GWA Actual Case Study
In July 2020 a church in Eastern North Carolina was not able to continue as a church due to Covid 19 impact on congregational attendance The facility they owned was sitting vacant and the Church Leadership decided to sell. We were made aware of the facility and purchased it.Shortly thereafter, a church in the community that had begun as a very small congregation two years earlier was searching for a facility to rent or purchase and inquired about this church building. The income of the church was small at the time but we saw the passion of the Leadership and decided they were committed to success. We agreed to lease the facility to the church if they would raise money for an option to purchase after a 3 year Lease term. The church raised the funds to purchase the Option and leased the facility. The church membership and income have grown considerably after moving into their new “home” and they have now received an offer for financing from a local bank and are moving forward to closing on the purchase of the property in September 2023.We took significant risk on a small, young church and provided an opportunity for them to move into a facility that was a challenge for them financially. During the 3 years since moving into the facility, the has grown from 21 people to 85 regular attendees. The income of the Church has grown from $48,000 annually to over $135,000 annually. The loan commitment from the bank is enough to finance the full purchase price.In September after just over 3 years we will have received a payoff that provides a reasonable profit. We have been paid on time monthly the agreed upon lease payment. This good performance by the church provided comfort to the bank lender that the church could make the agreed upon loan payments. By taking the risk with the church we provided the church the opportunity to grow and exercise the Option to Purchase and be positioned to own the property and grow even more. In return, we will take the profits from the sale and invest in other similar projects.
HYPOTHETICAL GWA OWN-TO-SERVE CASE STUDY
In 2016, a young man and his wife made the leap of faith and started a new
church that began by meeting in one of the member’s homes. The church
grew quickly to 25 people, which allowed them to rent some meeting space
one day per week. The church continued to grow to between 60-90 people
each week at this temporary location but due to capacity issues and the
impermanent nature of their facility, attendance soon plateaued. The church’s
leadership began to realize that they needed a larger facility that could serve
as an effective base from which to grow their church, minister to the needs of
their members and accelerate their outreach to the community.
They strongly preferred to find a “forever home,” but landlords were not willing
to lease space to them since they were relatively new and without several
years of strong financial statements and a long track record of making
payments. The church also had a number of ideas to significantly customize their space to meet their organization’s needs, something other landlords were hesitant to provide. They also did not want to invest a lot of money in a building and mobilize a new building fundraising campaign if their congregation did not have a pathway to become the owner of the building. Also, even if they could find a landlord willing to take a chance on them, these spaces were not set up to accommodate the type of membership
growth and community outreach that was on their heart. The possibility to
purchase or build a church was even more remote since they lacked the
backing and track record necessary to persuade a lender to take a risk on
them.
The pastor contacted Good Works Accelerator (GWA) and shared the group’s aspirations. GWA encouraged the church to apply for the program to help the church obtain a long-term lease and option to purchase on a 10,000 square foot facility, comprised of a sizable sanctuary and classroom facilities. After several conversations/meetings with the church leadership, the Underwriting Committee of GWA voted to move forward with accepting the church into the program despite their newness. GWA offered the church specialized lease terms more flexible than they might otherwise be offered even if they were to qualify to rent another building. GWA also offered a supportive position toward allowing customization to the campus’ spaces to meet the church’s aspirations for operations and programming. The pastor, leadership group and founding members demonstrated a strong commitment to making the organization a success in the community. Their backgrounds and plans were compelling, and they possessed a desire to commit to financial discipline and proper stewardship of their organization and their new GWA church campus. The pastor and leadership council submitted personal financial information evidencing their financial soundness. They demonstrated their fiscal discipline by evidencing their ability to cover their lease payments for a three-year lease term and submit (via a benefactor/sponsor within their community) a substantial upfront deposit required to receive the exclusive option to formally purchase the campus from GWA at an advantageous, pre-determined formula, based on an independent appraisal, with a subsidized price cap that can not be exceeded no matter how much the campus were to appreciate. The pastor asked his leadership council to join him in guaranteeing the lease, which they agreed to do, so that there was a shared loyalty and financial backing to the leadership’s effort. Upon moving into the new facility, the church was able to utilize the sanctuary and classrooms to offer more programs to more people, accelerating their ability to meet the needs of their members and the community. Membership grew to between 250-300 people each week. The church successfully implemented successful tithing and building campaigns to allow the church to strengthen further its financial footing. Early in the third year, the church began working with a local bank for financing and due to their growth and financial track record making lease payments were able to get approval for financing. Six months prior to the expiration of the three-year lease, the church was able to execute the option to purchase and take ownership of the facility from GWA.
The pastor contacted Good Works Accelerator (GWA) and shared the group’s aspirations. GWA encouraged the church to apply for the program to help the church obtain a long-term lease and option to purchase on a 10,000 square foot facility, comprised of a sizable sanctuary and classroom facilities. After several conversations/meetings with the church leadership, the Underwriting Committee of GWA voted to move forward with accepting the church into the program despite their newness. GWA offered the church specialized lease terms more flexible than they might otherwise be offered even if they were to qualify to rent another building. GWA also offered a supportive position toward allowing customization to the campus’ spaces to meet the church’s aspirations for operations and programming. The pastor, leadership group and founding members demonstrated a strong commitment to making the organization a success in the community. Their backgrounds and plans were compelling, and they possessed a desire to commit to financial discipline and proper stewardship of their organization and their new GWA church campus. The pastor and leadership council submitted personal financial information evidencing their financial soundness. They demonstrated their fiscal discipline by evidencing their ability to cover their lease payments for a three-year lease term and submit (via a benefactor/sponsor within their community) a substantial upfront deposit required to receive the exclusive option to formally purchase the campus from GWA at an advantageous, pre-determined formula, based on an independent appraisal, with a subsidized price cap that can not be exceeded no matter how much the campus were to appreciate. The pastor asked his leadership council to join him in guaranteeing the lease, which they agreed to do, so that there was a shared loyalty and financial backing to the leadership’s effort. Upon moving into the new facility, the church was able to utilize the sanctuary and classrooms to offer more programs to more people, accelerating their ability to meet the needs of their members and the community. Membership grew to between 250-300 people each week. The church successfully implemented successful tithing and building campaigns to allow the church to strengthen further its financial footing. Early in the third year, the church began working with a local bank for financing and due to their growth and financial track record making lease payments were able to get approval for financing. Six months prior to the expiration of the three-year lease, the church was able to execute the option to purchase and take ownership of the facility from GWA.
***Please note – this hypothetical case study is for illustrative purposes only and is not a guarantee that the details provided herein will apply to every organization. Also, the example uses a church program participant, but it could have easily been another organization, whether nonprofit or for-profit, that is doing good work in and serving the community in some meaningful way.
