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Planning to Borrow
If you've purchased a car or a home, you're probably familiar with loans. A Cornerstone Fund loan is similar in many ways - but we see our role as more than simply a lender. The Cornerstone Fund is a ministry dedicated to helping churches steward all of their assets and gifts - land and physical facilities, member contributions and savings, congregational ministry and outreach. From your first call, we help you examine your building plans and objectives to ensure they suit your church's resources and financial goals, as well as your plans for ministry. Because we've worked with hundreds of churches around the country, we can often help congregations identify options they hadn't considered. Where congregations are new to the business of capital improvements or expansion, our team can offer important expertise to strengthen your decision-making - at no additional cost to your church! We've even been known to come up with a cost-saving idea or two.
Define your project's scope
Ask ten different church members what capital project they think is most critical, and you may well get eight or ten different answers. Most churches have far more on their "to do" lists that they can afford to accomplish at one time. So after addressing issues of health and safety, ask "What improvements are most critical to our mission?" If the answer doesn't come easily, consider seeking counsel from conference staff or other outside resources. And remember to remain open to innovative solutions - sometimes, an unexpected "third way" can reconcile competing priorities and yield wonderful results.
Develop your budget
Once your project is defined, determine the cost of completion, taking into account every relevant expense. Be sure to seek input from the people who will be directly affected by your project, as well as others outside the immediate project planning team - you might be surprised at the good ideas you'll gather. Many a church has budgeted construction of a new addition - without budgeting funds for decorating and furniture! And add a contingency of at least 10% to cover cost overruns, price increases and simple oversights. As a general rule, your budget for a capital project should not exceed As a general rule, your budget for a capital project should not exceed If your total project budget exceeds the resources you expect to have available, return to Step 1. Can you break down your goals into smaller, less expensive steps? Or can you accomplish your goals in a more cost-effective fashion? Get creative - great solutions often begin as zany ideas.
Plan your financing
More often than not, churches undertaking capital improvement projects launch a capital campaign to raise money to cover the cost of the project. Pledges made to the capital campaign are over and above regular tithes and contributions, and are generally paid over a three to five period. With a Cornerstone Fund loan, a church can begin its project almost immediately, repaying the loan as capital campaign pledges are received. Within a congregation, however, opinions will vary on the best way to pay for a capital improvement project. Some will want to avoid debt at any cost - waiting until all capital campaign pledges are paid before breaking ground, or even withdrawing the principal of an endowment designed to fund ministry for years to come. While a Cornerstone Fund loan represents a debt that is secured by the church's real estate, it offers a church the ability to move forward quickly, taking advantage of the enthusiasm generated by a new phase in the church's life. As repairs proceed or new construction rises from the ground, the congregation sees its dreams quickly becoming reality - and time after time, that excitement has translated into larger contributions and greater financial commitment on the part of church members. What's more, mission expands sooner, drawing more people and more energy into the congregation to strengthen both income and outreach.
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