ECCU Blog

Before mid-2008, most ministries had little trouble qualifying for financing. If they met a lender’s criteria, they were deemed a healthy borrower and it was simply a matter of time and paperwork before the needed funds were in hand.

Then the Great Recession hit, and when it was over, the definition of a “healthy borrower” had changed dramatically. I asked Mike Boblit, one of ECCU’s regional directors, a couple questions about this dramatic shift.

First question: What is one criterion used to underwrite loans that is dramatically different today?

Mike: I’d say the debt coverage requirement. Prior to 2008, if a ministry didn’t have past cash flow statements that demonstrated their ability to make mortgage payments of a certain size, they could meet this lending criterion by presenting a strong budget. Meaning, if their budget showed how they could cut other expenses to make a new mortgage payment, that would satisfy the debt coverage requirement. Today, borrowers must demonstrate, from historic cash flow statements, that excess funds are available to make a new loan payment.

Second question: During and since the recession, the term “tight credit” became commonplace. What does it mean and what is one significant way it has affected ministries?

Mike: Tight credit can be interpreted a number of ways. One is lenders being “tight” about lending money, with “tighter” borrower criteria. This has certainly affected ministries by making it difficult to find a willing lender or more difficult to qualify for a loan. Another way to look at “tight credit” is in reference to ministry borrowers. In this case, it means a ministry is highly leveraged. This looks like a loan payment that is 30 percent or more of a ministry’s income, which creates a tight budget that limits the ministry’s ability to make choices about how they use ministry funds.                                  

I asked Mike these questions because he and two of his fellow regional directors will present a webinar on February 21 titled How to Look Like a Healthy Borrower. Besides their lending expertise, all three of these men gained a wealth of experience by working with ministries during the recession and helping them return to financial health.

When I asked Mike what people could expect to learn by attending this webinar, here’s what he said:

“We would expect attendees to have a better understanding of how a lender will evaluate their ministry’s ability to qualify for a loan. In other words, the criteria a lender will use to make lending decisions. Additionally, by understanding these criteria, attendees will have a better idea of how to prepare financially to borrow funds if their ministry’s strategic plan includes purchasing or building a new facility and using a loan as a portion of the funds to accomplish this.”                                                                                                      

If you’d like more information about this webinar, you’ll find it here.

This is the final post in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Dave Moja is a partner and national director of not-for-profit tax services with CapinCrouse LLP. He will discuss recent Internal Revenue Service (IRS), congressional, and court pronouncements. He’ll also talk about ministers’ payroll and unrelated business income as well as health care compliance issues. Here are Dave’s responses to my questions.

MBG: How will your presentation help attendees serve their ministries?

Dave: The tax laws affecting churches and ministries are constantly changing. And, in many cases, the accounting teams at these organizations do not have a central place—no “one-stop-shop”—where they can go to keep up with all these changes. This session will provide up-to-date information on tax and compliance issues that should be pertinent to attendees. They should leave better equipped to handle the continual onslaught of government requirements. We are most definitely in a “season of compliance.”

MBG: What are three important takeaways attendees will learn during your presentation?

Dave: The first thing attendees will take away is a summary of recent IRS pronouncements that affect their ministries. They will also receive practical insights and a list of the best methods for handling not-for-profit tax and compliance issues. A third takeaway will be predictive insight into what new requirements are expected in 2013 and beyond.

MBG: How will the format of the forum make it an even more valuable learning experience?

Dave: I will tackle the daunting task of keeping up with compliance issues by providing a number of handouts that should allow attendees to focus on the presentation and take valuable data with them for future reference. This kind of material is best explained in a give-and-take format, so attendees will have ample opportunity to ask questions.

Dave will present at the financial forum in Colorado Springs on December 4, 2012. Follow this link to learn more and sign up.

This is the fifth in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Brian Kluth is former senior pastor of the First Evangelical Free Church in Colorado Springs, who commissioned him as a generosity minister-at-large to the global church, and founder of Maximum Generosity. He will appraise current funding realities in churches and ministries today and share best practices and resources that staff and leaders can use to inspire generosity and increase giving. Here are Brian’s responses to my questions.

MBG: How will your presentation help attendees serve their ministries?

Brian: Growing economic difficulties are leading to decreased giving in many churches and ministries. As a result, they’re having to adjust to a “new normal” when it comes to finances, fundraising, and budgeting. This session will help attendees discover practical and creative ways to move their ministries forward in the midst of tighter budgets and a challenging fundraising climate.

MBG: What are three important takeaways attendees will learn during your presentation?

Brian: Empty Tomb, Inc., reports a 40-year decline in the percentage of income that Christians in the United States donate. The first thing attendees will take away from this session is an understanding of how major national trends impact giving to ministries and churches. They will also discover ten ways God provides and moves ministry forward, including nine that are possible even when the budget says “no.” The final takeaway is a list of five key ingredients needed to make any fundraising and generosity initiative more successful in churches, ministries, and the work of missionaries.

MBG: How will the format of the forum make it an even more valuable learning experience?

Brian: A variety of valuable materials will accompany the presentation, including graphs on giving trends, lists of the 50 best practices to increase giving and 80 helpful websites, planning worksheets, and other generosity-related handouts. Attendees will return to their churches and ministries with many resources to share with staff, leaders, and committees.

Next up will be Dave Moja, a partner and national director of not-for-profit tax services with CapinCrouse LLP, who will discuss recent Internal Revenue Service, congressional, and court benefits. He’ll also talk about ministers‘ payroll and unrelated business income as well as health care compliance issues.

Brian will present at the financial forum in Colorado Springs on December 4, 2012. Follow this link to learn more and sign.

Would you like to learn about important ministry financial issues like the impact of ethics on accounting and how to stay informed on legislative changes affecting ministries? What about fundraising best practices or the challenging task of aligning your ministry’s money and mission?

You can learn about these topics and network with other ministry leaders at the 2012 Financial Forum for Ministries in Colorado Springs on December 4, 2012. For the fifth consecutive year, ECCU is teaming up with CapinCrouse LLP to offer this event.

This year’s presenters include John Thornton, professor and Leung Chair of Accounting Ethics at Azusa Pacific University. John will talk about the impact of ethics on accounting.

There’s no cost to attend this event, which includes lunch and allows you to earn up to 5 CPE credits¹ and 0.4 NACBA CEUs².

Two presenters at the Colorado Springs forum—John Thornton and ECCU Ministry Development Officer David Lee—are also presenting at the three financial forums in California this week. I introduced them in past blog posts. Joining them in Colorado will be Brian Kluth and Dave Moja, who I’ll introduce to you in the next couple of weeks.

¹ _{CapinCrouse LLP is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors through its website: www.learningmarket.org.}

² _{CapinCrouse LLP is a National Registered Continuing Education Provider (NRCEP) with the National Association of Church Business Administration (NACBA). This program is a premier comprehensive continuing education program related to administration in the local church. It is designed to enhance the ongoing professional development of NACBA members and other ministry professionals, through the offering of quality learning experiences. 0.1 Continuing Education Units (CEUs) will be granted to persons who properly register and attend one contact hour of a minimum of 50 minutes of lecture, presentation, or discussion on approved topics.}

This is the fourth in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Gary Hoag serves as the Generosity Monk, providing spiritual and strategic counsel for denominations like the Evangelical Free Church of America and the Anglican Mission in theAmericas, and for ministries like Prison Fellowship and International Health Services. He will speak at each of the three 2012 California forums about your stewardship responsibilities as a leader and encouraging others to generously participate in your ministry despite tough times.

Here areGary’s responses to my questions.

MBG: How will your presentation help attendees better serve their ministries?

Gary: My prayer is that people go away informed and inspired to do their work in a way that is biblically faithful and financially fruitful. I will seek to accomplish this objective by presenting biblical principles, inviting interactive discussion, and sharing an amazing story about a ministry leader who is a good example for us all.

MBG: What are three important takeaways attendees will learn during your presentation?

Gary: Call it going the extra mile if you wish, but I want attendees to learn six important lessons from Scripture—three tips for practicing faithful stewardship in tough times and three tips for encouraging Christian generosity in tough times. It’s my clearest and best advice for leaders who want to be found faithful and fruitful                                                   

MBG: How will the format of the forum make it an even more valuable learning experience?

Gary: This session is content oriented, so a formal presentation and the detailed outline will contribute substantially to the experience. The opportunity to ask questions will help attendees firmly grasp the concepts presented.

Next up will be Pastor Brian Kluth with Maximum Generosity, who will be presenting on creative ways to move ministry forward even in the midst of tighter budgets and a challenging fundraising climate.                         

Follow this link to learn more and sign up for the financial forum in your area.