Why do we have debt?
Westminster UMC is in an aging facility that had a lot of prior deferred maintenance. Some major repairs that contributed to our debt in recent years include the parking lot (which had significantly more cost than expected), HVAC, and other plumbing and general repairs. In addition, we have a line of credit to cover the seasonality differences in giving as compared to expenses. Our total debt is $885,000 and our goal is to eliminate all of it.
Why do we need to raise more than just covering our debt?
As is the case with most churches, a significant portion of our annual giving is provided in the fourth quarter and in December. However, the expenses continue throughout the year. When the church had some leaner years in the past, the cash reserves required to continue to pay expenses with our seasonal giving were spent.
We have also built an amazing staff at Westminster UMC and need some time to grow our giving into a balanced budget by the end of the three year capital campaign.
Imagine not considering every major repair to be a budgetary issue and having funds available for outreach as needed. We are providing amazing ministry to our church family and our community and we are creating a welcoming place for people to find God from a variety of backgrounds. Making a Way for Ministry is about having the foundation built to fully realize God’s plan for Westminster UMC.
Why should I make a commitment (sign a card or submit online)?
We believe we should be good stewards of God’s money. Signing a card for the Making A Way For Ministry campaign will help our church plan for the future and achieve the goals of the campaign.
We hope you are excited and energized about our capital campaign Making a Way for Ministry. Not only is a capital campaign designed to raise funds, but it is also an exciting time to come together and listen to God’s will for us as a church family and individually. I’d like to address some of the more common questions the Leadership Board has heard.
Can I contribute something other than cash?
Of course! You can contribute stocks, mutual fund shares, bonds, real estate or other items of value that the church can sell and this can be a tax advantageous way to give because you avoid capital gains. Please consult with your tax advisor about the impact to you based on your situation and contact the church office to discuss how to transfer (or just let us know on your pledge card and we will contact you)
What is the time period for my commitment?
We are asking for a three-year gift in addition to your regular tithes and offerings.
What is considered a “reasonable” expectation for giving?
There really is no set amount, please just prayerfully consider your giving and listen to God. Sometimes 1.5 to 2 times your annual giving, spread over a three-year commitment can be considered. For me, giving to a past capital campaign got me a lot closer to a tithe.
What is the use of the expected campaign funds?
This year $55,000 of our total budget is allocated to debt service and this amount will likely increase as interest rates rise and when a portion of our debt converts to principal and interest payments instead of interest only. By continuing to have debt, we are borrowing from our future. We also need to have a stronger cash position for seasonality and fully funding designated and restricted funds – build our foundation on rock. Finally, WUMC has made an investment in an amazing staff that will continue to help us achieve God’s plan for WUMC. Our 2019 operating budget is not balanced, in large part because of the need to make monthly payments on our debt. Part of this campaign is intended to allow us to keep some programs/staffing in place and allow us to grow into those programs/staffing while, at the same time, reducing the debt service drag on our ongoing annual budgets.
Debt payment, creation of reserves and some funding of our staffing capacity are the priority. The amount to do these things is well over $1 million. There will be amounts to spend on other items (security for our facility) only if we are able to fund the priority items.
I understand the campaign is to pay off debt and shore up our financial foundation, but how do we know we won’t have debt again in the future?
WUMC went through some challenging periods in the past and never fully recovered financially. In addition, there were some larger projects – the parking lot, HVAC, and plumbing that either cost more than expected or became more urgent repairs than planned. All of this led to being on a less firm foundation. By prioritizing repayment of the debt, funding reserves so that we no longer need to draw on a line of credit for seasonal giving, and working towards a balanced budget, we will eliminate the need for debt now and in the future.
Our new Leadership Board structure increases communication between the traditional separate committees that created siloed decision making. Now the entire Leadership Board is discussing hires and expenditures before they happen, creating a stronger structure to manage through changes in cash flow. We have also implemented quarterly budgets that roll forward for 12 months rather once preparing a budget one time a year for each calendar year. In addition, we now track cash flow performance against those budgets rather than hope we have stronger giving in December and spend all year based on a plan created the prior November/December.
Given that the gifts will come in over a 3 year period, what safeguards will we put in place to see that those gifts are used for the purposes of the campaign?
There will be new leaders during that period and probably new employees and we know a new pastor.
All use of capital campaign gifts will be approved by the Leadership Board. We will be very disciplined to use the capital campaign gifts consistent with how we have presented the program to the congregation. We received an early gift from one family in the amount of $150,000. That family asked that it go immediately to pay down debt. The Leadership Board honored/approved that request and our line of credit was paid down by $150,000.
As mentioned in the last question, our improved lay leadership model supports and requires better communication and only oone-thirdof the board changes in a given year to allow for some continuity of planning. Allocations of capital campaign money will be subject to Leadership Board approval (based on Finance Committee recommendations).
On the agenda for the next board meeting is to discuss who and how we will make regular updates to the congregation regarding sources and uses of capital campaign monies.
Will the creation of the operating reserve occur only after debt reduction, or will some portion of the gifts be put into the reserve on a regular basis?
The Finance Committee has said that early money will likely be prioritized for capital campaign costs, creation of reserves (seasonality) and funding of our staffing capacity. The Finance Committee and Leadership Board, however, wanted to honor the wishes of the family making the early gift by paying down debt.
Is the leadership prepared to share with the congregation the cost of this campaign?
Yes, we will share campaign costs with the congregation as part of our reporting on sources and uses of the Campaign Funds.
Is now the right time for a capital campaign with a change in Pastor?
This campaign was planned well in advance of these developments. Originally, we planned to start a campaign in the fall of 2017, but that was not an ideal time to do this in Houston. The Capital Campaign committee has been meeting since October of 2018 to put the plan in place that you are seeing now.
Our current pastor will be leaving in May and we are very sad to see Jeff and Julie leave and will miss them. I am confident that God has great things in store for us and I feel this capital campaign may be perfectly timed to bring us together right before this change is about to take place.
What if I have any other questions?
Please reach out to any of the following: Kevin Koecher, Capital Campaign Chair; Bruce Lundstrom, Leadership Board Chair; Evelyn Grubb, Lay Leader; Jennifer Mailhes, Capital Campaign Communications Chair or Pastor Jeff Powers. We welcome your questions and input!
We believe each of us is likely to find his/her faith deepened by the discipline of giving and trusting that God is present in this effort.