Transcription
It's really, you know, it gets back to you. The decisions people make on Monday really impact how the vision that they've cast on Sundays is lived out. And, you know, it's so important. We around WIF, we say "Monday Matters," and it's because of that. You know, people make decisions about where they invest their money, where they bank, and, uh, all that goes into the kingdom.
Well, hi everybody, and welcome to the Grow Leader Podcast, where we grow leaders that grow churches by helping them reach their full potential. So glad you're with us today. If you're brand new, make sure you go to growleader.com for all things Grow Leader. My name is Matt, and I'm going to be your tour guide today. Is that a good phrase? I've used that before. I like being a podcast tour guide. Sitting beside my pastor, Pastor Chris Hodges. So good to be in this studio again. I was just looking out the window at some, uh, prospective students that were walking by, and, uh, they're here checking out Highlands College. We are in the beautiful Highlands College, um, facility, and it's growing. And it's been a fun week, uh, as we've had, uh, the, the incoming class. I've, I've been with them all week this week, so I'm, I'm, I'm kind of energized and excited about it.
What's been your favorite student interaction? Because you met with all of our freshmen, the twenty-eight, is that right? Twenty-eight freshmen that got here. What's been, been your favorite interaction so far with them?
You know what? It's the ones that realize that they're in something special. So, not all of them, but most of them go, "Wow, I, I know there's nothing like this," and they just say, "Thank you, thank you, thank you." They can sense the, um, the uniqueness of this learning environment and the way they're treated. In fact, I just came out of our restaurant, and we had a brunch taking place with all of our juniors, and some of them have never been in a fine dining experience in their life. And there they were, eating this great meal, and we were teaching them etiquette, and part of the character pillar. So, every part of it, honestly, Matt, is just, it's just fun. I, I could just walk through the buildings and and and and just have so much joy in my heart. We love having students back. Summer's over, and so it feels so good to have them back. And as always, I always want to extend an invitation to all of our listeners, uh, at Grow Leader, come and see the college. We'd love to have you here and host you here to see this place.
Now, you, you hear about our, our guest today in every episode, every episode we've ever done. That's right. Uh, we've had our friends from the Wesley Investment Foundation, um, really, I mean, help making the podcast happen each and every month. Uh, but today, we get actually get to talk to, uh, the president of the Wesley Investment Foundation. Yeah. We're so thrilled to have Norwood Davis here, uh, as our guest to talk about not only about the Wesley Investment Foundation, but we're also going to talk about, what do you do if you want to build a building? Yeah. How do you put your finances in order in the church? What's the first step, uh, to all those processes? What if, what if you're spending too much money and you don't know how to, how to, you know, create enough margin to build buildings? We're going to talk about all these types of things today. But welcome, my friend.
Thank you. So glad to be here. PC Matt, just great to be at Highlands today, and just, what a beautiful day. Thanks so much for having us. Norwood's also one of my golfing buddies. So, you, you, you're pretty smitten with golf.
I am. You, I took, I took it up later, only about eight years ago.
And which means you've never beat me yet.
No, no. But I have gotten obsessed. And it's, it's good for everybody to have a goal. So I got a goal there.
You go. Well, I'm so glad you're here. And we really, as always, we love our relationship with Wesley Investment Foundation, um, because you guys, currently, listen to this, everybody, currently have $630 million loaned out to ARC churches alone. That's awesome. Yes. And, um, and that just, I can't tell you what that means to me. When banks said no, you guys said yes, and you look for ways to get behind, uh, this vision. I want people to know more about WIF, but, but tell them about you first. Just let people get to know you a little bit.
Thanks. Thanks. Appreciate it. Yeah, you know, grew up, uh, humble beginnings, kind of, you know, lower middle class, in South Carolina. Went to college, came an engineer here, uh, went to work for a big utility company. They sent me back to get my MBA, and, uh, was doing that for the first, you know, 12 years of my career. And then in my, uh, early 30s, had a pretty profound encounter, uh, with the Living God, and and called me into ministry, uh, quite unexpectedly. And, uh, through a local church in Atlanta, 12Stone Church, and ended up serving on staff there. Been married 30 years, have a daughter who's expecting our first grandchild in September, and our son's getting married at the end of the month. So a lot of things going on.
When you say you served in the local church, I want, this is what I love about you and what I love about WIF, is you've been in the seat that so many listeners are in right now. Talk about what you did there at the church, and even how it's prepared you to do what you're doing now with WIF.
Great. Thanks. Yes. So I was the Chief Financial Officer of 12Stone Church. I oversaw the finances, HR, facilities, marketing, um, created a lot of those things. When I started, I was, I was a department of one. Yeah. Uh, and, uh, because where the church was, we were one campus, and then grew along the way over the years. Was there 17 years, and started one campus, and we ended up with eight at the end of it. And I oversaw a team, uh, that ended up doing all that stuff, but built it, and, uh, really worked alongside Pastor Kevin and Dan Ryland.
And you're a brilliant financial mind. In fact, I was asking you some things before the, the podcast that I think would be helpful for our listeners, just in the areas of finance, because this is one of the areas that you can have all the dreams in the world, U, but if your money's out of order, or if you don't have enough money, or, you know, you're overspending in some areas. I want to break all of that down. Like, if you were to go into a church and they said, "Man, you, you, you served in this role, help us make us better." Where's your first dive? Like, where do you, where do you first dive into to discover the health of a church on a financial, uh, basis?
You know, looking at the financial statement, just how much margin do they have? Um, do they have margin? What is, what is, uh, the tithing look like? Is it growing? Is it not growing? Is it stable? Uh, how, how much of the church is participating in supporting the church? You know, what percentage of the people that attend? Those kinds of things we're looking at, and just, you know, seeing what the health looks like. We look at the expenses. Are those in order? You know, there's some pretty common metrics when you, like WIF, we look at thousands of churches. You can get some really kind of key metrics on on what church. What are they? Just tell us what they are.
Yeah. So, you know, we look, and we like to see a church spend no more than 35 to 40% on its personnel. That would be all in salaries, benefits, uh, employment insurance, all those kinds of things. You know, typically 15 to 20% max on debt service, if they have debt, um, of any kind. Then we love to see churches obviously giving themselves away. And and how they are not just looking at what they're doing, but what, how much are they giving outside the church to missions and to expanding the kingdom of heaven?
And so when people start the process with, I guess we should tell people more about the Wesley Investment Foundation, um, but I want you to talk about the process when they're even getting in the application process. But let's back up for a second. Yeah. Most know this because we have been talking about this since the beginning of this podcast, but for those who are listening to the podcast for the first time, tell them a little bit about the origin of the Wesleyan Investment Foundation.
Yeah. So founded in 1946, is a church extension loan fund. Simply, we loan money to churches for the acquisition of property, renovations, building, those kinds of projects. And, uh, we've been doing it since 1946. And from 1946 to 2003, we did that exclusively in the Wesleyan, uh, denomination. But our CEO, uh, Craig Dunn, had a vision that the Kingdom of Heaven is broad and expansive. We started lending outside. And today, we lend to over 1,400 churches in 42 different denominations, 50 states. And just honored to be able to serve and churches from, you know, our smallest loan is a $5,000 loan to a rural church in Iowa that needed a new roof, to, you know, multicampus churches all across the country, tens of millions of dollars.
And so a lot of churches also have money on deposit, which obviously, you know, makes it possible for you guys to loan. Talk a little bit about that.
Yeah. So, uh, we're one of those. Absolutely. Yeah. Uh, Church of the Highlands, our great, and a lot of ARC churches, are involved. But churches, denominations, individuals, can actually invest money at WIF. We have a, uh, investment product. It's on demand, meaning they can get it, the money back the next day. It links to the checking account. But we're paying currently 5% on investments over $335,000. But you, somebody can open up an account for as little as $25 bucks, right? And we've got, uh, you know, a lot of folks will open up accounts for their kids, their grandkids. It's a great place for, uh, you know, emergency savings, long-term savings, kinds of goals.
And what I like about it, too, is because, you know, the, the, um, on the loan side of it, when you, when you, uh, pay back the loan, and of course, there's interest on that loan, that interest isn't going to build the biggest buildings downtown. You're taking that and giving it to the next church. I mean, so you can even feel good. There's not many places where you feel good about interest on your money when you're, when you're paying it back in loan form. But the fact that that money is been being taken, and and and given to churches, and of course, the money we have on deposit, you guys are giving us, uh, you know, an interest rate back, but you're also taking that money and giving it to churches. So on every side, it feels like, you know, this, this banking strategy that you have for your own church is actually, it's touching the whole body of Christ. And I just, I love that.
It is. And it's really, you know, it gets back to you. The decisions people make on Monday really impact how the vision that they've cast on Sunday's lived out. And, you know, it's so important. We around WIF, we say "Monday Matters," and it's because of that. You know, people make decisions about where they invest their money, where they bank, and, uh, all that goes into the kingdom.
Uh, so somebody wanted to either, uh, personally or with their church, put money on deposit, or they were interested in, you know, a loan because they have a project they want to do. What's the process?
Process is real easy. Go to wifonline.com. And there's two buttons right there on the homepage: one is "Invest," one is "Borrow." And, uh, it'll walk you through a process. We actually, you can even do it on your phone. Uh, we've got a mobile app. Phone, uh, you don't have to download the app. You can go to a mobile web browser, walks you through a little process called "Open Anywhere," and you can literally open an account in a few minutes on your mobile device. And, and we, we'll link to all that in the show notes as well.
Pastor, I want to ask you, because, you know, when, uh, God called you and Miss Tammy to move here and plant Highlands, this did not exist, right? How, how is, from a, from the pastoral standpoint, H, how is WIF helping church planters now in ways that they haven't had this kind of help before?
Well, it, what I've watched is even through the, the real estate crisis of 2008, all the regular, uh, uh, regulations, and what's required. I know it's probably important, but man, it's just so tedious. And, and, and one of the things you're actually in town talking about with me and my team today was that there's even a growing number of banks that are hostile. I don't know, I don't know a better word for that, are even like hostile toward churches because of our beliefs. And so I think it's just getting harder and harder and harder. And so, yeah, we, we didn't have anything. And so, uh, and, and, but, and you, of course, when you got help churches, they can't have anything. I mean, they have to qualify still. But I would say that you guys are way more generous in what qualifies than than the process that maybe the other banks and things put people through.
Yeah. One of the things that we can do that banks can't do is we obviously have underwriting standards where we review the church's financials and those kinds of things. But we don't have, we're not locked into a strict box, and we can, you know, shape what that looks like in our loan documents. We don't have cover that really seek to get into the pulpit or into the boardroom of the church and make decisions for the church. Um, you know, we really intend to kind of be a fuel to help that pastor, uh, reach his vision for that community. And, uh, we really like to fuel that. And we can be real flexible in how we even structure the loan.
So we, we've had so many episodes where you've talked about, you know, "Hey, Pastor, are you under-visioning your church?" Well, you, you are. I think that's one of the things that you care most often is to people, you need to have vision for what you would do if somebody walked up and said, "Hey, we want to be a part of this." Um, we, we love vision. When somebody comes with vision to you, though, we're telling people, "Hey, you need to have more vision for your city, your building, your church." What are the steps, the, the best practices they should go through or get ready for before they even start this process with you? What are you telling people when they apply for help?
Yeah, that's great, Matt. Appreciate it. You know, there, we see a number of churches will come to us. We, we don't like to say no. We'll say, "Not yet." And one of the reasons we say "not yet" the most is because somebody's come in, they really just haven't put their house in order yet.
Define that. What do you mean by that?
They haven't done, uh, basic accounting correctly. You know, instead of having an expense statement that has breaks out where they are actually spending money in the church, they'll have one big bucket that says "credit card expenses," and, you know, of their budget is going through credit card expenses. Well, that's, that's not right.
There's, and if they wanted to get it in order, what do you recommend? Like, what would you tell them? Is there, is there a service they call, or should they hire someone? I mean, I really want to break this down for the churches that are going, "I need this, but I don't know what to do."
And a lot of it depends on the size of the church. But, you know, if you take a startup church, maybe their budget's half a million dollars or less, they, they've got a network in their community. They can find volunteers that will help them. They can find a good bookkeeper. They can hire somebody amazingly affordable to help them really just do, uh, the blocking and tackling. They can download QuickBooks and start putting it in QuickBooks. Just be diligent about it. The things that need to be done in terms of keeping your financial house in order often times are mysteries to people, but they really don't have to be. In today's environment, with so many online tools, if you're just diligent about it, you can really kind of knock it out.
And we have, you, you've been very open with with our financial breakdown, how we're spending, how we're, how we're, how we're trying to set up margin. And the margin piece, I think, is the piece that is, um, you know, you're more opportunistic than strategic, which is why we have margin, right? The margin allows you. Getting your house in order and to define that for those who like, "What do you mean by margin?"
It's picking a percentage of the income of the church that's not going to have a name on it. It's not, it's a budget item, but but but it's not committed yet. I, it's always say to churches and pastors, margin isn't necessarily savings. It's just money that we don't have to spend. It's margin. And so, and we worked, in fact, we wrote it into the bylaws of our church that we would never budget a year more than 90% of the previous year's income. So we were stepping into every year with 10% margin. If the church didn't grow financially, and if it did grow, the margin increased. And today, to God be the glory, we were at about a 60, it takes about 64% of what the people give to do our missions, to do our buildings, our salaries, our ministries, all of our programming, everything that we are committed to spend. To which gives us that 36% of money that doesn't have to go somewhere. It always does go somewhere. That's how we're building buildings now with cash. We had, we borrowed for our first facility, the Grant Mill facility. We had to borrow money for that, but thank God we haven't had to since then. Um, but that's what we're encouraging you, pastors, to do is just to figure out ways, um, to create margin. And of course, there's only two ways you can create margin, and that is the income's got to go up, and the expenses have to go down. That's right. And it sounds so simple, but that's actually, you go to the drawing board, and we still do that as a church, look for ways, uh, to cut back, even though we have great margins, because that allows us to say yes to opportunities, to give to a mission, to do things that, you know, necessarily weren't in that budget.
Yeah. We did a real similar thing at, at 12Stone when I started. When I started, we, we, we didn't have that margin built in, but we started it. And, you know, we started it just a little bit. A lot of churches say, "Well, you know, I can't, there's no way I can get 36%." Well, can you get 3%? Can you get 1%? And just add a percent to it every year. You'll be just be amazed, uh, what happens. You know, uh, John Maxwell says, "Most people, uh, overestimate what they can get done in a day, underestimate what they can get done in a year." And if you just take time and just be diligent about it, you can really build on it.
So again, you gave me five things before the show that you said, "I'm, if I'm helping a church get prepared to build buildings and to do projects, or even to qualify for a loan at Wesley Investment Foundation, this is what I'm telling them." Give us another one.
Yeah. So first one was, "Put things in order." Second is, "Really count the cost." Um, we, what do you mean by that?
It's really saying, okay, what, what is the next phase that we want to go to? Are we moving from temporary to permanent? Or are we expanding a permanent facility? Or are we going to launch a new campus? And really being diligent about counting the cost. Scripture tells us that, you know, to, to count the cost of of what we're going to do. And so, really sitting down and planning and saying, you know, if, if, if someone's going to build a campus or a new building, it's a three to five-year process these days with the permitting, permitting, buying, design, and all that stuff, and construction. You've got to sit down and count the cost. And, you know, there's tons of people that would love to help in that process. There's all kinds of service providers that do that. Um, you know, we love to help and walk alongside our churches that are applying for a loan, and we'll work with them to help them understand, "How do you count the cost? What are the assumptions you need to make? How many seats do you want?" Right? "How much per square foot is do you need per person? How much does it cost per square foot?" Help, help them understand.
For someone who's listening, if, if they wanted to, um, if they had a certain income of the church, how much they would qualify, uh, for the loan process, right? Yeah. So is there a ratio there? Is there, that you basically start with?
We do. So we look typically look at three times trailing 12 months income. So if a church had a budget of, uh, revenue of $500,000, they'd qualify for a loan of $1.5 million. Okay. And then we'd expect them to put about 20 to 25% down on. So that means they need to have savings of $400 to $500,000, and they'd have a $2 million project. Great. And so then, then the back into, "Okay, what can you do for $2 million?" Right? Well, you know, building costs today are $250 to $300 a square foot. So if you're going, you're looking at a $7, $8,000 build, I mean, that's a 7, 8,000 square foot building, um, is kind of what you're looking at.
That's very helpful. So those are the kinds of things that you got to do when you're counting the cost. Okay. Give us another. Give us another one that you would coach churches on.
Yeah. I'd coach the senior pastor to prepare yourself. And how do they do that?
Yeah. Really prayer, physical, make sure you know, physical, educate themselves on this process, uh, get ready for, you know, that three to five-year journey of leading change. Read about how do you lead change.
And I think when you say three to five years, I, I can imagine there's a certain person listening going, "Gosh, three to five years." You do not want to rush into this process of building something that no longer works for you.
And three to five years doesn't have to be long either. If you'll go ahead and start today, you just go ahead and start having this conversation with your team, with your church, start talking to those who might, you know, potentially be generous in the church, talking to to an architect. I mean, some of these things are actually free too. I tell pastors all the time, you know, dreaming is free. Right? I mean, do you have a plan? I mean, we don't, you don't have to, you don't have to execute it yet. You don't have to spend the money yet. But it, but sure would be nice to be have a drawing that you could pray over, or a building that you are dreaming about, or, you know, looking's free. Go find a piece of property. So there are things that people can do right now. I'm, I'm, I'm, I'm constantly surprised at the number that I said, "Man, this is never going to happen." I said, "Yeah, but did you go look for property this week?" Because looking's free.
Well, and I think that's the, that's the, that is the Highlands College story. You know, for years, Highlands College was at the Greystone campus, and you always knew it wouldn't stay here. And then when God gave you a window, it was like, "Okay, here it is. Let's go." Exactly.
One of the things that I would say, even, you know, the Grow Leader Network is such a great network because people want to share their stories and they're so willing. So many people, what I've seen, you know, we get a lot of loan applications, and whether from ARC or Grow Leader, each one of those leaders benefited from somebody pouring into his life. There you go. That he loves to pour into the next guy's life. So if you're finding somebody, call up, um, you know, call up Grow Leader, call up ARC, and they'll give you somebody that's in your position.
Exactly. One of my, my little trade secrets, so to speak, and that is, every time I'm going to do something that's new for me for the first time, I'm going to go find three to five people who've already done it and go learn from them. And I encourage you, pastors, just, yeah, we, we can connect you. We can connect you with some churches. And I want to say, "We still do that." That's not a, that's what we used to do. We have been learning about an app and the power of an app to engage our, our, our congregation. And we went and found churches. We're still learning about how to do it the right way. And, and we've traveled together. I know I've watched you do that. You, on all kinds of things, just, you'll find who's really good at it and get them to coach. And that's very good.
So we're going to count the cost. We're going to, you know, prepare ourselves. What's, what's another one?
Uh, prepare the team. I think, you know, really working, and, you know, I saw this at 12Stone. You've seen it here at, um, Church of the Highlands, Highlands College, but getting the team ready for that journey and making sure that they're ready, they're equipped.
What, what, what role could a team play? I mean, oh, they play a huge role.
Okay. Go talk about it a little bit, because I can hear a pastor saying, "Okay, but how do I prepare them? What should I talk to them about?"
Yeah. Well, you can't leave what you're not doing. And, you know, in churches today, you're leading through teams, whether it's staff team members or volunteer team leaders. And, you know, you can, you know, Pastor casts the vision, but there's got to be a team that'll carry the vision. And you got to have people who are ready to carry that vision and understand what it's what it's all about. And one of, one of the ways that works here is you will still walk through a room, and if a light's on, "Why is this light on?" Try to build a building stewardship. But the entire team is carrying the stewardship of vision. We have a goal, we're trying to accomplish something. If we all do our part, it's going to help us get there much faster. Absolutely. A big deal. And the vision, share it at lunches, share it in small groups, just talk about, show your excitement for what's happening.
Okay. Is there anything else that you would, you would prepare a pastor for if they, they're listening and saying, "Well, this whole WIF thing sounds great, and building buildings sounds great, but what do I do?" What else do you?
Last thing is, prepare the church. You know, really start talking about the vision, drawing people in. You know, uh, just for, for pastors who have planted a church, it's this very similar kind of process. You start building your core, building out from there, and really preparing the church for what's coming and the change that's ahead. You know, moving into a new building is a big change, and people have got to be prepared for that.
And the one thing I would add to that, too, and I'm sure you would agree, is it's not just the "what," but it's also the "why." And the more you can talk about, you know, "We don't just want another building. We want to save marriages. We want to reach young people." And I always, I love this phrase when I'm sharing vision: "Imagine with me this space with thousands and thousands of people who are finding Jesus for the first time, and the ones who are, uh, finding freedom for addictions." And you, you really want people to kind of almost envision, uh, this future. And I always say, you add two words to the envisioning of every future, and that is, it needs to be exciting. In other words, in church, we're going to have a blast doing this. But it also needs to be ennobling. Not just exciting, but ennobling. In other words, this matters. That's right. This is what heaven counts. This is what we're going to stand before God and be proud of, right? You know, and, and, and give it in this eternal, it really matters kind of a viewpoint.
Absolutely. Oh, you're exactly right. I mean, the why is so important. I mean, you think a typical church attender, they're there because they like your church the way it is. So you got to envision them on the why for the change that's coming because they're like, "Why do we need to change?" So good. And we do that in step one of the Growth Track, which is our membership class. I mean, you say, "We exist for the people that aren't here yet." Right? And if you don't like that traffic's going to be frustrating, we build a new campus, it's going to be frustrating. But if you love that, you'll be excited. So from the, from the jump, we're talking about it. And the opposite, opposite is true too. We're not building a bigger building because you need two seats, right? You can only sit in one. I always tell them, "I, I'll only need about five by five to preach. I've got that now." So this is not for me. This is not for you. This is for the people who are not here yet, the ones that, you know, Jesus came and died for, and that matter to God. So this is huge.
My friend, thank you. This is huge. We really appreciate our relationship, uh, with the Wesley Investment Foundation. But as I've said many times to the audience, Matt, we never bring someone to, uh, the Grow Churches that we don't personally believe in, know them very, very well, and use them ourselves. So we're very, very grateful for the partnership. And I, once again, want to thank you from the bottom of my heart, uh, for loaning $630 million to ARC churches so they can get in buildings and we can reach more people for Jesus. So we, we are, we are huge fans and we really appreciate, uh, what you guys do. Please give my love to the entire team at the Wesley Investment Foundation. So thank you, my friend.
Well, thank you, WIF. Without a doubt, uh, they, they, they love local church, uh, and your history, what you did even before you were the president of WIF, proves that you still remember what it was like to be in that seat. Absolutely. And trying to get a congregation into the calling God had for them. We're so grateful you're here with us today. Don't forget, you can connect with WIF through the show notes today. They're, they're all over our website. They're, they're a massive friend to us, and we're grateful for them. Hope you have a great day. We'll see you next time on the Grow Leader Podcast.
Hey everybody, thank you so much for listening to this episode. And we also want to say a big thank you to all of our partners that help make the Grow Leader Podcast happen each and every month. For over 80 years, the Wesley Investment Foundation has helped churches with their borrowing and their investing needs. Whether you're dreaming of a new opportunity or seeking wise counsel about resource management, WIF can assist you. You can learn more about them at wifonline.com.
Grower next is our newest partner, Studio C. Studio C can help you know your people and grow your church. They combine strategy, technology, and communications to maximize church member engagement. You can bridge the engagement gap and transform your church's impact with Studio C. Learn more about them at their website. It's the studioc.com.