place that you are not aware of. It is not uncommon to discover services or accounts that were opened years ago, not currently in use, but still with users eligible to execute transactions.
When I first became treasurer at my church, I went to my financial institution and asked them to conduct a full review of our accounts and their records. To my surprise, I found that there was a gentleman still authorized on our accounts for a service we hadn’t used in over ten years. While there had never been a problem or issue, it exposed an area of inadequate controls.
So now, every year I review, update, and have our board approve a new authority granted document. Then I go to our financial institution and have them compare it to our accounts and services.
How do you make sure who has authority on your accounts?
At church on Sunday, I heard about a missionary in Africa who dedicated his life to sharing the gospel with people who had never even heard the name of Jesus. Ultimately, his mission cost him his life. I was reminded—once again—of the calling we all have to make disciples, and of the awesome privilege we have at ECCU to participate in missions.
Looking back over the past year, we’ve had several opportunities to partner with our mission agency members and their missionaries in creative ways. A couple examples:
- In October, a number of ECCU members from various mission sending agencies, churches, and other organizations traveled to Cape Town, South Africa to participate in the Lausanne Congress on World Evangelization. Like other financial institutions, we monitor the use of member debit and credit cards for unusual spending patterns. While a bank might have immediately blocked cards with multiple purchases from South Africa, our familiarity with the evangelical community allowed us to quickly ascertain that this was legitimate spending for our members.
- Over the summer, we were asked by a missionary member serving in Mexico if it was possible to set up a special fundraising account for his friend in need. He wanted to raise funds for this man’s son, who was born with a heart defect and needed surgery. God laid it on the heart of this missionary to find a way to raise the $70,000 in funds required, but he needed counsel on how to set up the account. After talking it over with him, we set up a relief fund account to hold donations for the child’s surgery. We eagerly await the day the goal is reached!
What unique needs do your missionaries have? How can we help you, as a sending agency, better equip your missionaries?
