Section 8 — Funds for Church Growth

Conference Evangelism Funds

Conference Evangelism Funds are offered to local churches of the North NSW Conference to incentivise outreach ministry. It is allocated for the purpose of proclaiming the message of Revelation 14:6-12.

Conference Evangelism Funds are made up of two groups of funding: Tithe Reversion and Field Evangelism. Each are explained below.

Tithe Reversion
Tithe reversion is the first source of evangelism funding. It is automatically allocated to each of the local churches based on a calculation (see below). This money belongs to the Conference until called upon by the local church and the application is approved by the Conference.

How the fund works:

•    Each year the Conference budget allocates an amount equivalent to 50% of your net tithe increase.
•    Allocations for the current year are based on the tithe returned two years ago. E.g. 2014 allocations are 50% of the net tithe increase in tithe between 2011 and 2012.
•    Future year allocations will be based on a moving scale, e.g. 2015 allocations will be based on the net increase in tithe for 2012 to 2013.
•    Tithe Reversion is held by the Conference for use by the local church until applied for (Maximum of 3 years).
•    If funds are not used within 3 years of allocation, the allocation is returned to general Conference evangelism to be used as field evangelism funds.

Field Evangelism
Field Evangelism funding is another source of funding for local churches. It is based on a budgeted amount and must be applied for by each church on an annual basis. A church should use their Tithe Reversion funds before using their Field Evangelism funds.

Around August, the Evangelism Department will send out the Evangelism Proposal and Budget Request Form asking for Field Evangelism budget requests for the following year. The deadline for these applications is 1 October. If your yearly Local Church Evangelism Budget does not exceed what your Local Church has available via Tithe Reversion Funds there is no need to submit a request for Field Evangelism. Field Evangelism requests received will be reviewed by the Evangelism Department and the NNSW Conference’s budget will be finalised. Churches will then be notified regarding the outcome their request for field evangelism funding.

Any approved budgeted Field Evangelism funds will remain allocated to the church for that year. If the funds are not used, they will revert back into general Conference evangelism. For a church to access and receive the funds, the Call for Funds application form will need to be completed.

Types of Programmes
Evangelistic programmes that Conference Evangelism funds can be used for include:

•    Bible-based outreach, such as:
> Public Evangelism
> Seminars (i.e. Daniel, Revelation)
> Bible Study Lessons
> Video Evangelism
> Small Group Evangelism
•    Pastoral Support Personnel, such as Ministry Volunteers
•    Signs Outreach and Ministry
•    Global Mission Projects
•    Children’s Evangelism

All evangelism programmes, including children’s evangelism, must demonstrate the following aspects to qualify for Conference Evangelism funding:
•    Message There must be a gospel message component in, or throughout, each session or presentation.
•    Decision It is vital that an opportunity be given to make a decision. This is not necessarily a decision for baptism, but a decision to accept Jesus in some way.
•    Follow Up It is vital that some carefully planned follow up activities be a part of the overall evangelism strategy.

The Conference Administration will consider all other requests that fall outside these examples on their individual merits. Please note, that Conference Evangelism funds are not able to be used for Special Religious Education (SRE) in schools.

Under normal circumstances “stand alone” bridge building (e.g. Family and Health Seminars, concerts, displays at shows etc) and welfare programs would not qualify for support from Conference Evangelism Funds. Neither does the purchase of sound, computer or video equipment. Local church funds support these.

Evangelism funds will go towards efforts that lead to gaining decisions for Christ. Programs or processes which do not directly gain decisions for Christ must demonstrate how they will lead to it in order for evangelism funds to be granted.

How to Request Evangelism Funds?
To receive allocated Conference Evangelism funds, each church must fill out the Call for Funds application form as supplied by the Conference. Applications need to be voted by your Church Board before submission to the Evangelism Department at the Conference. Documentation is required to verify expenditure.

Please note that up to 50% of the programme’s budget can be forwarded to the local church in advance. At the conclusion of the project, receipts are required for the full cost of the project in order to receive the remaining funds requested.

Building Grants from NNSW Conference

Churches in the North NSW Conference may apply to the Conference Chief Financial Officer for grants to assist with building development work in the local church.

•    Establishment of a new church
> 10% of building cost up to a maximum of $120,000
•    Relocation or rebuild of an existing church
> 10% of building cost up to a maximum of $120,000
•    Supplementary building e.g. church hall
> 20% of building cost up to a maximum of $60,000
•    Renovation of church or other building
> 20% of building cost up to a maximum of $40,000
•    Approved church signage
> 25% of cost of signage as per AUC pricelist

A formal letter of application form the Church Board should be sent to:

Seventh-day Adventist Church – North NSW Conference
Attn: Chief Financial Officer
PO Box 7
Wallsend NSW 2287

The letter should outline the proposal and the need for financial assistance. A statement of how the local church will fund its contribution to the project should be included along with any request for a loan facility. A statement should also be included indicating how the proposal will integrate with the strategic mission of the church in terms of membership growth and quality of services to the community.

Conference Administration, and in the case of large projects, the Conference Executive Committee, will consider each application and provide grants where possible based on the availability of the funds and the demonstrated needs.

Building Grants from SPD

Guidelines for Church Fund Grant Applications
It is recognised that the cost of establishing a new congregation in many of our cities makes it impossible for them to ever have a church building. To help the church in these situations the Division has established a church building fund from which to make significant grants. These guidelines provide the principles for the granting of these funds for new church buildings in major urban areas.

Fund Use
The fund is available to assist with the following types of development:

1. Establishing a new church facility (land and building)
2. Building a new facility on already owned land
3.  Extensions to an existing church building that significantly expands its seating capacity
4. Relocation or amalgamating to expand its capacity and mission potential

See Principles for Fund Distribution for further details about fund use.

Note: No grant will be given for maintenance or refurbishment projects.

Principles for Fund Distribution
The Division Fund will not meet all needs so a process of prioritisation has been put in place. Priority will be given to help churches get established in major urban areas. A major urban area is an urban area that has been approved by the Grant Committee and placed on their list of Major Urban Areas.

Because of the varying needs of churches and their different costs and incomes it is not possible to have a set formula for assistance. Each church will be treated differently so as to be able to acquire a building.

The emphasis of the fund is to provide assistance so that a project will happen within the next 24 months. This approach may mean that in some years few churches will be assisted. In other years no churches may be assisted so as to build up the fund to make major grants if that is what the committee deems is necessary.

The following principles are designed to serve as the foundation for prioritising this distribution of funds.

1.    Funds are to be used for the strategic acquisition of church property.

2.    Distribution of funds will be for the support of new church buildings, major extensions to existing buildings or a land acquisition to enable a congregation to build a church worship facility. These funds will not be available for renovations.

3.    Where funding is for new Church Buildings, priority is to be given based on the following criteria:
a. Demonstrate evidence of predominantly Kingdom Growth rather than transfer growth.
b. Strategic plans demonstrate a clear mission focus. Financial commitment is not to inhibit growth or divert this focus.
c. A facility that is Multi Purpose rather then single usage. Some priority will be given to projects that have the potential of generating income to assist with loan repayments.
d. The church must demonstrate its capacity and willingness to grow.
e. Division supported Global Mission and Church Planting projects to receive some preference.
f. Union and/or Conference financial commitment to the project.

4.    In addition to the above:
a. Where a grant is requested by an existing church with a building it must demonstrate:
    i. That it is significantly expanding its seating capacity, or
    ii. That it is expanding its mission potential
In both these cases, Division grants will be given in the form of interest subsidies with capital assistance provided by the conference and union.
b. Where a grant is requested by an existing church with no church building a capital grant may be made from the Division fund or from the conference and/or union and it may be given in the form of an interest subsidy over a longer period.

5.    All churches applying to the fund must be able to demonstrate their financial capacity to borrow and are expected to fully utilise their own funds and borrowing capacity for the project.

6.    In all cases sustainability of plans is to be demonstrated through the presentation of a comprehensive business/mission plan.

7.    Unions are encouraged to provide a church acquisition consultation service to applicant churches prior to any grant being approved.

8.    The original amount granted must be returned to the control of this committee should a church within 20 years of receipt of the grant either:
a. relocate to an alternate site, or
b. sell a building which is the subject of the grant with no intent of reinvesting the funds into another church property
Any variation to this requirement will only be considered where that church has first consulted with this committee.

9.    An exit option is to be included with each application should the church reach a situation where it is no longer viable. Viability measures to include:
a. Size
b. Leadership
c. Mission
d. Finances
e. Doctrine

Fund Considerations
1.    The fund may underwrite minimum financial requirements for up to 5 years on properties where an income is to be generated until it reaches its expected potential.

2.    Assistance with repayments may be made from the fund while the church is getting established.

3.    Congregational leverage is to be fully used before grants are made.

4.    Incentives may be provided to fast track plans to encourage the congregation to be financially self- sustaining.

Strategic Land Acquisition
Strategic land acquisition is the responsibility of the union and/or conference

Application Process
The following application process is to be administered in the granting of funds from the reserve:

1.    All applicants are to complete the South Pacific Division Australia and New Zealand Church Grants Application Form which can be provided by a conference CFO. This application form outlines what information needs to be prepared as part of the submission to the Division Church Fund Grant Committee.

2.    Applications will be considered once each year for approval or provisional approval by the Division’s Church Fund Grant Committee. All applications must be supported by the Union and Conference.

3.    A business/mission plan is to accompany each application. This business/mission plan is to provide the following details:
a. Purpose statement
b. Growth goals
c. Demographic study indicating evidence of future growth
d. Leadership development plans
e. Financial plan showing:
    i. Revenue streams
    ii. Annual budget
    iii. Congregational capacity to service loans

4.    Completed application form is to be sent to the conference Chief Financial Officer for processing in sufficient time for it to be processed by the conference and union.

The church will provide the Church Fund Grant Approval Committee before their meeting each year the following reports:

a.    Financial report on project development until completion of the project and occupancy of the premises.

b.    Mission report on the church’s involvement in community, attendance, baptism and tithe/offering data for a period of five years from receipt of the grant.

Grant recipient churches will be notified of the due date for this report by the union or conference.

Local Church Loans

1.    In general, loans for local church buildings shall be available only in Australia and New Zealand. Division CCMF Limited may, in special cases at the request of the union mission concerned, extend the benefits of this policy to churches in the island field. The approval of such a loan in no way commits any organisation to the granting of an appropriation or any additional appropriation to the project.

2.    Loans shall be available for:
a. the purchase or construction of a building (including initial furnishings) that will be used whole or in part as the church’s regular worship facility
b. Additions to, reconstructions of, or major renovations to existing local church buildings
c. The purchase of land that will be used for the building of a church

3.    Loan Criteria
a. The loan will not exceed 50 per cent of the entire cost of purchase and/or construction of the church. For extensions or major renovations of existing churches it will not exceed 50 per cent of the current market value of the property. This amount may be increased to up to 75 per cent when:
      i. It is for the purchase of “commercial property” that will be used as a church facility and will not be altered in such a way to have its resale value     affected negatively on the open market, or:
      ii. The conference is satisfied on the church’s ability to afford the repayments and the loan does not exceed 75 per cent of the resale value of the property to be sold within one year on the open market. To determine the estimated resale value, when an external valuation is to be obtained, a valuation from a credible source shall be obtained
b. The annual church loan repayments cannot exceed:
      i. 40 per cent of the average annual tithe for the church, calculated on receipts over the most recent two-year period (the calculation can include tithe attributable to denominational employees who are members of the church) plus
      ii. 80 per cent of any property’s net lease income that is derived from leases with a term greater than one year,
     iii. any denominational appropriations for loan repayments that are committed for at least half the term of the loan
c. The title to the land is in the name of the Division approved legal entity which has been established to hold denominational property in trust
     i. In Australia the title documents shall be lodged with Australasian Conference Association Limited
     ii. In New Zealand the titles shall be lodged with Seventh-day Adventist Church Property Trustee (NZ) Limited
     iii. In union missions the original title documents shall be forwarded to the ACA for safe-keeping with a copy being retained by the local association
d. The buildings for which the loan is granted are covered at replacement value for fire and other risks with the Risk Management Service of the Division
e. Floor, site and financial plans, are referred to the appropriate building committee for careful study and approval before the loan is authorised or building operations are commenced (eefer policy, Building Projects)
f. Local churches shall be expected to utilise their own local church funds before drawing loan funds under this policy
g. The church has met the provisions of Policy FIN.30.35 Financing of Church Buildings Application Procedure

4. Application Proceedure
The church requesting a loan under this policy shall use the church loan application form and include the following information:
a.    i. An estimate of the cost of the project at the date of the application
       ii. The proposed date of commencement and the expected time to complete the project
       iii. The expected increases in costs of labour and materials and the basis on which the increases were estimated
       iv. The final estimated cost with the amount, if any, included for contingencies shown as a separate item. The project cost shall include:
          (a) cost of building materials;
          (b) cost of skilled labour;
          (c) cost of initial furnishings;
          (d) cost of landscaping, parking facilities and fencing, but the value of the land shall not be included. In the case of additional buildings and/ or extensions to existing buildings on property already owned and occupied, and/or the reconstruction of buildings, the value of land and existing buildings shall not be included in the calculations.
       vi. A declaration of the amount of cash and readily convertible assets set aside for the project, and on hand at the date of the application.
      vii. The percentage of this amount to the final estimated cost. vii. A church financial statement showing:
          (a) analysis of actual receipts and disbursements for the immediately preceding two years
          (b) budget for the current year and actual "year to date"
          (c) a budget forecast on how the debt will be repaid
          (d) The method of raising the finance if significantly greater than the church income including details on any lease income generated by the property
b.    The application shall be signed by the church pastor or senior elder and the church treasurer following approval and action of the church business meeting. A copy of this business meeting action shall accompany the loan application
c.    In passing on loan requests with their recommendation to the union conference, each local conference shall accept the terms of this policy and the resulting obligations. Union conferences similarly shall accept the obligations of the policy when they approve loans and advise the loan fund accordingly
d.    The local conference concerned, and in turn the relevant union conference, shall countersign the application, a copy of which is to be forwarded to the Division Investment and Financial Services Manager as soon as the loan request receives the endorsement of the union conference. The endorsement indicates that:
      i. all policy requirements have been complied with;
      ii. the executive committee has studied and approved the request, and
      iii. the guarantee obligations have been accepted
      iv. In passing on loan requests with their recommendation, each local conference shall accept the terms of this policy and the resulting obligations
      v. Union conferences similarly shall accept the obligations of the policy when they approve loans and advise the loan fund manager accordingly

5. Division Loan Fund Terms
(Specific conditions for the Division Loan Fund are contained in the Division Financial Services Policy)
a.    Conferences and churches shall be encouraged to liquidate their indebtedness under this policy as quickly as possible by means of special repayments from time to time.
b.    Loans from the Division Loan Fund shall normally be repayable by equal monthly or quarterly installments of both principal and interest over a period of not more than ten years, by automatic debit to the church account in the Cash Management Facility on the last day of each repayment period following the quarter/month in which the loan is taken up or final progress payment made. Where there is a change in interest rate during the term of the loan, the installment amount may be varied accordingly.
c.    Bridging loans shall stipulate a term which shall not exceed the lesser of two years from the date of the initial drawdown or eighteen months from the date of the last drawdown of the loan. A schedule of repayments shall be submitted for such loans by the time of the last drawdown on the loan.
d.    While the loan is made directly to the local church, the local and union conferences concerned shall guarantee the repayment of the principal and interest to the Division Services Loan Fund. Should a church default in repayment, or not have sufficient funds in its Cash Management Facility account to meet the repayment instalment, the Loan Fund may transfer the outstanding amount (including all interest accrued) to the debit of the Cash Management Facility accounts of the local or union conference at the discretion of the Loan Fund. In such case the Loan Fund shall immediately forward full details in writing to the union and local conference.
e.    Interest shall be charged at a rate determined from time to time by Division CCMF Limited.
f.    Guarantor details. When the loan is made directly to the local church, the local conference shall be the primary guarantor for the repayment of the principal and interest to Division CCMF Limited. Should an organisation default in repayment, or not have sufficient funds in its Cash Management Facility account to meet the repayment instalment, the Loan Fund may transfer the outstanding amount (including all interest accrued) to the Cash Management Facility accounts of the local conference at the discretion of Division CCMF Limited. In such case the Loan Fund manager shall immediately forward full details in writing to the union and local conference.

Should a church be in default of loan repayments or any part thereof for more than three months:
      i. The primary guarantor will be charged with any unpaid portion of such repayments in default including any future unpaid amounts as they become due.
     ii. By agreement between the guarantors, if the primary guarantor is not able to meet this charge the secondary guarantor shall accept the charge or part thereof.

The union conference shall be the Secondary Guarantor of loans to local conferences and churches.

Either the Primary or Secondary Guarantor in return for giving the guarantee may impose additional loan criteria to that contained in this policy.

6.    External Loans

External church loans are to be sourced and arranged by Division CCMF Limited or by an arrangement with a financial institution that has been approved by Division CCMF Limited.

a.    The application for an external loan for a local church shall be submitted to the respective union conference governing committee. All external local church loans shall be approved by:
      i. Seventh-day Adventist Church Limited when the loan or mortgage is to be in the name of the denominational property trustee, or
      ii. the respective Union Conference when the loan is not secured against denominational real estate and the loan is to be in the name of the local conference and meets the denominational policy criteria
b.    The application procedure and criteria shall be the same as for other church loans
c.    The term of a loan shall be kept to a minimum but shall not exceed twenty years
d.    Bridging finance for interest only loans shall stipulate a term which shall not exceed the lesser of two years from the date of the initial drawdown or eighteen months from the date of the last drawdown of the loan. A schedule of repayments shall be submitted to the Union for such loans by the time of the last drawdown on the loan
e.    Where a church wishes to purchase a property on a separate title it shall be permitted to borrow up to 75 per cent of its purchase price on the condition that:
      i. the repayment criteria is met, and
      ii. when income generated from the acquired property is used for meeting the repayment criteria the property remains leased until such time as repayment criteria can be met without lease income, and
      iii. the property is not demolished or altered in such a way that would reduce its resale value below 75 per cent of the value of the outstanding loan balance, and
     iv. the security for the loan is limited to the property, and
      v. the property will be sold if the loan repayments fall into arrears
f.    The conference is to ensure that the local church understands that the church property is security for the loan and in the event that the loan is in arrears the property may be sold by action of the conference governing board to extinguish the loan.
g.    This information is taken from the South Pacific Division Policy Book.

A register of external indebtedness for local churches is to be maintained by the Division.