As new challenges arise in 2021, so does innovation. Mark Elsdon, in his second-of-four on his series on how to effectively raise money for churches and places of worship, reveals how church property can be an unlikely hero for revenue generation.
- Social Enterprise as a New Expression of Church
- Using Church Property for Mission and Revenue Generation (current)
- Aligning your Money and Mission for Greatest Impact
- Changing Lives Through Faith-Based Impact Investing
When I graduated from seminary and took my first position as a pastor I didn’t expect to also become a property developer. I planned to write sermons, counsel people in crisis, meet with committees, and think deep thoughts. And I did all that. But I also ended up overseeing a $17 million housing development project that transformed our ministry.
Seventeen years ago when my spouse and co-pastor, Erica Liu, and I were called to Pres House, the Presbyterian campus ministry center at the University of Wisconsin-Madison, we found a beautiful building that was in dire need of updating.
The roof was leaking, I was routinely fixing the toilet with paperclips, and my first week on the job was spent putting together a desk from a kit bought at Office Depot. Oh, and there were no students. Not a single one.
In addition to starting a ministry from scratch we wondered how we would pay for it all. Donors gave just $10,000 per year and even less came from our denomination. Hardly enough to sustain a historic property, pastors, staff, and the full-fledged campus ministry we and our board dreamed of.
As the Executive Director of a faith-based nonprofit I have done a lot of fundraising over the years and I very often hear folks say that there just aren’t the resources in the church that there once were back in the glory days.
And it is true that some forms of funding have declined; funding for campus ministry is almost entirely extinct in most parts of the country; and declining membership has led to less money for churches and other institutions.
But in many parts of the wider big C Church, we have a lot of assets. A lot of capital. Incredibly valuable property in A+ locations. Buildings. And massive endowments (more on that in a future post). So with nothing to lose at Pres House, we set about making use of those assets in a new way to fuel and grow the ministry.
From parking to ministry
It started with the property and an 80-year-old dream. Our board of directors rekindled a long held vision to build student housing on the parking lot next to the historic Pres House chapel. At the same time we began to re-launch student ministry we also set about building a new 7-story apartment building on the underutilized parking lot next to our historic church building. This brief description vastly over-simplifies what actually happened, but after two years of planning, more than a million decisions, and one year of construction, we opened the Pres House Apartments for 250 residents in the summer of 2007.
We now serve more than 800 students and young adults each year through Sunday worship, large campus events, small groups, and intentional communities in the apartments. One example is our Next Step program for residents in addiction recovery that has helped heroin addicts stay in school and rebuild their life and saved Wisconsin an estimated half million dollars in relapse related costs. Other communities are themed around vocational discernment, wellness, volunteer service, and so on. More than 90% of church participants experience opportunities to interact with people different from them, and the vast majority report learning or trying something new in their spiritual life each year through our programs. Our budget has grown 1500% from about $150,000 annually in 2004 to about $2.4 million today.
Repurposing our church owned property transformed our ministry and our finances. Certainly not every church can or should build student housing on their parking lot, but there is an enormous pool of underutilized property owned by churches that could be put to use in new ways for social enterprise (see my previous post on social enterprise).
The potential impact from new uses of church property is enormous. As just one example, the United Methodist Church in North Carolina owns property estimated to be worth $1.5 billion. They are the second- or third-largest landowner in the state. And that is just the property of one denomination. Imagine if we added the value and acreage of Presbyterians, Catholics, Baptists, and countless others.
The future use of many of these properties is up in the air. The Western North Carolina Conference of the United Methodist Church estimates that almost a quarter of its congregations will close over the next five years, at a rate of from forty to fifty per year. Multiply that number by all the conferences in the state, all the states in the country, and all the denominations facing similar closures, and the scale of church property going through transition comes into focus. But death, and resurrection, is central to the Christian faith. Just as the cycle of death and life turns fallen leaves into spring flowers, the closure of churches provides space and fertilizer for new growth to spring up.
Even for churches that are not facing closure or uncertainty, many church buildings and property are underutilized. Methodist leaders in North Carolina have estimated that church property is in actual use for only about 12 percent of the week. At Pres House we were using prime real estate in the center of a flagship university to park cars rather than serve students.
Projects are popping up from coast to coast using church property in new ways. Wesley Community Development Corporation (CDC) is helping some of those many congregations in North Carolina reenvision what can be done with those properties for both mission impact and financial sustainability. They have helped congregations start preschools and after-school programs, build affordable housing, lease their commercial kitchens, create coworking spaces, plant community gardens, open recreational facilities, and more. Working groups of pastors and leaders in California have started developing affordable housing on church property under the moniker “YIGBY” (yes in God’s backyard), a play on the acronym NIMBY (not in my backyard) that so often comes up when neighborhoods explore affordable housing. The Emory Fellowship in Washington, DC, completed a $55 million workforce and low-income housing facility in 2019 on their church property using a creative combination of government financing, low-income housing tax credits, and investment from the United Methodist Development Fund. Arlington Presbyterian Church, in Arlington, Virginia, won a Traditioned Innovation Award from Duke Divinity School in 2020 after selling their property, which enabled the construction of low-income apartment units and space for a bilingual training center. Exciting things are happening with church property in transition!
Another example of work that supports innovative uses of church buildings and property is through an organization I am helping to lead, RootedGood. RootedGood empowers institutions, social enterprises, congregations, and entrepreneurs to solve “wicked” problems and make good in the world. One of our core efforts, the Oikos Accelerator, helps congregations to reimagine using their property to better serve their neighborhoods and to leverage their capital assets to promote social impact. By the end of the Oikos Accelerator, each congregation will effectively design and launch a social enterprise that utilizes its church property in a new way. If your congregation is interested in getting support for using your property differently, consider applying to join the Oikos Accelerator.
There is enormous potential in the use of church-owned property and buildings. Let’s get to work!
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About the author: Mark Elsdon lives and works at the intersection of money and meaning as an entrepreneur, pastor, speaker, and author. Mark’s new book, “We Aren’t Broke: Uncovering Hidden Resources for Mission and Ministry,” explores how faith-based organizations can use investment assets and property for mission impact and financial resiliency. Mark is co-founder of RootedGood, which seeks to create more good in the world through social innovation; executive director at Pres House on the University of Wisconsin’s Madison campus; and owner of Elsdon Strategic Consulting. He holds degrees from the University of California, Berkeley, Princeton Seminary, and the University of Wisconsin School of Business. Mark is an ordained minister in the Presbyterian Church, USA, and lives in Madison, Wisconsin. He is an avid cyclist and considers it a good year when he rides more miles on his bike than he drives in his car.