By Bruce Anderson

For 50 years, Presbyterian Home (Quitman, GA) has served the needs of its now more than 246 residents. Photo provided by freelance journalist Noelle Rutecki, Roswell, GA and the Richmond Sterling construction firm.

There is a strange phenomenon sweeping our nation that affects religious leaders of every denomination. One evening, they go to bed as leaders of a church and awake the next morning to find themselves at the helm of a "faith-based organization" (FBO). It is a distinction that means little to one's staff, members or neighbors but it suddenly makes it easier (and politically correct) for politicians and government agencies to come calling for help.

Long esteemed as the enlightened, benevolent eradicator of society's ills (crime, homelessness, poverty and so on), government agencies have all but capitulated in the face of these stubborn challenges. However, despite the social welfare system's inability to create a perfect society, government agencies are still under a mandate to impact America's communities positively. Problems caused by the widening gap between the "haves" and "have-nots" are exacerbated by a dearth of affordable housing for lower-income individuals and lack of suitable care for the aging American population.

In a final effort to achieve what are, at heart, charitable ends, the government is turning to the original (and effective) charitable organization: the church. In essence, mankind has reached the point where every counterfeit for God's power (money, government, philanthropy) has come up short in its problem-solving capability. That government and social scientists are now turning to the church for answers is proof that God provides opportunity for us to answer His call.

At the same time, these secular institutions are providing the financial resources that can allow churches to care for others, to follow the biblical mandate to "honor thy father and mother." A common project pursued in these partnerships between the church, government and business is the construction of senior housing facilities, which enable churches to minister to the fathers and mothers of a community rather than simply warehouse them.

Sadly, at a moment in history when they have a captive secular audience and the opportunity to model the biblical mandate for helping others, churches are often incapable of effective action. Although such action is well within their capabilities and resources, many churches cannot imagine themselves developing affordable housing, spurring economic growth in their area or building a senior living facility. However, academics and bureaucrats are right to admit that the church is the original and only remaining social organization that can bring about renewal in American communities.

Despite the good intentions of these government and business concerns and the church's own mandate to care for others, numerous obstacles stand in the way of legitimate "faith-based community development." First, because of huge differences in culture, priorities and even language, churches often find it difficult to communicate effectively with government and business entities.

Secondly, churches often avoid involvement because of perceived financial burdens and risks such projects might entail. (One nice thing about working with government is that its main contribution usually takes the form of funding.) Thirdly, some business concerns are leery of working with an organization that prioritizes ministry over a pure profit motive. And, finally, some agencies and financial backers are wary of "faith-based organizations" whose past funding requests may have conveyed an ignorance of basic finance, design principles or "business" sense.

Despite these challenges, there are churches around the country that are taking a lead role in development. They're discovering what it's like to have an additional revenue stream that dwarfs what they may have seen from other efforts like bake sales, book and tape revenues or even planned giving.

Clarify your vision
First, you must have a clear grasp of the God-ordained vision and passion of your church. If it includes a commitment to the elderly or lower income neighbors, a properly managed project can provide wonderful outreach opportunities. However, any FBO that steps into such a project simply to make a buck, bolster an ego or impress other people will likely fail. And, unlike a developer that might fail and discredit his company, a church that fails can discredit the faith.

Market research
Once that is settled, your next step is to gather empirical evidence of market demand for your project. You must have accurate data on the existence of a ready market including population projections, a detailed breakdown of age and income, housing absorption rates, future growth trends and the like.

Community awareness
One must also have a feel for the "comprehensive vision" from your community-at-large. Don't proceed until you have a handle on the community's consolidated plan (if there is one), zoning issues, and personality issues that might come into play. The old axiom about not fighting city hall is especially wise counsel in this circumstance. Fortunately, when it comes to senior housing in particular, there are few, if any, cities in America that will fight you due to the overwhelming need.

When you have completed your preliminary assessment, it's time to review the information in the context of your church's mission and vision. Through prayer, study and wise counsel, you may discern that, despite a fertile market, the project is not right for your church. If this is the case, stop before you do harm. However, if such a development is economically viable, will fit into and improve your community and is in full agreement with your God-given vision, consider moving onto the next step.

Financial analysis
Community development projects require church leaders to shake off a lot of habits and notions developed from living on the proceeds of the offering plate.

Grants
Government grants are often applied to predevelopment soft costs. However, the grants normally cannot be paid directly to a church, meaning you'd have to incorporate as a non-profit Community Development Corporation (CDC) and/or create a Community Housing Development Organization (CHDO). Incorporation as a CDC is a common paperwork drill and training of leadership, but the structuring of a CHDO involves significant interaction with the community that your organization will serve.

Tax credits
If your research certifies that you have an appropriate percentage of people in a particular financial risk category, you may qualify for tax credit funds. Typically, tax credits are used as leverage for making a project work. For example, if you have a $10 million project planned and you qualify for a 4% tax credit, this translates into just under $4 million in equity that you can sell to investors. This leaves you in the position of financing the remaining $6 million and change.

Leverage
If you already own the land on which you'll be building, you might be able to sell off a portion of the property or borrow against it to get development dollars. In today's lending climate, the key to securing financing is putting together a project that makes "financial sense." Also, financing arrangements run the gamut, from using a combination of government and private dollars to financing it entirely through loans.

Risk assessment
As with any undertaking there is always a downside, but not as many as one might think. Some key concerns might be, "Who pays if this project tanks?" "Would a default kill our church?" This takes us back to incorporation as a non-profit CDC or CHDO. Such an arrangement minimizes liability through the use of non-recourse financing under which the property and the project are the collateral.

Another concern expressed by churches is the issue of "marrying the world" to complete a project. If a development of this sort is structured properly, the church will own 100-percent of the project and 100-percent of the profits. If you choose a reputable Christian development group, your facility and its management can be structured to augment ministry.

An effective project is not just a social gospel story--it's evangelistic as well. People won't often listen to what you have to say until you've done something for them. A church that shows compassion for people may have greater credibility with the downtrodden than a church that simply builds prettier and pricier sanctuaries over the years. And what better way to convey this compassion than one that witnesses to the world at large as well?

About the Author
Bruce Anderson is the Florida District Manager of Cogun Inc, a leading design/build firm for churches and Christian non-profits. Cogun has completed more than 600 religious projects in 29 states and is a member of the Cornerstone Knowledge Network. Anderson is a nationally recognized speaker, author, and consultant for religious non-profits.

The Cornerstone Knowledge Network is a central source for fact-based, experience-tested information that can help churches clarify their missions, improve organizational leadership and successfully complete building projects. For more information call 1-888-595-7360 or visit www.theckn.com.

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