What should a church do when numerical growth overwhelms existing physical facilities? If the growth is expected to continue, most churches would simply borrow the money from a bank and build the additional capacity. This is certainly the most common approach — Larry Burkett has noted that “ninety percent of all church building programs include indebtedness.”1 The consequences of church debt vary. Some will be able to pay off the loan with few problems; others will find their budget cramped for years until the debt is paid off. A few will be driven into bankruptcy and shame when unexpected events hinder repayment. But to Christians, the principle of church indebtedness is an issue of even more importance than the material consequences. What should the church member think about a congregation borrowing money?
First, debt is not something that should be entered into carelessly, or for things that one can easily “do without.” The conditions of lending in Exodus 22:25-27 and Deuteronomy 24:10-13 suggest that borrowing is usually a last resort of someone who has very little left — even to the point of using his clothing as collateral for a loan. Borrowing so that non-essential activities can be continued is unwise.
Second, the church should aspire to be a net lender to unbelievers. In Deuteronomy 15:6, God’s blessing involves the ability to lend: “you shall lend to many nations, but you shall not borrow; you shall reign over many nations, but they shall not reign over you.” A similar statement is made in Deuteronomy 28:12, in a listing of all the blessings that accrue to obedience. In Deuteronomy 28:44, borrowing from unbelievers is one of the consequences of disobedience. In III John 7, John recommended for support those missionaries who had refused assistance “from the Gentiles.”
Within the body of believers, lending may occur, but it should be at zero interest (Exodus 22:25; Deuteronomy 23:19, 20). A case might be made for lending at a rate of interest equal to the rate of inflation, since the money repaid would have the same real value as the money lent. (In the hard-money economy in which the law was given, inflation would not have been a serious issue.) Nevertheless, it is at least clear that the Biblical loan of charity was not to be made with the hope of gain.
Third, banks that lend to churches will sometimes require one or more members of the church to accept personal liability for the loan if the church does not repay. This may be the clerk of the session, or the entire session, or deacons as well. This flies in the face of the admonishment that a Christian avoid being “surety” for the debt of another (Proverbs 6:1-5). If the church borrows at all, it should do so in a way that does not involve surety.
Often, church borrowing neglects all of these principles. Churches borrow without thinking of “non-essential” activities that can be eliminated to make room for debt-free (or at least low-debt) growth. What are the core responsibilities of the congregation of believers? They are to engage in Biblical worship, to preach and teach the Word of God, to administer the sacraments, to carry out church discipline, and to minister to those who are poor and needy.
Modern churches might do well to take a little instruction from their predecessors in this matter. Faithful congregations historically have had different concepts of what core ministry concerns were. How many old church buildings (say, pre-1850) included a gymnasium? Or a large Sunday School wing? Or a youth center? Yet most Christians today would reject such a church as devoting too little attention to basic avenues of ministry.
It would be difficult to say that the church should never fund a youth center or gymnasium. Perhaps these congregations of two centuries ago would have purchased facilities for these things if they had been wealthier. But modern churches might want to reconsider some of the decisions that lead to a “need” for extra space. Is a conventional Sunday School absolutely essential? Or should the church focus on training heads of households to carry out the responsibility of providing spiritual leadership in the home? (Or maybe church members can rotate in groups through Sunday School and attend once a month.) Is space for “children’s church” a critical need? Or should four- and five-year-old children be expected to sit with their parents in worship services? (Extra square footage in the sanctuary might not be as expensive as adding space in another wing of the church.) Should the church fund a youth center? Or does recreation fall under the domain of the family?
As Social Security is for civil government, some of these church functions are the “third rail” of church affairs. How can one have a real church without separating families into a dozen age-divided Sunday School classes? (Before Sunday School came along in the mid 1800s, Christians must have been dreadfully immature.) How could we possibly give up the opportunity to have our teenage children mingle with their teenage brothers and sisters in Christ in a youth center under the supervision of a dynamic 25-year-old youth pastor? And so, for the sake of these peripheral goals, the church borrows money. Are these needs really pressing enough to justify the servanthood of debt?
Growing churches have alternatives to debt. One is, quite simply, the generous giving of the people of God. When God has commanded the people of God to build houses of worship in times past, they have been built without debt, by gifts for that purpose. The tabernacle was built in this way (Exodus 25:1-7; 35:4-9, 20-29), and in fact the people had to be stopped from bringing more (Exodus 36:1-7). When the temple was constructed in Jerusalem, King David and the leaders of Israel donated massive sums out of their private fortunes (I Chronicles 29:3-9). When King Joash restored the temple about two hundred years later, the funds came from “all the leaders and all the people” (II Chronicles 24:8-11).
Congregations could borrow from within the body of Christ, at zero percent interest. This is rarely done. Yet this would avoid putting the church at the mercy of unbelieving lenders, which can happen in the event that unforeseen circumstances prevent timely repayment. In their book The Debt-Free Church, Jeff Berg and Jim Burgess relate the story of a large West-Coast church that borrowed millions of dollars for a new building through interest-bearing bonds, then suffered a decline in attendance and giving when the senior pastor left. The church refinanced its obligations with a bank at a lower interest rate, but continued to struggle. When a payment was late, the bank essentially took over the finances of the church, requiring budget drafts from the staff and “suggesting” cuts in certain areas. Churches should seek to borrow from believers first, before going to unbelievers.
When the church does borrow, it should refrain from any arrangement that requires any member to be surety for others. No need, however pressing, can be an excuse for putting a church member in such a position. While Christians might legitimately differ about the propriety of building a gymnasium or borrowing from those outside the body of Christ, it is clear in Scripture that surety is extremely unwise. This distinguishes the common household mortgage loan from a bank’s loan to a church, in principle. Cosigning on residential mortgages is rare; but banks will sometimes ask that particular church members accept liability for the debt taken on by the whole church. This can be disastrous. As Berg and Burgess explained:
When a ministry fails, its creditors usually demand payment. Most ministry loans are issued by banks and other commercial lenders, rather than by fellow believers who are prepared to forgive the debt. In fact, creditors often go to great lengths to recover their money when a ministry fails. More than a few ministry leaders who personally guaranteed their ministry’s loans have been pursued by the ministry’s creditors.2
It is rare, but not entirely unknown for the church members themselves to be billed for a bad debt. This might be done if the church were registered as a corporation, and the debt were voted on by the members.3
Churches should, in my view, avoid debt. There are practical consequences, such as the freedom to handle unforeseen events and fund new ministry opportunities that are not covered in this article. But apart from these concerns, the church should be extremely careful that it adhere to Biblical principles about debt.
1. Larry Burkett, in Jeff Berg and Jim Burgess, The Debt-Free Church (Chicago: Moody, 1996), p. 119.
2. Berg and Burgess, p. 69.
3. Berg and Burgess, p. 172.