A Simple Decision Making Process

A couple of days ago I received a request from a friend whose small Church had received an offer to donate 12 acres worth approximately $10 million. The Church wanted to emulate David in the story in the Bible where David said, “No, I insist on paying you for it. I will not sacrifice to the Lord my God burnt offerings that cost me nothing.” 2 Sam. 24:24.

They are unable to pay full market value and want to determine what they can and should pay within their means while following the biblical principle. 

I provided the following as a process for this decision. I post this in hopes that the comments will provide more insights and suggestions for this process. My suggestion:

Goal: determine appropriate price to pay for land for Church.

Decision-making process:

1.      King David was the king of Israel when he paid for the threshing floor, so he could pay from significant wealth. Although paying something seems appropriate in this case as well, there are critical factors to consider as stewards of the Congregation’s money. 

a.     I know the Church is relatively small, and I am assuming the Church does not have wealth. If the Church has a $100 million endowment that could be used, pay market price and stop reading.

b.     Also, it is good to keep in mind, the rancher will be able to deduct the difference between the amount received and the value of the land as a charitable contribution. I am not a tax expert, so you may want to confirm this.

2.     Assuming the Church will be borrowing for this whole project,  I would start at the end and work backwards. The goal is enhanced community outreach per Donor's request and it is a perfect goal for a Church. Below are the questions I would ask if I were sitting with you:   

What does the community need? 

•  Is there adequate daycare in community?
• Is there adequate school after-care? One Church I belonged to in Peoria area, built a large hall that could serve as a gym as well as doubling for congregational potlucks etc.
• Are there adequate recreational facilities? With 12 acres, there may be room for baseball fields, soccer fields, outdoor basketball, any type of playgrounds.
• Does the area need a shelter for the poor, homeless?
• These are some ideas, but the leaders need to make a serious assessment of the community needs.

After determining the community needs and Church leadership’s decision on what needs are appropriate to address, we need to:

• Estimate the cost to meet those needs.
• Develop a plan for the Church building to address the community needs as well as the congregational needs. Personally, my bias is to have Church buildings that are busy daily and hourly versus building a structure that is used on Sundays only, but the Church leadership must make choices.
• With cost estimates for the planned site development, you have the amount the Church will need to fund the development. Like any other development it is likely to build out in phases versus 100% complete in a few months, so keep this in mind for the plans.
• How much can the Church pay from its funds? How much can it borrow against the land and other assets? What monthly payment can the Church afford based upon current cash flow?
• After making all these calculations, leadership can determine how much it can afford to pay for the land while being good stewards of the Congregation’s money and future.