Ministry Facility Cost and Users 0913-03 ZZfwi

                              TO:   All Interested Onliners                                                                              FROM: Jim Bramer. Retired CPA-Auditor
                                                                                                                                                                FILE:  0913-03/fwi

                               RE:  Ministry Facility Cost and Users                                                            Originated in November 2001

    "Today's "Ax to Grind"   

    This has to do mostly with  Church, Schools and perhaps Camping Ministries  who must have their unique facilities in order to carry out their Ministry.  It costs a lot of money, plus other resources, to acquire land and construct Ministry Facilities.

    The topic today is:  "who should pay for these facilities?"

    It does  not  seem proper for previous generations to pay for all of this.  I believe that the current generation Users should pay their fair share and be responsible for some of such costs. Other observations include:

  •    Often this is done by the Ministry borrowing money to pay for a good sized portion of such facility costs.

  •    The  Operating Budget  is funded by the current generation via Donation Income, or maybe Service Incomes from Schools/Camps, etc.

  •    Which includes the necessary  Facility Debt Service  monthly payments of  Interest and Principal.

  •    Sometimes  Special Project  money is sought from the current generation Users for  Debt Retirement  purposes, with the idea of judiciously saving  Interest Expense  on said debt.

  •    If there is no facility debt,  the  Operating Budget  should be paying for the equivalent cost of facilities by setting money aside for applicable Facility needs.

  •     Any discretionary  Estate Income  (as provided by the previous generation upon their death) coming to the Ministry should generally NOT be used to retire Facility debt or pay for new Facilities.  Ideally, such proceeds should be a part of a  Quasi-Endowment  with its earnings (maybe even a discrete portion of the trust corpus) used for visionary Ministry opportunities. 

    Let me know your views on such matters by emailing me at  Jim@bcidot.org  

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UPTD: April 27, 2008

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